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There's Method Behind Zach Nelson's Madness

Zack Nelson

NetSuite CEO Zack Nelson

Marc Benioff, CEO of Salesforce.com, may be the poster boy for SaaS (software as a service), but watch out for Zach Nelson. The CEO of 10-year-old NetSuite has transformed the 10-year-old company from one that was barely limping along to a powerhouse that is growing rapidly.

NetSuite's (NYSE: N) revenues for the six months ended June 30, 2008 were $70.7 million, almost 46 percent higher than the $48.7 million it chalked up in revenues during the same period in 2007, according to the company's latest 10-Q quarterly report filing, on August 13.

Nelson has held down high-profile marketing jobs at major Silicon Valley companies over the years, and has become something of a legend because of his marketing stunts, including one where he draped the better part of a building off highway 101 in a red plastic promotional banner.

There's more to those stunts than meets the eye, however; Nelson is a cool-headed man who will do what it takes to get his company to the top, and, if that includes wild and crazy stunts, so be it.

NetSuite, based in San Mateo, Calif. has seen rapid growth since Nelson joined as CEO in 2002. It has chalked up 10-fold revenue growth, and the workforce has kept growing, from 544 on June 30, 2007 to 901 on June 30 2008 by the company's own account. Late last year Nelson took NetSuite public in the biggest IPO since Google, raising $185.4 million.

As far as Nelson is concerned, NetSuite has "the opportunity to be the next great software company," and he is going after that goal aggressively. He recently opened up an office in Hong Kong to target the Asia-Pacific market, especially in Hong Kong and China, citing analyst reports showing that the SaaS market in the Asia-Pacific is growing rapidly.

Marketing skills

Nelson's marketing skills were established early on when he was working at Silicon Valley-based public relations agency Cunningham Communications, which Motorola had hired to do positioning and branding work for its 68000 chip.

"I had the idea for what we would call an ingredient branding strategy for Motorola, like Intel Inside for Intel, and Zach came up with Powered by Motorola," Andy Cunningham, owner of Cunningham Communications, recalls. That positioning established the Motorola 68000 chip in the public mind.

Five things to know about Zach Nelson

Fear was his great motivator. "In the early days, it was fear that drove me," Nelson said. "I wanted to make sure I hadn't made a huge mistake with my life."

Nelson holds a patent in the field of application integration, and has a few others pending approval.

Deep down inside, he wants to kill off Salesforce.com. Okay, that might be a stretch. But he did give a candid assessment of his SaaS rival in this video interview.

Can Zach Nelson rap? There is no video, but his first tech employer Andy Cunningham thinks so. "He can rap. I think he's a good writer and can do the poetry part of rap," she said.

The dyed-in-the-wool baseball fan convinced Oakland Athletics general manager Billy Beane to join NetSuite's board of directors.

Later, as CEO of McAfee subsidiary MyCIO.com, Nelson draped the north side of the 11-story MyCIO building in red plastic as an advertising gimmick. "You could drive down the 101 freeway and see it from three miles away," he chortles. "Those were the crazy dot-com days when you were always trying to one-up everyone else."

Eight years later, Cunningham still remembers that stunt. "Zach is very clever and capable," she said. "He's creative and sees things from a different point of view."

To market NetSuite, Nelson showed considerable chutzpah when he went head to head with software giant SAP. In 2006, Nelson planned a cocktail reception in a hotel opposite the Orlando, Fla. convention center where SAP was holding its premiere user conference, SAPPHIRE. Dubbing the reception SAP for the rest of us, Nelson sent out invitations reading "Who will become the SAP for the midmarket? (It Ain't SAP)."

As it turned out, the reception was canceled (a report at the time claimed SAP pressured the hotel to cancel NetSuite's reservation, which it had a right to do under its contract limiting competitive events), but he at least got NetSuite's name out there.

Next page: A baseball fan finds a match