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The uptake of cloud ERP is accelerating, and the largest adoption wave is imminent. Oracle's acquisition of NetSuite is a bold statement of the vendor's intent to offer the most complete cloud ERP solution available to the market. The addition of NetSuite's product set to the Oracle Cloud ERP solution offers enterprises attractive options and signals Oracle's commitment to supporting industry-specific needs in a modern and agile way.

The customer shift to cloud ERP is on

With the acquisition of NetSuite, Oracle is making a $9.3bn bet that cloud ERP is entering the steepest part of the adoption curve. As a rule, the technology industry embraces a culture of taking the big bets and making risky moves, and Ovum believes that the odds favor this bet paying off for Oracle as all signs point to accelerating cloud ERP adoption. Recent data from Ovum’s ICT Enterprise Insights survey suggests a marked increase in spending plans for software-as-a-service (SaaS) from FY2014–15 to FY2015–16. This type of shift signals that the "herd" is now moving with regard to the migration of mission-critical applications, such as ERP, to the cloud and not just spending incremental amounts on SaaS applications for greenfield or other solution areas, such as CRM.

As Oracle's cloud strategy has unfolded over the past 36 months, its commitment to offering the enterprise a diverse array of delivery options has been clear. Great efforts and progress have been made to debunk the "one true cloud" myth. Consequently, it is not surprising that Oracle is adding the NetSuite set of products to its ERP lineup. Given the mission-critical nature of ERP, enterprises will consider their unique needs closely when selecting a solution in this category. The addition of NetSuite brings more options to the Oracle ERP cloud offering, especially among mid-sized customers where Oracle is already finding some success, thereby increasing the odds for many types of enterprises to find the right fit.

It is also critical for enterprises to recognize that NetSuite supports a broad array of verticals but does so with a largely horizontal product suite. Ovum considers this a more modern and agile approach because industry investments are directed to the individuals that build, sell, and implement the solutions, which makes the adoption of best practices and configuration the route to supporting industry-specific requirements rather than simply adding solutions and extensions. The development of product development, sales, and professional services teams that are rich in industry subject matter expertise and experience will be an increasingly important differentiator in cloud ERP solution selection over the next accelerated adoption wave. The addition of NetSuite further expands Oracle's already considerable investment into supporting industry business needs.


Further reading

"Oracle agrees to acquire NetSuite – a positive move for midmarket customers, NetSuite, and Oracle," IT0020-000222 (July 2016)

"Oracle defines the path to modern HCM," IT0022-000692 (May 2016)

"Oracle finds the right balance between industry expertise and horizontal firepower," IT0008-000235 (April 2015)


Nicole Engelbert, Director of Research & Analysis, Ovum Technology

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