Oracle Expands Its Cloud Presence with $9.3 Billion NetSuite Acquisition

August 02, 2016

By Michael Guta - Contributing Writer

The adoption and growth of cloud now has many of the biggest players in IT making key acquisitions in order to ensure they have some kind of presence in the segment. While Amazon was one of the earliest companies to invest in the future potential of cloud computing, it took everyone else some time to finally come around and follow suit. Oracle (News - Alert) is the latest company to make such an acquisition by spending $9.3 billion to purchase NetSuite, which is considered the first cloud company and a pioneer in cloud computing since 1998.

When NetSuite (News - Alert) started out, it did so by delivering business applications over the Internet, which was ahead of its time in the late 90s. As the company continues to evolve it now provides a suite of cloud-based financials / Enterprise Resource Planning (ERP) and omni-channel commerce software. The solutions it provides are currently being used by more than 30,000 companies, organizations and subsidiaries in more than 100 countries around the world.

“NetSuite has been working for 18 years to develop a single system for running a business in the cloud. This combination is a winner for NetSuite’s customers, employees and partners,” said Evan Goldberg, founder, chief technology officer and chairman, NetSuite.

NetSuite has a flexible and powerful development platform that allows organizations to customize the solutions it provides according to their business needs with the new applications. Additionally, it offers today's businesses a cloud infrastructure with enterprise grade services that are reliable, secure and scalable to meet any demand. All of these features are put together in a comprehensive ecosystem with proven third-party applications that seamlessly integrate with existing software and hardware deployments.

The acquisition of NetSuite by Oracle gives it a true pioneer of cloud technology as it continues to add to its Oracle Cloud line of services, including Software as a Service (SaaS (News - Alert)), Platform as a Service (PaaS), Infrastructure as a Service (IaaS) and more. As a provider of enterprise software products, Oracle will be able to give these organizations the tools they need to migrate and implement enterprise cloud services with greater ease.

“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever. We intend to invest heavily in both products – engineering and distribution,” said Mark Hurd (News - Alert), chief executive officer, Oracle.

Spending on public cloud Infrastructure as a Service is forecast to grow to $173B in 2026, and SaaS and PaaS cloud hardware and infrastructure software spending is expected to reach $55B by the same time. For companies that are looking to capture a share of the market but don't have a presence in the cloud sector, they have to make the same type of acquisitions as Oracle just made or merge with key players.

Edited by Alicia Young