NetSuite: One Year After the Oracle Acquisition

 

cb03-oow17-register-oracle-netsuite-3876246It’s been about one year since Oracle acquired NetSuite for a neat $9.3 billion. At Oracle Open World’s SuiteConnect, we got a glimpse into what’s new and what remains unchanged for the now 19-year old NetSuite.

What’s the Same?

 

Founder and CTO Evan Goldberg took the keynote stage, held a Q&A with Oracle CEO Mark Hurd, leading off with what remains in the “business as usual” category. NetSuite will continue to promote the benefits of cloud versus on-premises solutions, and the advantages of integrated business application platforms over disjointed, point solution “hairballs.” In addition, Goldberg reiterated that NetSuite will continue to focus selling to fast-growth companies with 5 to 1500 employees, and on the seven vertical markets it currently targets: wholesale distribution, manufacturing, software, retail, services, nonprofits and advertising media and publishing.

What’s New?

On the what’s new front, Goldberg discussed how NetSuite will leverage Oracle resources on both product development and sales fronts. In terms of product development, Goldberg noted that the acquisition makes it easier and faster for NetSuite to integrate Oracle technology into its solutions. To that end, NetSuite announced:

  • The release of the Oracle NetSuite Planning and Budgeting Cloud Service (PBCS), which add more sophisticated financial planning and budgeting capabilities into NetSuite’s solution.
  • Plans to leverage Oracle resources to deepen its industry focus, developing more industry-specific features for sub-verticals within its targeted industries, which currently include retail apparel, university bookstores, fashion accessories and advertising agencies.
  • Oracle Blockchain Cloud Service is now available to SuiteCloud customers and partners, enabling access to distributed ledger technology.
  • Integration of Oracle’s Zero Data Loss Recovery Appliance for recovery and back-up to improve performance and upgradeability–building on the 99.99% uptime that NetSuite has enjoyed over the past 12 months.
  • The opening of a new Chicago-area data center, based on Oracle infrastructure. NetSuite also has five more data centers slated to go live in Europe and Asia in the next several months.

NetSuite also announced that SuitePeople, its unified, cloud-based HR offering, is now available.

On the sales and marketing front, NetSuite intends to piggyback on Oracle’s international sales and marketing resources. While NetSuite sales teams will continue to operate in established NetSuite territories, NetSuite will use Oracle’s sales and localization resources to expand its footprint in new geographies. Oracle sales reps will be compensated for selling either NetSuite or Oracle solutions.

Summary and Perspective

It’s always dicey to predict how well a fish can swim once it’s swallowed by a whale. This is especially true in cases where the little fish has made a big splash in the SMB market, and the big fish has a large enterprise focus. In this case, however, things appear to be coming together well for NetSuite, for a few key reasons.

First, NetSuite and Oracle have always been pretty tightly coupled. Oracle’s database is at NetSuite’s core, and Larry Ellison has had a majority stake in NetSuite since the early days. In fact, NetSuite was briefly branded as Oracle Small Business Suite back in 2001. In addition, both Evan Goldberg and former NetSuite CEO Zach Nelson spent years at Oracle prior to NetSuite, providing valuable cultural and organizational insight and synergy.

Second, Oracle’s vast resources enable NetSuite to grow faster than it could have on its own. Oracle provides NetSuite with much greater capabilities to localize and sell into new geographies, and with infrastructure and data center support that free NetSuite up to focus more on building out applications and vertical capacities and less on plumbing.

Finally, as a brand under the Oracle umbrella, NetSuite is freed from the burdens of operating as separate, public company. Since it’s doubtful that Oracle will split out NetSuite’s results, NetSuite gets to fly under the Wall Street radar.

As long as Oracle gives NetSuite the freedom it needs to make the best choices for its customers, it looks like the benefits to NetSuite will outweigh the drawbacks.


Source: Laurie McCabe’s Blog

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