Oracle plans on purchasing NetSuite to increase cloud revenues and access small to midsized business markets, yet this deal may detract some sales of their cloud ERP product from Oracle itself.
The acquisition could also lead to a derivative lawsuit. Many directors involved with its decision hold positions with companies doing business with Oracle or are affiliated with venture capital firms with portfolio companies that depend on Oracle technology.
The deal is a sign of Oracle’s commitment to the cloud
Oracle’s acquisition of NetSuite demonstrates its dedication to cloud computing. This marks its third deal this year involving SaaS business software; however, this one stands out due to its size compared with their two prior deals taken together.
Oracle will now be able to focus on providing enterprise cloud solutions, while NetSuite continues serving small and midsized businesses which represent the fastest-growing market for cloud business apps. Furthermore, NetSuite’s expertise in overseeing six-month upgrade cycles affecting thousands of customers at once will assist Oracle with faster delivery of its own enterprise cloud products.
Oracle will use this acquisition to expand its presence in countries where competitors such as Salesforce were dominating. They can leverage NetSuite’s local sales teams, network of partners, and knowledge of local business practices gained over 10 years to expand their footprint and offer robust support models for their own products.
It’s a strategic move
Oracle sees this deal as an essential move towards cloud-based applications, as they increase their focus on cloud technology. NetSuite is a comprehensive suite of business software – offering cloud-based financials / ERP and omnichannel commerce capabilities in one subscription model that eliminates infrastructure management costs so businesses can focus on core activities more easily while receiving two new software updates annually.
Oracle will benefit greatly from acquiring NetSuite as it expands their presence in the cloud ERP market and accelerates their own growth. NetSuite’s global reach and customer base complement Oracle’s cloud offerings in an ideal way.
Oracle’s acquisition of NetSuite will benefit customers, employees and shareholders of both parties alike. Oracle will use this acquisition as an opportunity to expand its SaaS cloud offerings while meeting SMB needs and offering more comprehensive cloud solutions across back office functions and front office. Furthermore, it will reduce upgrade time from older on-premise products while increasing customer retention rates.
It’s a financial move
Oracle’s acquisition of NetSuite is a strategic financial move by them to strengthen their presence in the cloud and to advance their own offerings. By catering to small businesses’ needs while competing against enterprise solutions provider Salesforce.
NetSuite will benefit from accessing Oracle’s worldwide sales channels and massive resources, which should enable it to stay ahead of its competition, according to Supply Chain 24/7. They plan on using these new resources to develop a clear and scalable cloud strategy that appeals to their prospective customer base.
NetSuite will gain not only new resources from Oracle but also an advanced 3D product visualisation CPQ solution from Verenia that it will incorporate into SuitePeople, its human resource management solution. This will enhance companies’ abilities for overtime management, time capture and shift scheduling. Oracle has been making strategic acquisitions of technology companies in various vertical markets globally.
It’s a technical move
Today’s tech industry is no stranger to large technology companies purchasing smaller ones if they wish to enter new markets; one such example of this trend being Oracle’s purchase of NetSuite, a popular cloud ERP and CRM solution tailored specifically for small and midsized businesses, which was announced recently.
Oracle’s acquisition of NetSuite will help it expand into new markets while hastening their cloud initiatives. Furthermore, this transaction shows their serious commitment to innovation within this space and demonstrate their dedication.
NetSuite’s acquisition will benefit both its customers and partners alike. NetSuite provides a fully integrated suite of cloud business software spanning financials and Enterprise Resource Planning (ERP), serving diverse industries and customers from more than 100 countries across five continents. NetSuite’s fast expansion can be attributed to its diverse customer base coupled with aggressive sales and marketing strategies as well as its strong global focus.
Deepak Wadhwani has over 20 years experience in software/wireless technologies. He has worked with Fortune 500 companies including Intuit, ESRI, Qualcomm, Sprint, Verizon, Vodafone, Nortel, Microsoft and Oracle in over 60 countries. Deepak has worked on Internet marketing projects in San Diego, Los Angeles, Orange Country, Denver, Nashville, Kansas City, New York, San Francisco and Huntsville. Deepak has been a founder of technology Startups for one of the first Cityguides, yellow pages online and web based enterprise solutions. He is an internet marketing and technology expert & co-founder for a San Diego Internet marketing company.