Oracle Acquisition Of Netsuite Is A Mixed Bag
Oracle took another major step in its strategy of growth by the acquisition by declaring a bid for NetSuite, the among the leading player in the cloud ERP marketplace in contexts of a number of customers. Closed at $9.3 billion, the deal is the second biggest in the history of Oracle enterprise, after PeopleSoft in 2005 for $10.3 billion.
The deal was expected since very long, for several reasons. Oracle Chairman Larry Ellison was the NetSuite’s original investor, and Evan Goldberg, who was NetSuite’s founder, came out of Oracle.
And the CEO Zach Nelson was an Oracle marketing executive. Oracle’s database and its integrations is an imperative part of NetSuite’s infrastructure.
However, other than catalyzing Oracle in its race with Salesforce.com to extract to $10 billion in cloud revenues, there were many advantages of the deal to Oracle. Oracle attained a Credible Two-Tier ERP Solutions and offerings.
Oracle is upgraded to a modern cloud ERP solution that it can provide to smaller organizations. Till now, Oracle’s solution for ERP in the SMB market was J.D. Edwards. This might be a great solution for smaller organizations till the1990s, however, compared to modern cloud solutions , it imbibes a large footprint, even when implemented as a hosted solution. NetSuite is a faster-to-deploy and with easy maintenance, for smaller businesses. This is also attractive to smaller divisions of big enterprises, in a two-tier strategy.
This is benefitting for both Oracle and NetSuite: Oracle now is equipped with a solution for smaller divisions of its large clients, and NetSuite got introduced into Oracle’s large customer base.
Oracle have solid solutions for Retail and Wholesale Distribution
Though NetSuite sells into several industries, it is more success with small and midsize retailers and wholesale distribution firms, particularly those which need integrated e-commerce capabilities. NetSuite is among the cloud vendors that has a completely integrated solution for CRM, ERP, and e-commerce in one system. Oracle’s solutions to these markets are only satisfied via multiple products, like Retek, a legacy retail industry package which Oracle acquired in 2005, and ATG, very popular e-commerce platform which Oracle acquired in 2010. Newly, NetSuite’s integrated cloud solution is a very attractive solution and it addresses a weakness in Oracle’s portfolio.
NetSuite’s preferred offering is in the majority of new ventures in the retail industry, mainly among smaller companies, and among wholesale distributors which need the integrated commerce solution.
NetSuite competitors are curious about an opportunity from the Oracle’s acquisition to gain ground, though Oracle clarifies its product roadmap and upgrades its sales force.
The potential of NetSuite is its platform-as-a-service, known with SuiteCloud, that allows customers and partners to build new functionality on top of NetSuite. Oracle is going to support SuiteCloud, continuously, as it is an integral part of the solution already deployed by several NetSuite customers.
Labels: cloud, ERP, NetSuite, Oracle
- Julia is Techarex Network’s Content Marketing Associate for Intuit products. She has worked as a B2B and Marketing Strategist for the last seven years, helping businesses with software implementation for Customer Service, CRM, and Email Marketing. Julia thrives in helping companies find the right software solution for their projects. Aside from his obvious passion for Marketing, Julia admits to being a foodie and travel enthusiast.
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