Yesterday, Oracle announced plans to acquire NetSuite for a whopping $9.3 billion. This is yet another move by technology providers looking to consolidate market share and add new capabilities.

We’ve seen a flurry of merger and acquisition activity in the customer experience ecosystem throughout 2016. These include: Salesforce acquiring Demandware; Microsoft acquiring LinkedInMarketo being acquired by Vista Equity PartnersinContact being acquired by NICE Systems; and this week’s merger of LogMeIn and the Citrix GoTo family of products. What makes this Oracle/Netsuite acquisition particularly interesting?

To answer that question, we must consider two key elements of the merger. First, both Oracle and NetSuite offer ERP and CRM capabilities. This acquisition will help Oracle expand its market share while also giving them the opportunity to sell their other products to NetSuite clients. For example, an existing NetSuite ERP user could use (or change to) Oracle CRM, if working with a single vendor for both needs were of importance to them.

Of course, in order to entice customers to use a single vendor for multiple needs in this way, Oracle must focus on building tight integrations between its current product portfolio and that of NetSuite.

The second reason this acquisition is interesting is that, if successfully integrated, the combined capabilities might allow end-users to address one of the top challenges in customer experience management: lack of a unified view of customer data.

As highlighted in Aberdeen’s CEM Executive’s Agenda 2016 study, companies face a number of difficulties when it comes to remedying this situation. Poor systems integration is a major culprit in this regard. When data flows between ERP and CRM systems, for example, are not seamless, employees will have different views of data at different times. This hinders organizations when they are looking to personalize customer conversations and ensure consistency of communications across multiple channels.

Ultimately, one factor that will determine the success of this acquisition will be Oracle’s ability to tightly integrate these combined ERP and CRM capabilities in a way that helps companies establish a single view of the customer with minimal IT assistance. If they can do that, the pay-off will come in the form of greater support for omni-channel customer interactions, which in turn help organizations reduce costs and maximize revenue.


Aberdeen’s Andrew Moravick also weighed in on this merger. He writes:

Oracle has been heavily expanding its customer-facing cloud capabilities, both with Marketing Cloud as well as with their sales CPQ and CRM solutions. NetSuite, for its part, is known primarily for its cloud-based business operations and enterprise resource planning (ERP) offerings. With these two players under one umbrella, the back office operational elements supported by NetSuite can be more effectively integrated with the front office capabilities enabled by Oracle.

Such integration can solve real problems. For example, Aberdeen Group research shows that companies combining customer-facing solutions, such as configure price quote (CPQ) technology, with ERP systems average a 12.1% reduction in overall operating costs. The Oracle-NetSuite acquisition directly supports this kind of operational efficiency by reducing the number of proposals going out to clients that are based on inaccurate estimates of cost or lack of insight into the availability of resources and inventory.

Image Source (Creative Commons): Oracle PR.

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