Oracle buying NetSuite for $9.3bn to expand its cloud play

USA: To boost its cloud services, Oracle is buying NetSuite at approximately $9.3 billion- a move which will help Oracle in competing rivals like Salesforce, Workday, Microsoft, Amazon and SAP.

“NetSuite will benefit from Oracle’s global scale and reach to accelerate the availability of our cloud solutions in more industries and more countries,” said Zach Nelson, CEO, NetSuite. Founded in 1998, NetSuite was one of the first cloud companies to distribute business applications over the internet.

Zach Nelson lead Oracle’s marketing operations in the 1990s, while Oracle co-founder Larry Ellison happens to be NetSuite’s largest investor. Ellison and his family owned more than 40 per cent of NetSuite’s shares.

“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Oracle CEO Mark Hurd.

Oracle will be able to expand its customer base, said DD Mishra, Research Director at Gartner. “The emerging markets have strong demand for e-commerce and CRM suites and this will make the market more competitive. We see a growing shift towards SaaS and this business is expected to grow fast. Globally, we see almost 18.8 per cent CAGR growth of SaaS between 2015-2020. Many businesses will leverage this situation and strengthen  SaaS portfolio. A competitive market will create breeding grounds for innovation in this space. In addition, we will see Industry will continue to consolidate due to impact of digital business and heterogeneous demands from customers fuelled with crowded supplier market.”

The transaction is expected to close in 2016.