NetSuite, which began offering cloud-based products in 1998, is now owned by Oracle. The software giant is paying $109 per share in a deal that should close this year, according to an announcement from the company on Thursday.
Oracle acquired NetSuite to expand its cloud offerings and gain access to smaller companies, as well as compete against Salesforce. Furthermore, the merger will strengthen Oracle’s global operations, granting it access to new vertical markets and countries.
Benefits
NetSuite is a cloud-based business management software platform that enables companies to efficiently manage their finances, operations and customer relationships. It helps users stay on top of budgets while monitoring important metrics like inventory levels or e-commerce sales.
Netsuite has long been a leader in the SaaS space, and Oracle purchased it in 2016 to expand their cloud offerings and reach small to mid-tier markets. Furthermore, this acquisition gives NetSuite access to additional capital which will allow them to continue growing and attract new customers within the Small and Medium Businesses (SMB) segment.
Mark Hurd, co-CEO of Oracle, states that this deal is part of their cloud strategy to accelerate adoption rates. He predicts that within a decade 70-80% of organizations will have made the switch to cloud-based IT infrastructure.
Oracle must decide where to invest its research dollars and how best to position NetSuite within their product portfolio. Furthermore, it needs to figure out how to integrate NetSuite’s support and professional services teams with those of other products.
Synergies
Oracle acquired netsuite, a cloud-based business management software company, in November 2016. The acquisition is designed to give the firm an edge in the cloud computing market and broaden its offerings.
Oracle’s acquisition is in line with other cloud M&A deals the company has completed, giving the business more subscription revenue and an edge in a rapidly expanding cloud ERP market.
Oracle made a wise decision by purchasing cloud-based solutions, positioning itself for future growth. Furthermore, this deal gives Oracle access to additional SMB midmarket solution offerings.
According to Forrester analyst Paul Hamerman, the deal is in line with other acquisitions of cloud-based technology providers and should result in significant revenue synergies for both companies. He adds that customers may end up paying more for subscriptions and support services due to increased competition among vendors.
Oracle’s acquisition of NetSuite is one of the biggest milestones in cloud technology history and benefits both companies. By joining forces, Oracle and NetSuite can offer customers an unbeatable suite of cloud-based solutions for accounting, operations and CRM.
Integrations
Integrations are a vital tool in the tech industry for getting new technology products into customers’ hands. Unfortunately, an all-inclusive approach may leave some users dissatisfied when their solutions don’t meet their needs or don’t give them sufficient insights to make informed decisions.
Oracle and NetSuite both provide a range of products to cater to different business needs. For instance, Oracle provides an ERP solution which assists companies with financial management, inventory control, and operational efficiency.
Another essential capability of CRM products is their single customer view across all enterprises. According to Aberdeen Group research, this can enable organizations to take a unified approach to customer experience management.
When organizations seek to implement these two capabilities, they must guarantee the resulting integrations are secure and robust. This may prove challenging if not familiar with the intricacies of software integration.
Future
Oracle’s acquisition of NetSuite is the latest in a series of moves it’s making to shift away from traditional on-premise software and towards cloud computing solutions. Furthermore, this acquisition could protect Oracle against potential market share losses in its fastest growing business line.
NetSuite’s customers are rapidly-expanding businesses that require constant innovation. According to Cheng, they’re highly passionate about ERP/financials, customer relationship management, human capital management, ecommerce and other products in their suite.
NetSuite has set the bar high when it comes to product implementation, support and maintenance; no other company is more proficient at this than them – capable of seamlessly completing six-month upgrades for thousands of customers simultaneously.
Oracle’s acquisition of NetSuite will provide it with the resources to penetrate small and mid-sized markets that it otherwise wouldn’t have had access to. Furthermore, it will benefit from NetSuite’s expertise in cloud software and support services.