San Mateo, Calif. (June 23, 2004) - NetSuite and Oracle have ended a relationship in which an online product from NetSuite was marketed as the Oracle Small Business Suite.

NetSuite president Zach Nelson said that the decision was a mutual one. NetSuite, originally known as NetLedger, was funded by Oracle chairman Larry Ellison. During the dot-com bust, Oracle took over marketing the product, which was originally priced at $5 a month for a subscription. NetSuite/NetLedger paid Oracle a royalty on the sales. The Oracle branding was credited with giving NetSuite a foothold in the market at a time when other online applications failed.

“We always did the selling. Oracle did the marketing,” noted Nelson, who added that during the early days, NetLedger employees used business cards sporting the Oracle name. Nelson said that NetSuite must stand on its own as a company, particularly since it hopes to have a public offering eventually. Earlier this year, NetSuite raised its revenue projections for 2004 from $30 million to $40 million.

The small business product will be re-branded as the NetSuite Small Business Suite, with changes in both pricing and features. Oracle sold the product for $117 a month, while NetSuite pricing starts at $99 a month. Under Oracle, the online suite had a limit of 10 users and no additional functionality could be added. NetSuite is removing those limitations.

Over the years, NetSuite’s products have moved up-market in terms of both functions and pricing, and the company now offers online ERP and CRM products. Small Business Suite represents about 5 percent of all revenue. However, Nelson noted plans to market it more aggressively in the segment that uses products like QuickBooks. “Pricing is a very important part of that plan,” said Nelson.

--Robert W. Scott

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