NEW YORK, USA: NetSuite Inc's business is looking up and the software maker is preparing to launch its first application forApple Inc's iPhone, Chief Executive Zach Nelson said on Wednesday.

Nelson told the Reuters Global Technology Summit in New York on Wednesday that he feels "a lot better" about NetSuite's business now than he did in the first quarter, as more customers are now following through on commitments to sign subscriptions for NetSuite's Web-based software.

"Q2 feels a lot better," he said. "The tone is positive."

Nelson added, "The good news is that the customers who said they were going to buy, did buy. That's always a good sign."

NetSuite will soon introduce its first software for the iPhone, giving customers easy access to a suite of products that help companies manage areas including accounting, marketing, inventory and Web commerce.

Nelson said the company is also in talks with Apple to devise campaigns to market the software, including possibly posting sales reps at some of the electronics maker's retail outlets to promote NetSuite's products.

Customers will be able to download the software over Apple's App Store following the new program's introduction in the third quarter, Nelson said.

Pleasanton, California-based NetSuite is the world's second-largest publicly held provider of hosted software as a service, or SaaS, after Salesforce.com Inc. The company was founded by Oracle Corp CEO Larry Ellison.

SaaS subscription services have gained popularity over the past few years as it saves companies up-front costs of buying software and computers to run it along with the need to hire staff to maintain it.

Ellison connection

At the summit, Nelson said he was "very comfortable" with NetSuite's earnings forecasts for the second quarter and the full year. Business was stronger in April than in March, building on improvement compared with January and February, he said.

Nelson also said his company's non-GAAP gross margin is running at about 70 percent, and he predicted it will stay at that level for about two years before it may increase.

NetSuite sells business software for small and medium-sized companies, though it is trying to expand to divisions of larger corporations. It has a wide range of rivals, include Intuit Inc, Microsoft Corp, Sage Group Plc, Salesforce.com and SAP AG.

Another competitor is Ellison's Oracle.

Over the past year Nelson has increasingly focused on the corporate market, which is Oracle's sweet spot. His pitch to heads of divisions at big companies is that they will save money if they use NetSuite instead of competing products from Oracle or its arch rival SAP.

NetSuite even offers a line of software dubbed "SuiteCloud" to make it easier for corporate divisions to roll up their financial data from NetSuite into parent computer systems using Oracle or SAP.

With the two software makers potentially going after the same clients, some investors had raised concerns about conflicts of interest prior to NetSuite's initial public offering in December 2007.

Ellison responded by putting his majority stake in NetSuite in a "lockbox" company -- an arrangement that bars him from exercising any shareholder voting rights unless it is related to the sale of the company.

Nelson, who worked directly for Ellison as Oracle's marketing chief early on in his career, said the two speak occasionally.

"He rarely calls me, although I will pick up the phone once a quarter, once every six months if I have a question about strategy or what we're doing in the business to get his pulse on it," Nelson said.