NetSuite and Oracle unveil combined plans for global cloud domination

NetSuite and Oracle unveil combined plans for global cloud domination

Oracle CEO Mark Hurd revealed the details of the NetSuite acquisition at SuiteWorld in Vegas



SuiteWorld 2017 was destined to herald a new direction for cloud computing following Oracle's $9.7 billion (ÂŁ7.6 billion) acquisition of NetSuite in November last year. The largest cloud ERP conference in the world has moved across the Serra Nevada mountain range from San Jose, California to Las Vegas, Nevada, where its new parent company added its name to the 2017 event, now called Oracle+NetSuite SuiteWorld.

The elephant in the room that is the acquisition by Oracle was unlikely to remain hidden for too long. Oracle and NetSuite executive vice president Jim McGeever chose to address it head-on from the start, when he opened the conference in place of the notably absent NetSuite CEO Zach Nelson.

"We are now a global business unit inside of Oracle," he explained. "That means all sales, all services, all support and all the development is still contained inside a single business unit. That all reports to Evan [Goldberg] and me, and we report to the CEO of Oracle Mark Hurd. Most important at NetSuite, and for most of our customers, there is almost no change whatsoever."

Oracle CEO Mark Hurd took to the stage at the Sands Expo and Convention Center to outline his plans for NetSuite and for Oracle's transition to the cloud.

"You're going to see 70-80 percent of our market begin to shift from the traditional outcomes to the cloud market," he said. "We are now the fastest growing cloud company."

Oracle plans a decade-long march to the cloud, combining a SaaS suite built on established standards in a platform designed to be extended, for both on-premise and in the cloud.

NetSuite, he said, will enable the company to "set a new standard for customer delight", to lead the ERP market with an unrivaled suite that has the capacity to grow while maintaining its strong partner ecosystem.

"Our strategy is to give NetSuite all the benefits of Oracle scale, and try to give it none of the inconveniences of Oracle's bureaucracies," he said. "That's the trick of scale. My job as a leader is to make sure that NetSuite gets the benefits but none of those problems."

Separate products working together

Hurd pledged to invest more money in R&D and to accelerate the expansion across the globe in two separate phases. Phase one involves an immediate investment in Benelux, the Nordic nations, South America, Germany, Japan, and Southeast Asia. Phase two moves the growth to China, India, Brazil, France, and the UAE.

The global expansion will add Oracle's resources to NetSuite's established product, and aims to drive growth across three areas: data centre, field offices and development centres. The objective for Oracle, said Hurd, is to "almost incubate NetSuite".

"We need to move faster because we want to globalise," he explained. "That means leveraging our data centres, leveraging our distribution, leveraging everything we've got to accelerate the strategy.

"I will not dictate to NetSuite they have to do this or they have to do that, but I will encourage them to leverage all of the technology we have, and bring it to market as tightly integrated as we possibly can."

Hurd was keen to emphasise continuity and growth for NetSuite amid the big changes and to alleviate fears that it would be swallowed by the Oracle behemoth. He promised guidelines rather than red lines on the future direction of the company, to ensure that segmentations and policies aren't so precise that they inhibit innovation.

"I view that we will maintain these two products forever," he promised. "I'm here today to tell you I believe NetSuite's best days are ahead of it not behind it."

In the immediate future, Hurd has set his sights on ERP rival SAP. He slammed the German software giant's investment in the S/4 HANA enterprise resource management suite.

"They focused on rewriting a database and didn't decide to rewrite their core app," he said. "This is a huge mistake, in my opinion.

"I would love to help NetSuite. I would love to take them out. We will do everything in our power short of illegal to help you take market share from them."

"We just think they're betting on the wrong strategy," McGeever agreed. "They're betting a database strategy. We're betting on the cloud."

Next for NetSuite

McGeever took Hurd's place on the stage to elaborate on the details. The business unit will quickly launch into 13 new countries, and the company's data centres will more than double, starting with a fourth in Chicago and then a fifth in Germany before adding further ones in Asia. They will also be adding new development centres, immediately leveraging four of Oracle's.

The plans will take advantage of Oracle's expertise and infrastructure, the developers that they have, their local understandings and partner relationships.

"We're going to hire more people in 2018 than we had total employees in 2012," said McGeever. "We are growing and we are growing fast."

NetSuite will maintain its focus on SMEs but offer customers the opportunity to upgrade to Oracle. An option to mix and match the two will be available if required.

The company has also added two new products to its portfolio: SuitePeople, an integrated and flexible human resources system, and SuiteSuccess, a unified industry programme designed to take companies to the cloud in 100 days or fewer. McGeever calls the process "the stairway to heaven, unlike some of our competition who put you on the highway to hell."

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