INTERVIEW-NetSuite CEO says Q2 feels better, June will tell
* June will be "telltale month" for Q2
* Company aims to be profitable for full year 2009
* Growth strategy is organic, not through acquisitions
LONDON, June 10 (Reuters) - Business software maker Netsuite (N.N) senses a greater willingness to buy among its customers this quarter but is still waiting to see that translated into action during the key month of June, its chief executive said.
NetSuite charges subscription fees for its Web-delivered software rather than upfront licence fees as most software makers do, making its revenues more predictable, but most new business is still done in the last month of the quarter.
"This is sort of the telltale month for Q2," Zach Nelson told Reuters in an interview on Wednesday, when asked how confident he felt about the current quarter.
"The pipeline's grown and there seems to be a better feeling among the prospect base in terms of their willingness to purchase, but we still have to see it convert this month into actual customers."
NetSuite is the world's second-largest listed provider of hosted software as a service, or SaaS, a fast-growing area of so-called cloud computing, which in total is expected to grow 22 percent to $8 billion this year, according to Gartner.
SaaS subscription services, pioneered by Salesforce.com (CRM.N), have gained popularity over the past few years as they save companies upfront costs of buying software and computers to run it, along with the need to hire staff to maintain it.
California-based NetSuite -- whose products help companies manage areas including accounting, marketing, inventory and Web commerce -- made its first profits in the fourth quarter of 2008, and aims to be profitable for the full year 2009.
"That continues to be our intention," Nelson said.
TINY PROFITS
Profits made by SaaS companies in general are tiny compared with those made by traditional software companies such as Microsoft (MSFT.O), SAP (SAPG.DE) or Oracle (ORCL.O).
But Nelson said investors were willing to give them time, and said big software companies developing SaaS products would find it hard to match those of companies such as NetSuite that were built on the SaaS model. Continued...
