NetSuite wants buyers to customize and sell software

By Jim Finkle

BOSTON (Reuters) - Software magnate Larry Ellison's NetSuite Inc aims to turn its business management software service into a platform for developers to create customized management programs for small and medium-sized businesses.

The company, which delivers its software as a service over the Internet, sees customers and developers adding features for niche markets, then selling those products.

NetSuite sells software that small and medium businesses use to manage their finances and sales activities as well as to run Web stores. It sells a version that is customized with extra features specifically designed for software makers -- the same package it uses to manage its business.

"But we don't know how tractors get traded in. We don't know how sales people who sell tractors get paid," Chief Executive Zach Nelson said in an interview.

He is hoping a company that already develops software for farm equipment makers would take NetSuite's base package and add features for distributing agricultural equipment.

NetSuite will require every software developer to pay a commission to license the software and for using its data centers, which run the programs.

Shares of NetSuite rose 64 cents to $21.63 on the New York Stock Exchange on Tuesday. The company went public last December at $26 and surged to $45 on hopes it would consolidate its position as the dominant software maker delivering business software to small businesses over the Internet.

It hit a low of $18.41 on February 27, after forecasting that sales growth will slow this year.