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NETSUITE PICKS INVESTMENT OVER MARGIN

Ron Gill, NetSuiteNetSuite is willing to sacrifice improvement in its operating margins in 2013 in order to invest in promising areas. That message was delivered this week by the company's CFO Ron Gill at the Credit Suisse 2012 Technology Conference.
For 2012, the company expects an operating margin of about 6.4 percent, up from 5.3 percent from 2011. However, for next year, Gill said, "We won’t improve on that. We might even take it back some." Gill did not specify areas of investment and said only that "We some really good opportunities." Meanwhile, he noted the company no longer seeks to sign customers to multi-year contracts. "We are not trying to lock in customers. We are very confident with one-year terms," he said. Gill also reported that 30 percent to 40 percent of all new business is coming from the channel. Typical VARs are doing deals that are slightly smaller than those from direct sales while the larger channel members, such as Accenture, are pulling in contracts that are larger than those coming from the direct effort.
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