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NetSuite acquisition may fill out pieces of CRM puzzle for Oracle

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The CRM market has undergone another shift with Oracle's acquisition of NetSuite. Whither NetSuite's fate?

After a spate of acquisitions in the CRM market by Microsoft and Salesforce, Oracle followed suit in late July with the purchase of NetSuite, a CRM and ERP provider.

While Oracle has its own CRM and ERP offerings, the NetSuite acquisition may flesh out the Oracle portfolio by including e-commerce capabilities. SAP has Hybris and its Customer Experience Suite; and Salesforce recently purchased Demandware in a similar move to flesh out e-commerce capabilities to make it easier for sales and marketing to reach customers by understanding their customer service needs and by enabling customer service agents to upsell to customers. "The walls between sales, service and marketing have come down," said Keith Block, Salesforce's chief operating officer, about the Demandware acquisition.

Brent Leary, a principal at CRM Essentials, a CRM consultancy, said that the NetSuite acquisition helps Oracle flesh out its portfolio, particularly by having different components adjacent to CRM, including ERP and commerce functionality that works seamlessly with its platform.

"Oracle has looked at ways to compete more heavily and leverage their strengths in the CRM market," Leary said. "And their strengths are in having these other pieces to the puzzle and being able to pull them together. NetSuite adds an interesting component from an ERP perspective because, over the past couple of years, they have been driven into combining commerce into their CRM solution."

The ability to capitalize on the integration that Block noted is at the core of the NetSuite acquisition, Leary said. "Even though Oracle has a … Commerce Cloud, this combination is already integrated into what NetSuite is doing with CRM, commerce and ERP. That combination is becoming critically important. And I think NetSuite offered a quicker path than Oracle could do on its own."

At the same time, Oracle has, in some cases, made purchases but then let the technology that was so valuable languish (read: Sun Microsystems hardware).

There are some Oracle acquisitions "you never hear from again," Leary said. But others "become foundational components." There is question as to whether NetSuite will continue as a viable player in the Oracle portfolio or will be folded into Oracle's existing CRM and ERP offerings and be squelched. Only time will tell, Leary said. "I think NetSuite has an opportunity to be a little different because of its combination of commerce, CRM and ERP," he said. He added that NetSuite has also built a reputation in the market, which he believes bolsters Oracle's position in the CRM market. The NetSuite acquisition may give Oracle credibility and ability to compete.

"It's all about bringing NetSuite under the Oracle umbrella -- it's all how it's done," Leary said.

For more on the NetSuite acquisition, check out the podcast above.

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