On November 7, 2016, the Oracle-NetSuite acquisition, which was first announced back in August, came to a close with a final cost of $9.3 billion. A more comprehensive look into the acquisition’s history can be found on NetSuite’s website.
In an email sent to NetSuite partners and customers jointly from NetSuite CEO Zach Nelson, founder and CTO Evan Goldberg, and president at COO Jim McGeever, the company wrote, “This transaction accelerates NetSuite’s mission of helping our customers succeed. Gaining access to Oracle’s tremendous resources and powerful technology stack makes this combination a winner for our customers. NetSuite expects to utilize Oracle’s global scale and reach to accelerate the availability of our solutions in more industries and more countries.”
The email continued: “Oracle is committed to protecting and enhancing customer investments in NetSuite solutions and Oracle plans to invest heavily in both products — engineering and distribution. … As we work with Oracle, we are 100% committed to keeping NetSuite innovative and nimble, with our top priority to ensure a seamless experience for all of our clients and partners.”
The Oracle-NetSuite relationship is much longer than these recent press releases and emails might suggest. Evan Goldberg founded NetSuite back in 1998, after spending eight years with Oracle as a vice president, where he, according to his executive biography, was “involved in a variety of projects, all focused on making powerful database technology more accessible to users.”
On top of that, Larry Ellison owns 40 percent of NetSuite shares, so it seems a little bit like a grand plan to send Evan off to build NetSuite as an independent company, with the plan to pull it back once it was robust and sustainable.
That said, the move to acquire NetSuite wasn’t particularly easy for Oracle and Larry Ellison. He was supposed to be able to close the deal without a problem, but institutional shareholders thought the deal wasn’t good enough. After a lot of back in forth, it turned out that the opposition force didn’t have the votes necessary to stop the purchase. Ellison’s primed to make roughly $3.5 billion on it deal. Insiders might remember that Marc Benioff, the current CEO of Salesforce, also once worked at Oracle, much like Evan Goldberg—could that be an acquisition in the making?
Speculation aside, we’re incredibly excited for this new phase of NetSuite. We truly believe that Oracle bought NetSuite for NetSuite, not as an “acquihire” to move NetSuite’s talent to a different platform. Oracle will invest and escalate investment to help continue NetSuite’s position as the No. 1 cloud-based ERP system. Oracle financing could launch the platform to new heights, and help it enter markets that NetSuite isn’t strong on right now.
For example, we’ve had clients talk to us about the Defence Contract Audit Agency (DCAA), which defines regulations that defence contractors need to comply. It’s remarkably complex work, and with Oracle’s investment, we think it’s well within NetSuite’s capability.
For Bi101 and our customers, it means additional Oracle functionality, and a more well-rounded total solution. We’re excited. It’s time for the next generation of making businesses stronger through the cloud.