NetSuite, Zoho post app suite gains

In markets big and small, software-as-a-service companies gain traction.

Rafe Needleman Former Editor at Large
Rafe Needleman reviews mobile apps and products for fun, and picks startups apart when he gets bored. He has evaluated thousands of new companies, most of which have since gone out of business.
Rafe Needleman

Two on-demand business software firms reported accelerating adoption of their suites today.

NetSuite reported second-quarter 2008 revenue of $36.6 million, up 43 percent from the same period in 2007. Net loss per GAAP was down to $3.1 million in the quarter, compared with $9.6 million in Q2 2007.

Sign-ups for Zoho. Zoho

The company also announced new midmarket and enterprise customers for its ERP and CRM suites, which are delivered as Web applications. Surgical robotics company Intuitive Surgical adopted NetSuite CRM; Nestle UK used services from NetSuite to launch an online store; and sports market firm Wasserman Media Group adopted NetSuite for accounting functions, replacing an installation of Microsoft Dynamics-Great Plains, NetSuite announced.

Meanwhile, Zoho, a provider of business software-as-a-service to small and midmarket companies, prepared to announce that it has reached the milestone of 1 million sign-ups for its services. Zoho's Raju Vegesna says that of those, roughly 300,000 to 350,000 still log on to the service each month. He also believes that Zoho is tracking at about one-third of Google Apps adoption. (Google Apps is Google's business-focused app suite; Vegesna did not consider individual or business use of Google Docs, which offers some of the same services.)

These success stories, in addition to the continued strong performance by Salesforce.com, put continued pressure on the distribution models and market that Microsoft and other traditional software houses rely on.