“NetSuite improves Oracle’s ERP position to help win the Cloud applications war,” McGrath said.
“Amid Oracle’s efforts to build out its Cloud portfolio and become the leading Cloud vendor, ERP has not been the focus for prior acquisitions.”
Instead, as McGrath explained, Cloud acquisitions over the last two‐and‐a‐half years have predominantly centred on building out Oracle’s Marketing Cloud and Data Cloud capabilities.
While those services differentiate Oracle from other Cloud vendors and position it well in the marketing Cloud space, Ellison said, “The leading applications vendor in the Cloud this generation will also be whoever wins the ERP war.”
For McGrath, Oracle has not been the one winning the Cloud ERP war — Oracle foe SAP has. But together NetSuite and Oracle can threaten SAP’s position more aggressively.
“Though these vendors have seen initial traction in the Cloud applications space, the shift of ERP deployments to public Cloud is slower overall than CRM and HR workloads because of the complexity of ERP implementations and demand for industry‐specific customisations,” McGrath added.
Overall, McGrath said Oracle’s pending acquisition of NetSuite is a “logical merger” of two businesses that have similar aspirations to be the single software provider running a customer’s entire business.
NetSuite’s current subscriptions will add to Oracle’s revenue base as Oracle aims to accelerate Cloud growth to reach over $10 billion in annual SaaS and PaaS revenues.
“NetSuite’s competitive Cloud ERP solution will also improve Oracle’s competitiveness as it challenges Salesforce, SAP and others for Cloud applications dominance,” McGrath added.
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