Both Oracle and NetSuite’s cloud service offerings aimed at enterprise customers will continue to operate and ‘coexist’ in the marketplace.
According to a statement made by Oracle CEO, Mark Hurd, “NetSuite and Oracle’s offerings are complimentary. Oracle intends to continue to invest in the engineering and distribution aspects of both companies going forward.”
NetSuite claims a dominant position in the cloud enterprise resource planning (ERP) space, which includes offerings to help businesses track supply and demand, inventory, accounting, customer relationships (CRM) and HR.
Oracle in general has been an aggressive acquirer of smaller companies throughout 2016, with recent pick-ups including Opower and Textura. Oracle’s acquisition of NetSuite dwarfs its previous 2016 acquisitions in total deal value.
Although Oracle and NetSuite’s offerings are similar, Netsuite will offer Oracle access to smaller sized companies than their usual clientele. It could also give Oracle some additional competitive edge in taking on its primary rival, Salesforce.
According to Forbes, Cloud is already a multi-billion dollar business for Oracle, but pure cloud software still represents a fraction of the company’s overall business, with cloud software as a service accounting for just 6.5% of revenue in its Q4 fiscal earnings.
Oracle Chairman, Larry Ellison’s major investment in NetSuite has long fueled speculation that the companies would unite at some point. In this case, NetSuite decided that the company’s future as an independent entity would no longer grow faster than if part of the massive Oracle operation.