Oracle’s acquisition of NetSuite is another milestone in their push to expand their cloud software business. According to Oracle CEO Mark Hurd, this acquisition will add cloud ERP and e-commerce capabilities to their suite of products.
The deal is expected to close within the year, but before then a majority of NetSuite shareholders must approve its sale which was negotiated by an exclusive committee at Oracle.
Business Management Software
NetSuite is a cloud business management software provider, offering various applications such as accounting, customer relationship management (CRM), and e-commerce. They also provide support and training to help businesses get the most out of their software.
NetSuite was established in 1998 by Evan Goldberg, an Oracle alumnus and former executive at Oracle Corporation. Their pioneering SaaS technology led to the development of an impressive cloud business platform which is now utilized by 21,000 organizations in over 200 countries and territories around the world.
Oracle’s acquisition of NetSuite puts the firm on a secure financial basis, which benefits both it and its customers. With more focus on product development than sales and support, NetSuite could stay ahead of competitors.
Oracle also boasts an expansive partner network that can assist NetSuite in selling and delivering their software. This will allow the company to outsource much of its implementation work to trusted partners, freeing up internal resources for product development.
Supply Chain Management
In 2016, Oracle’s acquisition of NetSuite was seen as a strategic move to expand into small to midsize business markets and accelerate their transition into cloud applications.
Oracle made the acquisition at a critical juncture, as growth in cloud services offset declines in traditional software sales. Research firm Techopedia estimates the deal will add around $1bn of annual cloud revenue for the acquiring company over its lifetime, according to experts.
In an interview with CNBC, Co-CEO Mark Hurd explained the acquisition as part of Oracle’s cloud strategy to serve 70-80% of enterprise businesses within 10 years. He believes the market is transitioning rapidly away from on-premises solutions towards cloud-based IT infrastructure.
Oracle has a history of acquiring other cloud companies, though it remains uncertain if this will help the company compete more aggressively against rivals such as SAP or Salesforce due to cultural differences between these organizations.
Integrations
NetSuite is the leading cloud business software suite that helps manage inventory, monitor financials, host eCommerce stores and maintain customer relationship management systems. Additionally, it provides integrations with other applications to simplify data flow between cloud-based and on-premises systems.
Oracle purchased Netsuite as a way to boost their cloud revenue and penetrate lucrative markets. Through the acquisition, Oracle now provides customers with more cloud solutions such as CRM, e-commerce and ERP tools.
Oracle now offers its customers a more comprehensive suite of solutions, spanning marketing automation to supply chain management. Furthermore, its acquisition of FarApp – an eCommerce, logistics and retail connector provider for NetSuite – will further bolster the suite’s integration capabilities.
Oracle SuiteCloud, which utilizes advanced data integration technologies and industry best practices, allows customers to seamlessly link their NetSuite applications with other cloud and on-premises software packages. The technology was tailored to fit into the way your business’ application ecosystem is constructed rather than forcing it into an Oracle-specific form factor.
Value
NetSuite has successfully built a loyal base of customers within the small and medium-sized business (SMB) sector. Its cloud-based software as a service (SaaS) model enables customers to take advantage of NetSuite’s suite of business management and accounting applications without needing to purchase, set up or maintain the infrastructure supporting them.
Oracle’s acquisition of NetSuite will enable it to better serve its current and future customers, as well as accelerate progress on Oracle’s cloud revolution.
Furthermore, this purchase could give Oracle a major edge in its pursuit to overtake Salesforce and become the world’s largest cloud company. Customers who have already deployed NetSuite solutions will gain significant advantages through this deal as it gives them an immediate path to migrate onto Oracle’s platform.
Furthermore, Evan Goldberg of NetSuite and Oracle Chairman Larry Ellison have long had a mutual relationship that has made integration between the two companies much smoother.
