Founded in September 1998 as accounting software company NetLedger and majority owned by Oracle CEO Larry Ellison, NetSuite Inc. (NetSuite) is a provider of cloud-based financials/ Enterprise Resource Planning (ERP) software suites. In addition to financials/ERP software suites, the Company offers a range of applications, including accounting, Customer Relationship Management (CRM), Professional Services Automation (PSA) and E-commerce. It also offers customer support and professional services related to implementing and supporting its suite of applications. The Company delivers its suite over the Internet as a subscription service using the software-as-a-service (SaaS) model. (NetSuite 2013)
Offering Summary NetSuite IPO was filed with Securities and Exchange Commission of USA in the year 2007, mainly to raise working capital for the company. NetSuite sold 6.2 million shares, about 10 percent of its stock, at $26 a share, nearly $4 a share higher than the highest forecasts and almost double earlier underwriter predictions of between $13.00 and $16.00. NetSuite's initial public offering raised $185.4 million, close to double the amount the company originally forecast the IPO would generate and a positive sign for the market of hosted, software-as-a-service business applications (Ricadela 2007). Since the public offering raise almost double the money expected by the company I would say that their IPO was successful. The chart below shows the average price of the stock per year since the December 2007 offering. (Nasdaq 2013)
The above chart shows that NetSuite’s stock had a good start and then stumbled for a few years but has started to recover and improve over the past few years. The chart below shows the average high and low price by month for the first quarter of 2013.
Technology Competition SAP AG. Founded in 1972 SAP AG provides enterprise application software and software-related services worldwide. It offers products in applications, analytics, cloud, mobile, and database and technology categories. The company’s enterprise applications include SAP Business Suite, a business process platform that includes software applications for ERP, customer relationship management (CRM) and supply chain management. SAP AG issues it IPO in October of 1988 selling 1.2 million shares. (MarketWatch 2013) At close of business on 4/5/2013 the stock was listed (SAP) on NASDAQ for $77.75 a share Salesforce.com, INC. Salesforce.com, Inc. operates in the customer relationship management, or CRM, market, providing web-based applications that allow companies to share information related to their sales efforts, such as sales leads, customer information, and customer interaction. The company's service, available exclusively online, competes with CRM software that companies purchase and install on their own hardware, as well as other on-demand CRM providers. Salesforce.com completed its IPO in June 2004, selling 11.5 million shares at $11 per share, netting $113.8 million from the offering. (Reference 2013) At close of business 4/2/2013 the stock was listed (CRM) on NASDAQ for $165.42 a share.
Financials. There are several competitors in the CRM/ERP field of technology, however many of them, such QLIK, are privately held so financial information was not available for comparison. It is evident from the chart below that of the 3 salesforce.com, Inc. has the best average selling price based on NASDAQ quotes for the first quarter of 2013, however when comparing the Net Income of the 3 companies over the past 5 years a different picture emerges. (MarketWatch 2013)
(23.3M) (27.47M) (32.01M) (35.23M)
While NetSuite’s stock continues to perform while the company continues to