Oracle to spend $9.3 bn to buy loss-making NetSuite

Oracle CEO Mark Hurd
Oracle today announced its agreement to buy loss making NetSuite, in a deal that valued the ERP software company at $9.3 billion.

The all cash deal will enable Oracle to expand customer base. NetSuite software is used by more than 30,000 businesses.

NetSuite’s revenue for the second quarter of 2016 was $230.8 million (+30 percent). NetSuite is a provider of cloud-based financials / ERP software for enterprise. Oracle aims to expand its ERP and cloud business to take on SAP and

“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 Oracle CEO Mark Hurd.

NetSuite will benefit from Oracle’s scale and reach to accelerate the availability of cloud solutions in more industries and more countries.

“NetSuite has been working for 18 years to develop a single system for running a business in the cloud,” said Evan Goldberg, founder, chief technology officer and chairman at NetSuite.

NetSuite posted a net loss of $37.7 million, or $(0.47) per share for the second quarter of 2016, as compared to a net loss of $32.3 million, or $(0.41) per share, in the second quarter of 2015.

Oracle said a Special Committee of Oracle’s Board of Directors consisting solely of independent directors conducted the evaluation and negotiation of the transaction to buy NetSuite for a whopping $9.3 billion. In addition, the Special Committee unanimously approved the transaction on behalf of Oracle and its Board of Directors.

Oracle acquisitions


AddThis (January 2016)
BigMachines (October 2013)
BlueKai (February 2014)
Collective Intellect (June 2012)
Compendium (October 2013)
Crosswise (April 2016)
Datalogix (December 2014)
Eloqua (December 2012)
Involver (July 2012)
LiveLOOK (June 2014)
Maxymiser (August 2015)
NetSuite (July 2016) (pending)
Responsys (December 2013)
SelectMinds (September 2012)
Taleo (February 2012)
TOA Technologies (July 2014)
Vitrue (May 2012)

Industry Solutions

Communications and Media

Acme Packet (February 2013)
Tekelec (March 2013)

Construction and Engineering

Instantis (November 2012)
Skire (July 2012)
Textura (April 2016)

Health Sciences

ClearTrial (March 2012)

Hospitality and Retail

MICROS Systems (June 2014)


DataRaker (December 2012)
Opower (May 2016)


Bitzer Mobile (November 2013)
CloudMonkey (August 2015)
Nimbula (March 2013)
Ravello Systems (February 2016)
StackEngine (December 2015)

Servers, Storage, and Networking

Corente (March 2014)
Front Porch Digital (September 2014)
GreenBytes (May 2014)
Nirvanix (December 2013)
Xsigo Systems (July 2012)

Oracle revenue

Meanwhile, Oracle reported Q4 revenues of $10.6 billion (–1 percent). Cloud plus On-Premise Software revenues were$8.4 billion (flat). Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $690 million (+66 percent). Oracle said Cloud revenues, including infrastructure as a service (IaaS), were $859 million (+49 percent).

Oracle added more than 1,600 new SaaS customers and more than 2,000 new PaaS customers in Q4. In Fusion ERP alone, it added more than 800 new cloud customers. Oracle has nearly 2,600 Fusion ERP customers in the Oracle Public Cloud – that’s 10-times more cloud ERP customers than Workday.

CRM market

“The two organisations will complement each other well and this arrangement as of now appears to be a good move to leverage the market with the synergy generated by both organisations. In addition, Oracle will be able to expand its customer base,” said D.D. Mishra, Research Director at global market research firm Gartner.

The emerging markets have strong demand for ecommerce and CRM (Customer Relationship Management) suites and this will make the market more competitive.

“We see a growing shift towards SaaS (Software as a Service) and this business is expected to grow fast. Globally, we see almost 18.8 percent CAGR (Compound annual growth rate) growth of SaaS between 2015-2020. Many businesses will leverage this situation and strengthen SaaS portfolio,” he added.

In India, this market is expected to change much more rapidly at CAGR 25.6 per cent between 2015-2020.

In a bid to cater to the needs of organisations that seek independence and security while transitioning to the cloud to reap its potential benefits, global software major Oracle recently launched a service in India to bring its public cloud in customers’ data centres, IANS reported.

The new suit of offerings is called Oracle Cloud and involves a server managed and maintained by Oracle. It runs on-premises (in the customer’s data centre) and behind the firewall of the client allowing the chief information officers to easily move business critical applications to cloud.

Baburajan K
[email protected]