It's almost one year since Oracle completed its acquisition of cloud-based ERP NetSuite. NetSuite says it is gaining the benefits of Oracle without pitfalls.
Re-iterating why Oracle acquired NetSuite, CEO Mark Hurd says the movement to the cloud is not simply a technical thing, it's a real business model and Oracle's strategy is to embrace that. "We started years ago at the application layer to rebuild the company, to build a suite of best-of-breed applications. We worked hard on this and will never stop. We will continue to support all our on-premises capabilities but our strategy is really to build out the most complete, most modern cloud portfolio on the market, including the platform and infrastructure layer," he said.
"We believe the two biggest software categories have been database and ERP, and we believed the best two ERPs in the market were ours, Fusion, and NetSuite," Hurd stated.
"NetSuite originated in small to medium business and we had focused on some of the biggest and most complex companies in the world so our view was this was a smart complement, and now we have the two best ERP systems covering companies of all size."
"The energy and spirit of all the acquisitions we do are different," Hurd said. "We improvise depending on the situation and company we're working with. In this case, NetSuite brought a tremendous team. We wanted to give NetSuite all the best of Oracle, and not let any of the parts of Oracle that would hinder NetSuite get involved, and so far we've seen an acceleration of growth and the progress has been fantastic."
{loadposition david08}Lee Thompson, NetSuite's Group Vice President and General Manager JAPAC, says there are two differences with NetSuite since the Oracle acquisition.
First, NetSuite gets the benefit of the Oracle brand and logo. "In Australia," he says, "NetSuite already had a brand, but when we try to push into other markets and geographies people have heard of Oracle even if they haven't heard of NetSuite, so it gives us great brand recognition."
Secondly, Oracle has "phenomenally deep pockets," he says, "and can invest aggressively in new markets. We plan to grow into 12 to 28 countries in the next 12 months."
"We're seeing tremendous growth and success. Oracle has been leaving NetSuite to operate as an independent operation as a Global Business Unit, or GBU, but we get the brand and the funding," Thompson said.
Part of this growth is an official presence in New Zealand for the first time. NetSuite uses a hub and spoke model, Thompson explains. "A hub has resources - sales, pre-sales, marketing and business development - all centralised in a single location. We have five hubs in APAC and Japan. A spoke is a satellite sales office where we have NetSuite people so they can get closer to the customer and partners. We've opened up in Auckland only just recently and this augments our relationships with the partners," he said.
Graeme Burt, Senior Director, Growth and Emerging Business, JAPAC, concurs, adding "The customers will see much more presence from NetSuite and its partners, with complementary skills in the marketplace to help them. The customer piece is the most important part for us. We want to drive customer outcomes and end up with success stories."
Evan Goldberg, founder and Chief Technical Officer, NetSuite, says the Oracle acquisition "has allowed us to really focus on the customer size I think we're best for - bigger than QuickBooks, but smaller than what would need Oracle or SAP."
Oracle, with its many cloud apps, and NetSuite, with its singular cloud app, have come from different places. "Oracle has rebuilt everything from scratch in native cloud and Java, but their design centre is looking at companies who consume software in independent business centres. They provide for different applications which use a common data model," Goldberg says. "We came from a different place at NetSuite. Everything must be done once, and one way, and when we added Human Capital Management in SuitePeople we used the employee record but enhanced it. Everywhere you go it's the same employee record. This only scales so high, it's not plausible to implement one application in these very large companies," he said.
"As we went upmarket we found we were a piece of the puzzle. It makes us happy to do what we're doing and now we're back to what we designed around," Goldberg says.
"Prior to the acquisition, Oracle signalled its intent to stay the course with NetSuite," Thompson says. "and to retain NetSuite for small to medium organisations, to continue to develop the technology and to invest in the cloud technology."
"Oracle has been consistent in doing what it said it would do."
"Oracle said it wanted to invest in NetSuite, giving it more localisations and more countries, and it has delivered this. We've seen this investment continually and ongoing," Thompson says. "The key message really is Oracle has given NetSuite more, faster."
As to whether Oracle's acquisition puts the handbrake on NetSuite adding any more significant functionality like it did in SuitePeople, Goldberg says, "Larry [Ellison] knows better than anyone we build one application. Larry spoke to our engineers and said he gets our value proposition and how we're architected to deliver on that value proposition. We will integrate things we don't see as being an important part of the core. We look at everything and ask does this have tight entanglement and if it does, then it's a candidate for addition, otherwise, we will integrate with partners."
Regarding what's on the NetSuite roadmap Goldberg said "We're going to deliver over the next 18 months on the promise I made at the first SuiteWorld, the thing that has got the most applause, which is super-easy pivoting of NetSuite data. It will be an analytics tool which makes it super-easy to find the data."
"There are a couple of different ways to get data out of the system, but our customers have told us for several years that's one of the weakest parts of the user experience," he stated.
"We have a unified analytics tool built into the core which we've been working on for several years. I know it's good; when I showed the first prototype five years ago it got the biggest applause. We've shown hints of it is, but we're really going to deliver."
"Expanding international is the number one initiative, but next-gen analytics is the number one project. We have a team cranking away and I'm really, really excited about it. It will be real-time analytics built into NetSuite," Goldberg says.
The writer is attending Oracle Open World 2017 as a guest of the company.