Fran Foo | August 07, 2008
BRENNAN IT hopes to tap into Australia's multimillion dollar mid-market business software industry by investing up to $5 million in a multilateral deal with a company co-founded by Oracle chief Larry Ellison.
Sydney-based Brennan traditionally plays in the mid-market telecommunications and IT services space but has decided to diversify its business.The company will spend the next two-odd years building up its expertise in US-based NetSuite's enterprise resource planning (ERP) application with the aim of customising the product to suit local needs.
The agreement has several components, Brennan managing director Dave Stevens said.
Brennan would be able to develop its own software modules that would plug into Netsuite's ERP stack and rebadge them under its own brand for resale, Mr Stevens said.
"Apart from being able to reconfigure modules, NetSuite will put us through an incubation program and shadow our engineers for the next 18 months." The company will hire six employees to support the alliance.
Brennan's total investment falls between $3.8 million and $5 million, Mr Stevens said, which would take about three to four years to recoup.
Mr Stevens believes the local mid-market industry is ripe for the picking as ERP use isn't widespread yet.
"These companies are looking to push their dollar further and don't really have solutions or don't know how to extract savings from technology."
Mid-market companies are expected to spend more than $280 million on business applications by 2011, according to market research firm IDC.
Mr Stevens said he approached NetSuite as part of the company's expansion plan and chose NetSuite over other players as it was the right fit for his company and for the local market.
He said software giant SAP was approached but "didn't even turn up to the party".
"SAP wasn't really responsive to us ... the message we got was don't expect a call back within three months. I don't think SAP understands the mid-market or that it's that important to them," he said.
Brennan eventually evaluated products from Microsoft, Pronto Software and NetSuite.
NetSuite has one reseller in Australia, NetReturn, and hopes the relationship with Brennan will expand its presence locally.
NetSuite offers a slew of products, based on the software-as-a-service model, including customer relationship management and e-commerce which Brennan plans to delve into later.