What Channel Gains From Oracle-NetSuite Deal?
The channel is very optimistic about the much talked about Oracle-NetSuite deal and is hoping for the best outcome from the USD9.3 billion acquisition. However, partners demand more clarity on the impact of the deal on the channel business and opportunities, as well as challenges coming up with synergies of two cloud veterans coming together.
“There is a lot of cloud buzz in the market and every vendor wants to capitalize on it. Oracle is also trying to capture the bigger market share and the company will certainly get millage with this acquisition. We are hopeful for positive impact of the deal on the channel business yet to evaluate the impact as the deal is in the process of completion”, said Manish Tandon, CEO of Questa Software Systems, an Oracle Cloud partner.
Tandon, however, demanded more clarity on Oracle’s cloud policy. “Oracle’s channel policy is in nascent phase and partners require more clarity of business”, he said.
Demonstrating a serious ramping up to win over the competitors, Oracle has announced the acquisition of NetSuite for USD9.3 billion. Oracle, which is very bullish over its cloud business, aims to surge in the cloud race with NetSuite deal. Oracle has been demonstrating healthy growth in its cloud business over recent months in comparison to competitors. NetSuite’s acquisition is a strategic move that aims to help Oracle compete against the likes of Salesforce.com Inc., Microsoft and SAP SE. Similarly, the collaboration with Oracle is expected to benefit NetSuite, to leverage the market opportunities with synergy generated by both cloud vendors.
However, analysts voice certain challenges for the channel business post the deal.The deal will open a window of opportunities for many SMB customers, who have been customers of Netsuite previously, who will require a different mindset for addressing their needs, and expectations of channel partner will be different from those who deal with large enterprise segments. New products and services will now be enabled because of this deal and how this will be positioned is something channel business will have to discover over a period of time.
Similarly, post this deal, there will be the challenge in articulating new and right value proposition, integrating the channels businesses into new ways of addressing the needs and aligning to needs of the new customer base which will come as a result of this synergy.
“For the channel business, this could be a tricky situation. While on one hand there is an opportunity through the synergies created through this deal, on the other hand, they have a challenge of addressing different market segments and different ways of handling the channel business”, said DD Mishra, Research Director at Gartner, adding “For Oracle, it is a no-brainer that they will have to deal with a new kind of complexity in terms of channel business which Oracle will need to address soon as the competition is going to be tough in the SaaS market.”
Both Oracle and NetSuite have not disclosed their channel play post completion of the deal yet. However, this strategic partnership will certainly bring new business prospects for channel parnters. Therefore, it will be interesting to see how Oracle integrates NetSuite’s channel business in a smarter way in the coming months.