NetSuite ERP has been exploding in all kinds of young and up-and-coming businesses using manufacturing. We pioneered some use in pharmaceutical manufacturing; we've seen it in general business. A lot of our e-commerce companies are using the NetSuite platform — a lot of startups. Five of every eight companies that went out for IPO two years ago were NetSuite customers. It's very big in the startup community in California. A lot of newer tech companies are using it, but a lot of standard older traditional companies have begun using it, too. Over the last year, we've done some furniture distributors, we've done nutraceutical manufacturing, we've done companies that import and build electric scooters and leisure products like bicycles, etc. We've seen it in financial groups, as well.
In short, it carries a broad range of applications, specifically in the field services area. We've seen some construction companies move into it. We've got a group that does large AV installations. They will do a theater or an auditorium or a stadium; they handle all of the server-based audio-visual signal processing and large screens and large speaker systems for public consumption, etc. They'll have these million-dollar projects that they put together in their facilities, in a manufacturing type environment test, and then do all of the engineering there, and then they will send crews all over the world to implement these. That's kind of the field service part.
I worked with some of the largest NetSuite resellers in the world — they're partners of mine. We're affiliated and we use each other's services, but we're not financially tied. We see everything, including startups, that maybe pre-revenue, started to use NetSuite. They know when they go out to raise funds that the investors look at that and say, "Hey, these guys have really got their financial house in order. We feel good trusting you guys". What Oracle does, is they say that, from zero to $250 million a year, we approach them with NetSuite over $250 million a year. We'd like them to be looking at Oracle fusion.
However, with our partners, we go into $500 million and $700 million companies. We put in NetSuite plus. We may be doing a variety of products in that type of setting, but NetSuite is the core product there, and they're very successful with it. The thing about made-for-cloud software is that NetSuite was released in 1992, and a lot of the development took place in the '92 to '96 era. We were beginning to change the way we did software. This is when iPhone started coming out, etc. The name NetSuite refers to the fact that you have a network suite of products that you can use. There are apps in the NetSuite Suite cloud app store that companies can buy. This is very difficult to explain to new users because using multiple pieces of software has always been a nightmare.
It's been problematic. You have different products giving you different versions of the truth. You've got problems keeping them tied in together and integrated. You've got different release schedules, you've got customization. It's just been a nightmare and everybody has a bad view of that. What I tell my clients is, "How many of you guys have a phone in your pocket?" I'll say, "Do you like the customizations on your phone?" They'll reply, "What are you talking about? There's no customization on my phone". I'll respond, "Every one of those apps is a customization". They'll fire back, "No, it's not, it's on the phone". That's exactly how NetSuite approaches the suites of products. They open their technology app, they allow outside developers to develop functionality. They test, approve, and do quality control before release. When you buy one of these apps and there's an app for field services that fits in, plus services, it's so different. It's really hard for any product to fit everything in.
You look at this particular app and if it fits, you licensed the app, and it's just another tab inside your NetSuite system. You can't tell that you're in another product. The screens look the same, the integration is already taken care of on the backend. You don't have to deal with any of that. One time, Adaptive Insights was sold as a NetSuite advanced financials package. People did not know it was not NetSuite advanced financials. All they knew was, that their FPNA reports were on one tab, and their regular basic reports are in another reporting area. That being the case, we have gone into situations where people were (this was before the merger) paying $1,000,000 a year in maintenance charges to a tier-one software group. We were able to duplicate the functionality and improve it in several areas.
I'm not saying it was as good and in every area, but in several areas, key areas, it worked much better. We were able to implement NetSuite and the apps and the integrations for under $500,000 for the entire new system. That was a net savings of $500,000 a year. It was more modern technology, it was working better for them. Plus, they didn't need a team of three, tier-one experts on staff to manage the system. There were some huge losses there for a large organization. What I'm talking about is one of the more difficult concepts for today's IT groups to understand, because frankly, they've been through nightmares of software modification and customization. It's been a bad idea and it hasn't worked out well, but those were products that were created back in the '80s and the early '90s.
Those are pre-internet era technologies that were proprietary. ERP vendors used to want to be proprietary because that way, nobody could copy their software. It was considered a security measure against somebody duplicating the discs and reselling them. Today, the Internet is the integration tool that you're using — what could be more open than that? Now, the idea is, let's open this up to everybody. Let's let everybody develop on it. That's, what's made Salesforce so strong, and that's what has made NetSuite so strong.
Through all of this, you have to remember that there were no cloud-based ERP systems. Everybody was terrified to put their financial data into this cloud thing everybody was talking about until NetSuite came along. Now, NetSuite has roughly 22,000 companies using it. Every single ERP vendor in the world now has a cloud version to try and compete with NetSuite. The problem is, if I call Salesforce today or NetSuite tomorrow and say, "Hey, I want to license this, here's my credit card". In 20 minutes, if there's a system provision for me ready to use, I'm ready to go.
We do a very in-depth financial analysis before we let our customers look at software. We had a smallish client-company — a $14 million company. They were looking at NetSuite and a couple of other products. We put together what we call our cost revenue model that shows how they can cut costs and how they can increase revenue using the new software. They were very amazed to learn that we projected that over three years, they'd save or make $7 million. This opened their eyes to the possibility of ERP and things of that sort. They took a look at our findings in our spreadsheets and our models and everything like that and took it all in.
I circled back three years later to find out if they followed the model. Did they follow our recommendations? Did they achieve the projected savings and see their revenue increase? As a matter of fact, they had not, they did not follow the model. They said, however, that this really opened their eyes regarding how they could use this software and how they could make it pay for itself. In fact, they had doubled the size of the company in three years. They'd gone from a $14 million company to a $30 million company. They were also in negotiations to do a couple of acquisitions in Japan and Australia that would make them a $60 million company the following year. In doubling the size of the company, they had added one new person to the finance office to help with that. Two weeks later, I was in another company that was using QuickBooks and they were about the same complexity and they were a $30 million company.
They had 13 people in their finance office. I said, "Why are you doing this?". It was because they needed that many people to manage the spreadsheets, to manage and understand where their inventory was, and to understand the operations that were going on out in the field — that type of thing. So, they implemented and they were able to, by attrition, cut down to 10 people in the finance office, and they converted three of them to outside analysts or department managers to go work in other functions like that. That was a big deal.
We had a charter school that was running off a Sage 300 system. The way they handled purchasing at all of their schools, was the school principal would maintain a spreadsheet and he would fill out purchase orders for things that they needed. Then they would upload the purchase order file to a SharePoint server and at headquarters, an alert would say a new file has been uploaded to SharePoint. One of the accounting clerks would download the file and type it into the Sage 300 system.
This created a dual purchasing system, where there was a purchase order number at the school. There was a purchase order number in the Sage system. They had to work around that and they had to reconcile that. We put them into cloud-based software. As we were going through the NetSuite implementation, I said, "Why are you maintaining two purchasing systems?" They said, "Well, we can't afford for every principal to become a user". So, I said, "There is a limited edition user license that allows you to do purchasing and you can buy them in blocks of five, for $99". So, they put all the principals on the system — many of them. They would later become full users because they were able to access data on their school's performance, etc.
Within 90 days into implementation, they were rolling out. They had two areas: some international schools and some US schools. As they were rolling out the international schools, 90 days into the implementation, I asked, "How's it going? What's happening?" They said everything was fantastic. They said, "What we used to do, was every time we added a new school, we added a new person in the accounting office". They said, "Now, with the principals putting in all their purchasing information, we have more accountants than we need". They acquired three schools just before going live, and they didn't have to hire three people. I said, "What are you paying those people?". They say, "Well, roughly $60,000 to $65,000 a year". That was $180,000 in savings within the first 90 days of using the product.