What the NetSuite Acquisition by Oracle Means and How It Can Help SMBs

Organizations change significantly over the years to adapt to technology and user trends in order to better serve their client base. However, businesses might not be able to expand into new industries or attract the type of audience they want on their own. Acquisitions have become a way for companies to broaden their portfolio and reach people in innovative ways.

Many tech giants are purchasing other tech organizations to overcome obstacles and jump into lucrative markets. When Oracle announced it was buying cloud-based ERP Cloud provider NetSuite in 2016, it served as another example of a company looking to expand its opportunities. In this article, we will take a look at what the NetSuite acquisition means, and how it can help small and medium-sized businesses.

Oracle reaching new markets

Customer needs have vastly changed over the years, and vendors have been asked to keep up. VentureBeat noted that Oracle has been shifting aggressively to the cloud, as its custom-built apps are becoming less popular. Part of the fall in demand could include the expense and maintenance required for such programs. Oracle’s purchase of NetSuite serves to bolster its competitive position in the cloud, advance its own cloud-based capabilities and reach small to mid-tier markets.

Oracle's purchase of NetApp will help cater to SMB needs. Oracle’s purchase of NetApp will help cater to SMB needs.

The acquisition has been positive for both parties. Oracle is streamlining the organization by leveraging their current channels and massive resources to help stay ahead of the pack. NetSuite has a firm hold in fulfilling SaaS needs, particularly in cloud-first ERP applications. Supply Chain 24/7 noted that for this partnership to truly work, there will need to be a clear, scalable cloud strategy that appeals to their prospective customer base. This plan will help Oracle and its partners, like NetSuite, better gauge where to go from here and what types of services to add or advance within their portfolios.

How SMBs might benefit

While the full potential of this acquisition is still yet to be seen, there are a few main benefits that are expected to come as a result. Bridgepoint Consulting suggested that Oracle can now focus on enterprise cloud solutions while NetSuite continues to serve SMBs. This will help mitigate the distraction of reaching new vertical markets, and enable the organizations to provide outstanding alternatives to other cloud platforms. Oracle will lean on NetSuite to learn how to support cloud software, while NetSuite concentrates on product development. The acquisition provides each side with critical resources and capabilities to set them on firm financial footing and serve customers effectively.

Not all solutions fit all organizations, which is why Oracle’s acquisition comes at such a critical time for both businesses. Holger Mueller, principal analyst at Constellation Research, told TechTarget that the one-size-fits-all have left many customers to choose one solution over another because of where they feel their needs are going to be met. However, competitors have been following two-tier approaches to suit a variety of requirements. As NetSuite integrates with Oracle, it’s only a matter of time to see how their offerings and strategies shift to serve organizations of all sizes and needs.

Taking advantage of these systems

Oracle and NetSuite products are both essential parts of supply chain and logistics management. This acquisition will help streamline processes within these areas and provide seamless interoperability across the board. Users can take advantage of solutions that fit their needs and receive insights to make the best decisions possible. While it’s still unclear how offerings from each company may interact, customers can rest assured that there are improvements being made on both sides to better serve their needs.

Oracle’s $9.3 billion acquisition of NetSuite is another major step forward in competitive advancement within the cloud-based technology space. As user demands continue to shift, this partnership could yield significant advantages and help the organizations better focus on their value propositions. To learn more about how to benefit from a shift to the cloud with Oracle and NetSuite, contact Inspirage today.

Atul Jain

Atul Jain | Key Contributor

Atul Jain is a Senior Practice Director of Consulting at Inspirage where he manages large and mid-size implementation projects and is responsible for solution design and implementation using Oracle and NetSuite products.