Oracle closes $9.3B deal for NetSuite

On November 7, Oracle completed its acquisition of NetSuite for $9.3 billion (US).

The deal marked the end of a standoff between Oracle and T. Rowe Price, NetSuite’s largest shareholder. The latter felt that Oracle’s $109 per share offer price significantly undervalued the company, and was seeking an offer price of $133 per share. In the end, 53% of eligible voters agreed to tender their shares by the November 4, 2016 deadline.

At a minimum, NetSuite gives Oracle an entry point to the small and mid-sized business segment – one for which it had no real offering.

The implications for other core portfolio applications remain to be determined.

For example, are there any long-term implications for JD Edwards? At present, JDE and NetSuite are different products aimed at different markets. JDE is targeted at mid-size and smaller enterprise size manufacturers and distributors.

As Oracle pushes its products to the cloud, one has to wonder whether Oracle will re-architect JDE for the cloud. As an alternative, Oracle could decide to extend NetSuite functionality in an effort to satisfy both upmarket and downmarket companies with one platform.

In some respects, the latter scenario might make sense if SuiteCloud (the NetSuite development platform) has sufficient capabilities to support JDE functionality and performance needs. From Oracle’s perspective, it might want to avoid the complexity and cost associated with supporting multiple applications and development platforms.

Having said that, this is pure speculation. As always, the devil will be in the details.