Oracle’s acquisition of NetSuite will help extend their cloud offerings, as evidenced at their recent open world conference. Furthermore, this acquisition will bring substantial revenue gains to Oracle.
But, what does this mean for Oracle customers? In the short term, not much. Jim McGeever, EVP of NetSuite’s global business unit, assured them that everything would stay the same.
1. NetSuite is a leader in cloud ERP
NetSuite has achieved immense success in the cloud ERP space and brings much to Oracle as part of an acquisition deal. Recently ranked as leaders by Gartner’s Magic Quadrant for Cloud Core Financial Management Systems for Midmarket and Enterprise Companies. NetSuite will give Oracle an important foothold in cloud ERP markets – one that they focus heavily on.
Netsuite excels at the implementation, support and maintenance of subscription software by offering intelligently planned implementations that go live at predetermined times. Furthermore, their team has a proven track record in successfully upgrading thousands of customers simultaneously – something Oracle could leverage.
NetSuite has retained Wilson Sonsini Goodrich & Rosati to act as its legal counsel in relation to this acquisition, and no significant impacts will result for employees, customers, or stockholders from this transaction. Furthermore, no agreements have been made between any of NetSuite’s current management team and representatives from Oracle/Parent/Buyer regarding employment (including severance pay) and equity compensation of such members of management team.
2. NetSuite has a strong customer base
NetSuite customers will reap the rewards from this acquisition as they will gain access to additional resources and support. I expect NetSuite to primarily focus on serving SMB markets and continue innovating within these fields, such as retail/etail (including ecommerce) management as well as warehouse operations management.
NetSuite excels in many markets, such as software design and development and IT/ITES services. Furthermore, discrete manufacturing companies rely on NetSuite as an all-encompassing platform to manage procurement, scheduling and monitoring their processes.
Oracle was attracted to NetSuite due to its strong customer base, which helps minimize their risk of losing revenue in traditional business lines to an emerging competitor like NetSuite. Furthermore, having strong customers also lessens the possibility that Oracle enterprise solution offerings may cannibalize sales of NetSuite software; its acquisition puts NetSuite on stronger financial ground – something current and prospective new customers alike should welcome; it will deliver a solid, comprehensive ERP system designed to enhance performance while decreasing operational costs for all.
3. NetSuite is a great fit for Oracle
NetSuite has long held strong appeal in the Small Business space but struggled against Salesforce when it comes to Enterprise solutions. Thanks to Oracle’s vast sales network and offices worldwide, they will now use NetSuite to enter markets that they had difficulty with before organically.
Oracle will benefit from NetSuite’s strong presence in the SMB market as well as its cloud-first approach to ERP software with this acquisition, shifting resources away from on-premise products towards cloud ERP in an emerging market.
NetSuite acquisition will not only open up Oracle to new clientele, but will also give them access to an expansive partner network and allow them to offload implementation work and free up resources to focus on further developing its own product. As a result of the deal, Oracle will now offer comprehensive business management solutions tailored towards both SMBs and Enterprise customers allowing it to compete against Salesforce and other business solutions providers in this space.
4. NetSuite is a great acquisition
Oracle’s acquisition of NetSuite is an outstanding decision for both companies. Oracle’s vast infrastructure and partner network will allow NetSuite to quickly scale its cloud solutions faster, while freeing up resources to improve them further. In addition, the financial stability provided by Oracle will allow NetSuite to better serve its customers.
Oracle will leverage NetSuite’s track record of two annual releases for customers while expanding its presence into untapped industries like retail and wholesale distribution. Furthermore, this acquisition will give Oracle access to two years’ worth of NetSuite functionality development that could potentially bring in new functionality in an improved form for its products.
Oracle will benefit greatly from their acquisition of NetSuite by increasing their ability to serve small businesses effectively. While larger software vendors might take an “harvest” approach with smaller customers, extracting every penny for maintenance and services possible from them, with NetSuite Oracle can effectively serve smaller customers while competing more effectively against other SMB software vendors in this market.
