NetSuite Inc., a provider of e-commerce and business operations software to manufacturers, distributors and retailers, is returning to the mother ship.

Funded largely by Oracle Corp. founder Larry Ellison when it launched in 1998, NetSuite is being acquired by Oracle in a $9.3 billion deal, Oracle announced today.

NetSuite was developed as a lighter-weight, less expensive version of Oracle’s high-end business software and has become a significant provider of e-commerce technology, both to retailers and to companies that sell online to businesses, government agencies and other large organizations.

Oracle itself became a major e-commerce technology provider with its 2010 acquisition of ATG, a provider of e-commerce and related software to big companies, including manufacturers, distributors and retailers. NetSuite primarily serves smaller companies in the same industry groups. That difference is reflected in their client base. Oracle counts 15 companies of the B2B E-Commerce 300 companies as clients of its e-commerce technology platform, including Chevron Corp. (No. 2), Archer Daniels Midland (No. 17) and United States Steel Corp. (No. 79). NetSuite counts 24, including GoPro (No. 123), Tacoma Screw Products Inc. (No. 205) and Capitol Scientific Inc. (No. 236).

NetSuite has separate technology groups dedicated to manufacturers and to distributors.


Andy Hoar, principal analyst covering B2B e-commerce at Forrester Research Inc., says NetSuite will benefit from Oracle’s global sales force and from connections with Oracle’s large network of channel partners, including major systems integrators that deploy technology systems for large companies. But he asserts that the acquisition will benefit Oracle even more by providing it with a strong cloud-based enterprise resource planning, or ERP, system it can sell as it tries to build its market among mid-market companies.

NetSuite is well known as a provider of ERP technology—including a suite of software applications for managing such operations as inventory, finances and customer activity—to mid-market companies, Hoar says. NetSuite integrates its ERP suite with its SuiteCommerce e-commerce software, which NetSuite delivers under a software-as-a-service model that customers access via a web browser instead of running on their own infrastructure. It remains to be seen, Hoar adds, how Oracle will position SuiteCommerce and Oracle’s ATG e-commerce software—which is primarily sold as licensed software that sits on a client’s own infrastructure—along with its ERP offerings to mid-market and large companies.

NetSuite also released its second quarter earnings today, reporting:

  • Revenue increased 30% to $230.8 million.
  • Cash flow from operations increased 53% to $36.7 million.
  • A net loss of $37.7 million, an increase of 16.7% from a net loss of $32.3 million in the same period a year ago.
  • On a non-GAAP basis that excludes certain items, net income was $6.6 million, nearly four times the company’s non-GAAP net income of $1.7 million in the second quarter of 2015.

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