Not that long ago, on-demand software was considered a niche. Would real businesses use the Internet for their software needs? As seen with the stellar success of salesforce.com, inc. (NYSE: CRM), on-demand appears to be the next-big-thing and today another big player in the space filed to go public: NetSuite.Founded back in 1998, NetSuite has built a comprehensive offering of on-demand applications for small and medium-sized businesses – such as ERP (enterprise resource planning), CRM (customer relationship management), and e-commerce. It means competing against rivals like Microsoft Corporation (Nasdaq: MSFT) and SAP AG (ADR) (NYSE: SAP).
The software is sold on a subscription basis and is fairly easy to use. Its getting traction. From 2004 to 2006, revenues increased from $17.7 million to $67.2 million. I suspect the growth will continue its ramp.
Interestingly enough, the biggest shareholder is Larry Ellison, who is the cofounder and CEO of mighty Oracle Corporation (Nasdaq: ORCL).
The underwriters include Credit Suisse Group (ADR) (NYSE: CS) and W.R. Hambrecht. You can find the prospectus at the SEC website. And if you want to see more recent IPOs, you can click here.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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