Oracle has acquired NetSuite for $9.3 billion, furthering Chairman Larry Ellison's plan to make Oracle the top provider of SaaS suites for cloud computing.
Some critics will surely suggest that Oracle and NetSuite have overlapping SaaS offerings, but Oracle CEO Mark Hurd was quick to address the anticipated speculation in a prepared statement.
“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Hurd. “We intend to invest heavily in both products—engineering and distribution.”
Even before the buyout, the Oracle-NetSuite relationship led right to Oracle Chairman Larry Ellison's front door. Ellison was an early investor in NetSuite. And NetSuite has hosted media events in Ellison's San Francisco home. (Disclosure: I attended one of the events.)
Oracle's buyout of NetSuite was handled by a "special committee" of Oracle's board -- surely an effort to eliminate potential conflicts of interest, since Ellison's personal fortune involves both companies.
Oracle Buys NetSuite: Cloud Partner Implications
Hurd has famously predicted that two companies will ultimately dominate the cloud industry's SaaS sector. Oracle, of course he predicts, is one of them. The other? Hurd declines to say whether it will be Microsoft, SAP or some other disruptive player.
NetSuite will be a key piece in the overall Oracle SaaS and channel strategy. While many SaaS companies have sold direct to end-customers, NetSuite has aggressively engaged systems integrators and partners that traditionally worked with Microsoft and SAP. Indeed, the NetSuite Solution Provider Program -- led by Craig West -- extends all the way back to 2002. The NetSuite channel effort blankets North America, Europe and more recently to Asia. It's a reasonably safe bet that strategy will remain in place under Oracle's ownership.
NetSuite has also worked hard to push beyond its cloud ERP heritage, which now has about 30,000 midmarket customers. The company also offers two PSA platforms -- which some MSPs and IT consulting firms have embraced to bolster project management and more.
Oracle Buys NetSuite: OpenWorld 2016 Updates?
Oracle expects to complete the NetSuite buyout before the close of 2016. Although I doubt the deal will be official in time for Oracle OpenWorld 2016 in September, I suspect NetSuite will have plenty of presence at the conference...
