Less than a year after it was acquired by Oracle, NetSuite was on the main stage at Oracle’s annual OpenWorld conference in San Francisco last month. NetSuite Founder Evan Goldberg was joined on the stage by Oracle CEO Mark Hurd to discuss the strategy and plans for the combined business moving forward.
Much like his address at NetSuite’s own SuiteWorld conference in April, Hurd’s message was about more – more investment in development, sales and global expansion. What follows is Goldberg and Hurd’s conversation, edited for length and clarity.
Evan Goldberg: Mark, some of these people coming from the NetSuite world want to learn a little bit more about Oracle. What's the big-picture strategy for Oracle?
Mark Hurd: Evan, We've been on a journey for the past several years to really embrace the whole movement of our industry to the cloud.
This movement to the cloud is not just a technical thing. This is a business model, generational change in the way we think about IT. And Oracle's strategy has been to not resist that, but embrace it.
And we began years and years ago working at the application layer, and really trying to rebuild the applications of the company, build a suite of best-of-breed applications. So each application had to be the best. And we worked real hard on that. We're still working on that.
So our strategy is to continue to support all of our on-premise capabilities, but now build out the most complete, the most modern, the most advanced cloud portfolio on the market, at the application, platform, and infrastructure layer.
Evan Goldberg: And so, how do you see NetSuite fitting into this overall strategy?
Mark Hurd: Our relationship with NetSuite over the years has always been very collaborative. NetSuite is built on an Oracle platform. So, there's a lot of synergy between the two. But we really believe the two biggest categories in the industry, in software, have been database and ERP.
Our view was, the best ERPs in the market were ours, Fusion, and NetSuite. Now, targeted a bit at different markets -- NetSuite really originated in what you would think of as small and medium business. And we historically have been focused on some of the bigger, most complicated companies in the world.
And so our view was, this was a perfect complement to what we were doing, and that together we have the two most successful, advanced, modern finance and ERP systems in the world.
Evan Goldberg: And what do you think are some of the things we've accomplished in the almost year we've been working together?
Mark Hurd: Our view was to try to give NetSuite all the best of Oracle, and to be very frank, make sure none of the other parts of Oracle that could potentially hinder our progress with NetSuite would get involved.
So far we've seen an acceleration of growth, which is extremely encouraging.
Evan Goldberg: Can you talk a little bit about how these companies can take advantage of the broader Oracle platform, some of the things you're doing in infrastructure and platform as a service? Is that something these people should be looking at?
Mark Hurd: I think it's all of the above. Our strategy to support NetSuite is pretty simple -- accelerate its opportunity into the market. One, we want to increase distribution, to simply get more points of presence, more salespeople, more partners-- and that is a global statement.
If you look at most of the SaaS companies that have gotten any scale, they have very common characteristics. They're generally pretty good in the U.S. It's tougher when you get outside the U.S., as you know. We have a tremendous breadth of distribution globally, and we certainly want to take advantage of that. So, growing NetSuite outside the U.S., is a big opportunity for us.
Second, to put more R&D into NetSuite, frankly to localize for more countries, which we think is a big opportunity. You can go to all of these markets that have big SMB market opportunities , opportunities for us to localize the product and get into play.
Then, to bring our portfolio of capabilities, whether it's budgeting and planning, HR, any of the capabilities that we have, and integrate those in with the NetSuite portfolio.
Evan Goldberg: We've talked a little bit today about industries, and what do you see for NetSuite in terms of industries, and more broadly at Oracle? Industries and verticals, and how they play into the strategy.
Mark Hurd: To some degree I think NetSuite has done in some ways even a better job than we have at Oracle with some of the things you've done -- not so much around verticals, but even micro-verticals. And I've been really impressed with the thought about going after not just retail, but actually segments like apparel or bookstores, et cetera.
Evan Goldberg: One of the biggest [advantages of the speed we can do things no longer being a private company] has been SuiteSuccess, and bringing a full edition to different parts of the market. How do you see that panning out, and what are some of the lessons from that that some of these companies might benefit from?
Mark Hurd: So, the ability to go at these rapid implementations, the ability to get these done quickly, to get these done right, again, I think is a significant initiative on the part of NetSuite -- frankly, something we at Oracle want to do more of.
Evan Goldberg: Great. So you've got the stage. You're my boss's boss, so you can stay up here as long as you want. Any closing thoughts?
Mark Hurd: For those of you that are NetSuite customers or prospective NetSuite customers, to be very clear, we did not spend $9.3 billion dollars not to invest in NetSuite. Our strategy from the beginning was to not only acquire the company, but to invest in the company.
To increase the number of countries we can bring the product into, which meant for us increased sales expense, increased R&D expense in the product, increased number of micro-verticals, bring the broader Oracle suite of capabilities in to help NetSuite increase its portfolio. And that's what we're going to do.
I think this is going to turn out to be as exciting, if not the most exciting, acquisition that Oracle has ever done.
**Statements in this article relating to Oracle’s future plans, expectations, beliefs, and intentions are “forward-looking statements” and are subject to material risks and uncertainties. Such statements are based on Oracle’s current expectations and assumptions, some of which are beyond Oracle’s control. All information in this article is current as of October 31, 2017 and Oracle undertakes no duty to update any statement in light of new information or future events.
Source of the blog: Netsuite blog