If there was any remaining doubt that the ERP market has shifted to the cloud it was dispelled last week when Oracle announced its intent to buy NetSuite for $9.3B. Despite already owning four different ERP products the company has clearly recognized that native, multi-tenant SaaS products like NetSuite, Plex, Workday, and Salesforce.com are the future of enterprise software. Adding a fifth ERP product will certainly create another set of positioning headaches for Oracle, which has struggled for years to explain the role of Oracle ERP Cloud (aka Fusion) to both existing customers and prospects. Oracle co-CEO Mark Hurd claims that NetSuite’s products are “complementary” but, in fact, they represent a nearly 100 percent overlap in functionality and targeted verticals with his existing ERP offerings.
Some press and analysts have jumped on the idea that this acquisition will make Oracle a major player in mid-market ERP. The reality is that this is much more likely to damage NetSuite’s reputation among smaller companies. There is no indication that Oracle has the culture, products, or pricing to serve SMB buyers.
While Oracle is buying nearly a billion dollars of cloud revenue this won’t make them a cloud vendor either. What happens when these giant legacy software companies buy a cloud provider is that they slow them down, destroy their
Even post-acquisition, the vast majority of Oracle’s customers and revenue will be tied to old, on-premise software. Over the next few
This isn’t all bad
Plex will now become the largest independent native cloud ERP provider,
Want to learn more? Please also read our posts: Why Cloud? SaaS Matters, How Cloud ERP Drives Manufacturing Innovation and Debunking Cloud Myths: All Cloud ERP Is Not the Same.
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