Last week, Oracle snapped up a well-established ERP vendor for a cool $9.3 billion. The NetSuite acquisition should be completed this year, and it may raise questions for existing and prospective NetSuite users. Namely, what does this mean for them?
Reports from Oracle and NetSuite are, as expected, optimistic. “Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Mark Hurd, Chief Executive Officer, Oracle, in a press release. “We intend to invest heavily in both products—engineering and distribution.”
In a way, it’s a win-win for both companies. They do both provide ERP software, but the NetSuite acquisition gives Oracle a foray into the SMB market. With rival SAP having already made great inroads into SMBs (80 percent of its customers are small to midsize enterprises), Oracle is making a strategic move for itself.
Why the NetSuite acquisition may not be so great
However, while Oracle maintains that it’s committed to developing NetSuite, there’s a darker side to it. Oracle’s been pushing its customers to its cloud, not necessarily a bad thing in today’s Big Data-dominated world. NetSuite provides a way to unlock the SMB market, which is more likely to choose a cloud-based ERP suite over something installed on-premise due to the costs related to implementation and maintenance.
Oracle already has a lot of cloud offerings, though. The NetSuite acquisition may put customers on the Oracle cloud, but is Oracle’s cloud becoming too fragmented? Oracle has its ERP and CRM offerings – as well as a track record of application casualties. PeopleSoft, JD Edwards and Siebel users understand this all too well.
Fortunately, NetSuite isn’t the only game in town for cloud-based ERP. SMBs have their choice of software. The top vendors, aside from NetSuite, are:
SAP is pretty much the next logical choice for SMBs that need an enterprise-grade ERP system that runs on the cloud. SAP’s offerings include Business ByDesign, which was SAP’s first cloud ERP product. It’s marketed toward slightly larger enterprises, but it’s worked quite well for smaller businesses. Business One is also available as a cloud-based ERP system, and SAP recently released SAP Anywhere, a lightweight ERP system that packs a powerful punch.
Microsoft bills Dynamics as “the complete ERP solution for your small business.” It can be deployed on the Microsoft Cloud, making it attractive to SMBs looking for a way to avoid costly infrastructure investments.