Oracle announced the largest transaction in the last 12 years

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Strategically important for Oracle is to strengthen its position in the cloud market. The company develops not only its own cloud services, but also engages in the absorption of smaller players.

For the "clouds" Oracle competes with companies such as Salesforce.com Inc. and Workday Inc., Microsoft and Amazon. Salesforce.com Inc. and Workday Inc. produce software and cloud storage systems.
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On the cloud market, Microsoft still lags noticeably behind Amazon.com, but the results of the recently completed quarter show that the corporation is successfully transforming from a software licensing vendor to a service provider on demand. These results pleasantly surprised Microsoft investors. In the fourth quarter, sales of the cloud division of Microsoft Azure grew by more than 100% over the same period last year.

On July 28, Oracle announced a new takeover. This time, Oracle buys a friendly company, NetSuite, for $ 9.3 billion.

For each share, the buyer will give $ 109 in cash. This is 19% higher than the price ($ 91.5), which was fixed at the close of trading on Wednesday.

Oracle is developing software for the business segment. The company specializes in the release of database management systems and business applications. In addition, it is a supplier of server hardware.

NetSuite is an American company that provides software and services based on cloud technologies upon request. The acquisition of this company will allow Oracle, as expressed by the founder and analyst of Constellation Research Ray Wang, "patch holes" in the strategy for the development of cloud technologies.

Oracle Chairman Larry Ellison and NetSuite Managing Director Zach Nelson worked together earlier: in the 1990s, Nelson was the marketing director at Oracle. Furthermore, NetSuite founder Evan Goldberg worked for some time at Oracle.

Allison is NetSuite's largest investor: according to the annual shareholders meeting, Allison and his family own 40% of NetSuite shares.

For these reasons, many analysts expected a similar outcome. NetSuite takeover is one of the largest deals in Oracle history.


From left to right: Larry Ellison, Zack Nelson

NetSuite is one of the leaders in developing applications for planning and distributing company resources. The company provides these applications upon customer request and uses a subscription model.

NetSuite's most popular products are the NetSuite CRM CRM system, which is among the top 20 best CRM systems in the world according to Gartner, and NetSuite ERP is one of the first ERP systems that began to be distributed solely by subscription. The headquarters of the company is located in California (USA).



On Thursday, NetSuite released financial results for the second quarter. The company's revenue reached $ 230.8 million and grew by 30% year-on-year. NetSuite has offices in Australia, Canada, the Czech Republic, Hong Kong, Japan, the Netherlands, Singapore, Spain, Thailand, the Philippines, Uruguay and the UK.

Oracle plans to continue to purposefully invest in the business of NetSuite, without changing the direction of its development. The company believes that these investments will pay off quickly.

Oracle is known for its aggressive takeover tactics: in recent months, more than $ 1 billion has been spent on the purchase of Opower Inc., a cloud-based utility software, and Textura Corp., which provides similar services to construction companies.

In early July, Oracle and Fujitsu agreed on cooperation in the field of cloud technologies. They will also create a new corporate alliance, whose main task will be to provide corporate customers with solutions directly related to cloud storage. They will be available to Japanese customers, as well as to subsidiaries of these persons in all countries of the world.

Oracle concluded one of its recent multi-million dollar deals in 2014, when the corporation bought Micros Systems Inc. for $ 5.3 billion, selling cash registers connected to the Internet. Other major Oracle acquisitions include forced takeovers from companies like PeopleSoft Inc. for $ 10.3 billion in 2004, BEA Systems Inc. for $ 8.5 billion in 2008, and the purchase of Sun Microsystems Inc. for $ 7.4 billion in 2009.



Following the announcement of the deal during the preliminary bidding, NetSuite's stock price rose 18% to $ 108.3, while Oracle's stock price rose 1.9% to $ 41.7.