Hacker News new | past | comments | ask | show | jobs | submit login
Oracle Buys NetSuite for $9.3B (bloomberg.com)
225 points by flinner on July 28, 2016 | hide | past | favorite | 134 comments



> The relationship between Oracle and NetSuite goes back decades. Zach Nelson, NetSuite’s CEO, previously ran Oracle’s marketing operations in the 1990s. Oracle co-founder Larry Ellison is NetSuite’s largest investor. As of March, Ellison and his family owned about 45.4 percent of NetSuite’s common stock, according to a company filing. Ellison has “control over approval of significant corporate transactions,’’ according to the filing.

Hmm, I wonder if the NetSuite board will approve this:)

Man, Microsoft has its OS and Office revenue to

Google and Facebook have their advertising revenue

Oracle has its licensing revenue

Amazon has its everything store revenue.

Apple has its iPhone revenue.

The big tech incumbents all figuratively print money each quarter.

If the long reported bubble burst ever gets around to happening, it's hard not to see them as the big winners. With piles of cash on hand and cash reserves growing can anyone make the case that they don't become the lender of last resort to cash strapped startups?

Side note, I'm surprised that Oracle is still running with Safra Catz and Mark Hurd as co-CEO's. I figured that that setup along with a very strong willed founder in Ellison, would cause some spectacular implosion at some point:)


>Side note, I'm surprised that Oracle is still running with Safra Catz and Mark Hurd as co-CEO's. I figured that that setup along with a very strong willed founder in Ellison, would cause some spectacular implosion at some point:)

It's because Safra Catz is a master operator while Hurd is a good IR and market-facing leader. Of course, Ellison is the visionary.

I read this as Oracle realizing that cloud is real and that they need to buy as many sources of cloud data silos as possible to build up their fortress of customer data.


Can you clarify what makes Safra Catz a master operator?



Can't Amazon, Google, and Facebook (less sure about the others) all essentially be characterized as Berkshire Hathaway?

I.e. Develop a business that generates large cash flows, then relentlessly plow that money into more profitable side ventures. Except in this case they didn't buy an insurance company and instead developed a product that generated those flows.


I think you're missing the way Warren Buffett and Berkshire invests.

He takes low risk, profitable companies with proven track records and strong management teams. Geico, Fruit of the Loom, building products and materials etc. Its a very different mindset then what Google is doing when it invests in self driving cars.

Every company thats profitable re-invests those profits in some way. Trying to lump the way Google or Amazon uses their excess cash is different then the way Facebook does (Facebook builds moats mostly) and definitely different then the way Berkshire does.


My main point on making the comparison was the scale at and frequently with which it's done rather than the investment strategy.

(1) Core technology & monetization -> (2) Cash Flow -> (3) M&A to Fuel (1) -> (4) Goto 2

Looks different at that size than it does for smaller entities. And if you have a revenue stream generic enough to feed on a variety of inputs, then you have huge flexibility in what you can purchase. And you can likely afford to pay more because you've got efficiencies of scale on your side (including access to hyper-scale amounts of data).


What you've described looks more like Amazon's strategy. It's probably more correct to say Google & Facebook are copying Amazon rather than BH.

The core of BH has ~20 employees. Warren Buffet always calls out his subsidiary CEOs for doing a great job, because BH couldn't exist in its current format if he had to manage day-to-day operations in any subsidiary.

The steps in Buffet's algorithm are the same, but the emphasis is different. Amazon builds moats and cashflow, while BH buys stable companies that already produce cashflow. BH doesn't need moats, only profit. Amazon, Google, FB need both moats and profit.

Buffet's algorithm looks more like:

  - (1) Identify stable, profitable businesses that WB understands
  - (2) if they're a good bargain, and it moves the needle on BH stock, buy
  - (3) goto (1)


They may use lot's of cash, they may be plowing, they may be relentless but their track record is decidedly mixed. Building franchises from smaller seedlings is hard and risky. Not comparable with Berkshire Hathaway that focuses on low risk investments. They are more acting like venture funds.

Amazon, Apple and Microsoft have managed to build some new profitable businesses over time with Amazon having done the greatest leap. The advertisement giants seem to struggle to gain traction - lots of projects but revenue streams less impressive.


As I understand it, Buffet has a negative interest rate loan from insurance premiums (essentially if you write 100M of insurance carefully on Jan 1st, and you only pay out 96M, then your customers have given you a yearly loan of 100M at an interest rate of -4%)

As such you can invest that money in assets able to throw off 96M in cash, like mattress sales or stock dividends, even if the return on purchase cost of the stocks is 2 or 3%. If anyone was to borrow 100M to invest they would not see a nice 6-7% return, but for most of past 40 years would see a negative return.

The cost of capital for Google will be different - most of their ad revenue is upfront but is short timescale (say a week) so it's not annual like BH. At best their cost of capital is probably zero. So their range of investments is smaller compared to BH.

And let's be fair - the brand is different. Google fiber is one thing. Google Coke? Google Mattresses?

Google is almost DNA bound to swing for the fences, and one suspects their will be no investor festivals for Serge and Larry in their 80's because the returns on that strategy don't often work.

But betting against Google is also a bad strategy :-)


I think most companies can be characterized this way: "Develop a business that generates large cash flows, then relentlessly plow that money into more profitable side ventures."


Generally "plow that money into less profitable side ventures" though is the way it ends up, despite the best intentions. Cash cows are the profitable bits, hard to beat Microsoft Office say with a new venture, you want something that is growing not saturated above short term profits.


Except that Google totally failed at this and facebook will probably fail at it too. And Amazon is just regular M&Aing with the random subsidiary spinoff happening.


YouTube, Android, Chrome, Maps, Apps... it's going terribly


Only YouTube was acquired (Android and Maps were too, but not really). YouTube does OK, the rest not so much. Just because they are popular doesn't mean they are profitable. And they are most definitely not independent.

On the other hand, Waze, Orkut, Nest. They spent billions on those and all they got was a lousy t-shirt.


Isn't Waze data incorporated into Google Maps? If that data significantly improves the product and helps them stay the market leader in maps, its value, while hard to quantify, has to be pretty huge.

The Nest acquisition seems to be part of a long term robotics strategy, so probably too early to call on that one.

Orkut I'll give you--Google seems to have basically thrown in the towel on social networking.


I think you guys are here just to argue and make excuses for google. I get it that you are fanboys, but please...

The GP said that they are like Berkshire Hathaway - basically a conglomerate of profitable companies. This simply isn't true. Acquiring a company to incorporate their assets into yours is just M&A, nothing like BH.

Nest is a miserable failure.


I'm definitely not a Google fanboy by any stretch. I agree they aren't really much like Berkshire Hathaway--was only taking issue with your assertion that all those acquisitions were worthless, which seems pretty unfounded to me.

I don't know a whole lot about the Nest story--seems the consensus now is that it didn't go well, but if Google retains engineers and IP that help them down the line with their robotics push, it's still probably worth something to them, though perhaps that will wind up being a lot less than they paid in 2014.


Orkut was a 20%-time project, not an acquisition.


Android makes them billions in advertising and is profitable.


No, Adwords makes them billions in advertising revenue.


And Android isn't helping ensure AdWords is fed with traffic despite what their competitors do? (E.g. a hypothetical MS or Apple monopolized mobile ecosystem who could choose to default to non-Google)


Android provides AdWords and Google Analytics with cross-device data, which is critical to advertisers who have lots of cross-device touchpoints before converting. Cookies break across devices, so having a device identifier and knowing pretty definitively who is logged-in lets them tie it back to the individual.

This is the difference between mobile/tablet performance looking unprofitable vs. profitable because the conversions are attributed to them.


I'm thinking of the non-acquisitions. Google Fiber, Verily, X.

X who knows but they're supposed to be moonshots, but Fiber and Verily can hardly be called failures.


The tech companies you've mentioned are not like Berkshire's model at all.

Berkshire is a conglomerate that looks for proven, established, cash-flow-positive businesses. See's Candy, for instance, requires no debt and is a sure bet every holiday season.

On the other hand, self-driving cars and WiFi balloons are extremely speculative and definitely aren't cash generating.


"lender" ?

I would assume they would use their cash stockpiles to acquire/acquihire any promising startups.


Mark Hurd is very talented and HP was stupid to oust him after the scandal surrounding him. Oracle saw a tremendous opportunity and hired him immediately. Larry Ellison's ability to see past public opinion and make tactical long term maneuvers is one of his few admirable qualities.

Without Googling it, Do you even remember what Mark Hurd's scandal was about? I don't...


Sexual harassment, same as almost every scandal involving a powerful man.


I don't think it was so much sexual harassment as it was that he embezzled corporate funds to pay the woman in question.

I'm sure the social justice warrior types see it another way though.


It doesn't matter what SJWs see, what matters is the potential for a company damaging lawsuit if they did nothing and left him in place. I'm sure media concerns factored in, but not as much as legal costs.


Sorry, off topic here.

But do you think oracle might be looking to jump into the Machine Learning/AI BandWagon


Did Larry Ellison just transfer billions of dollars from himself to himself in a taxable transaction? I'm surprised the deal was all cash.


Acquisitions are complicated in tax law. There was a good write-up about this in Forbes about a year ago that your question reminded me of:

http://www.forbes.com/sites/anthonynitti/2015/10/05/tax-geek...

I honestly don't know the answer to your question, though.


One could argue that Oracle's money is not technically his. This is how he gets a large share of Oracle's money into his own personal accounts without having to give other shareholders anything.


I'm calling it now. If this deal goes through Larry Ellison will buy a huge new boat.


Larry Ellison will buy a huge new boat regardless of this deal. It's just what he does.


Or purchase the other half of Malibu he doesn't own


At least it is not a software I use an like, that is devoured by Oracle this time.

(Of course Oracle makes great stuff. In a company as big as Oracle, there are always niches that create great things. But most offerings are dreadful. And most open source acquisitions did not fare especially well under Oracle)


VirtualBox has done quite well under Oracle.


MySQL has done well also.

Disclosure: I work on this team. Take a look at new features in 5.7 for example: http://www.thecompletelistoffeatures.com/


Really great to see native JSON support in MYSQL finally.

Also, "Random password generated by default on installation"

This has been a long time coming. I can't tell you how many mysql servers I've cracked into with "root"


This is fantastic. It'd be good see more products list new features (and changes) so nicely, especially those links to the manual. Thanks for the list.

Couldn't help posting it: https://news.ycombinator.com/item?id=12181637


Are MySQL and MariaDB going to diverge or stay parallel?


They started diverging at MySQL 5.5.


I wish the 3rd party tool makers would keep up though - the change in the authentication mechanism in the mysql.user table means that tools like Navicat tend to make a real mess of things.

We had to downgrade a project here from 5.7 back to 5.6 because of the issues that 3rd party tools were having. And we were using latest releases of the tools too!

Or perhaps 5.7 should have some sort of fallback or wrapper functions for tools that insist on doing a SET on the password column?


You can do something like this for doing a cross version approach:

  SELECT /*!50706 authentication_string as */ password FROM mysql.user;
I wrote about the rationale to some of the password changes here: http://www.tocker.ca/2014/09/05/proposed-changes-to-user-man...


That's an awesome list of features. It knocks a few entries out of my list of "Features I wish MySQL had". (Yes, I actually have such a list.)

I am curious as to how features get prioritized, though. I would think certain things would be higher priority, such as supporting a full outer join and ensuring that cascaded deletes/updates fire triggers.


Prioritization is based on a few things (customer demand, trends in the market in general). Besides prioritization, there is a resourcing component too (the server is split into several teams with specific expertise).

In general I would say that we like to understand the use case more than the feature :) If the workaround viability is low, the priority goes up.


Yeah... if the AWS team ported them all to Aurora that would be great.


.... Oracle bought a domain name just to list the new features in a minor version release?

I know MySQL doesn't use Semver at all, and I know the domain probably cost 3/5 of fuck all, but still...


I bought the domain name.

It's not a minor release.

MySQL predates semver. It is not alone here (see Mac OS X; PostgreSQL etc.). But you will be happy to hear that the next version will be called 8.0.


5.7... to 8..

Oh right, Oracle. Like how Java 1.5 became Java 5, eh.

Is >=8 going to be Semver?


6.0 was a canceled release.

7.x. is used by Cluster.

8.0 is the next number along, and makes it easy to follow as "it just drops the 5".


Dude, Oracle is bad but when they bought Sun, they were already on Java 6. The "1.4 to 5" move was all Sun, back in 2004 -- and to be honest, it wasn't even a bad move.


Looking at WHOIS, I think morgo bought the domain as an individual.


The upgrade experience could use some polish.

It seems like every time I fire vbox up locally it's prompting me to upgrade, which is a very clunky experience given the state of other software patching.


This happens to me too but I thought I was going crazy!

It's good to know I'm not alone in this. Also, since I don't remember the exact version I'm currently using it feels like I'm always using an old installation and that I ended up opening the wrong version... well that's some therapist money saved right there, thanks!


I'm pretty sure that the market for VB, like VMWare is being eaten very quickly by lxc-based alternatives like Docker. Probably a bad thing for VB in the medium to long term.


VirtualBox and VMWare do very different things than lxc/Docker.

VirtualBox and VMWare, for example, allow you to run Windows on a Mac, or FreeBSD on Linux, or Linux on Windows. lxc/Docker does none of this, it's simply a different technology with a different purpose.


Yes they are different technologies and have different strengths. Before Docker, a VM was just about the only way to decouple a software environment from specific hardware. Now some people are migrating from a VM to Docker if that's all they need.

I have no idea how big the impact of Docker is on the various VM vendors, but it isn't zero.


Only in the "tech fanboy who doesn't actually understand VMs vs Containers" space, which admittedly is quite a big space right now.

For OS X/Windows hosts the only thing keeping VirtualBox around is the price tag. No one is going to pay for the commercial version with the terrible performance it has.

If you're willing to part with $ you have much better options.

On OS X I think new players like Veertu will further displace VirtualBox even in the $0 category.


Veertu's main obstacle is cross-platform support. The point of providing virtualbox images is that they will work everywhere.

Look at the number of opensource projects distributing Hyper-V images, which has the exact same problem; and the OSX market is orders of magnitude smaller.

I like the Veertu concept and I think it has its advantages, but realistically, it has no chance to encroach on VB's market share.


This is why basically every virtualisation tool has "import from..." functionality


Veertu doesn't seem like a contender in the $0 category either, considering that the website has statements like "with free tier to run Linux VMs". Since no actual price is mentioned I'd assume that it's in the "if you have to ask..." category.


Huh? Veertu Premium is a $40 IAP.

https://itunes.apple.com/app/veertu/id1024069033


Good luck finding that on their website.


They link to their Mac App Store page, which shows the IAP pricing for the upgrade.


This news is interesting because with NetSuite's acquisition, it leaves no significant SMB SaaS player for SAP or MSFT to acquire immediately. All eyes are on their next announcement.

Anybody got a few hundred million sitting around and wants to build another SaaS ERP/SCM solution? :)


Microsoft bought Great Plains software several years ago which was SMB focused (renamed as part of Microsoft Dynamics); they say this is available in their cloud, I don't know if that's real or not, or how it stacks up competitively


We were asked by our board to move our accounting system to the cloud in 2015. We were using in-house Great Plains at that time. When I did my research MS's Dynamics "cloud" options were simply off-site hosting, you still ran their client instead of accessing it via a browser.

They had something in the works and this was about a year ago so I don't know if anything's changed since then. But I do remember the company that helped us manage our MS licensed software suggesting that their true cloud offering wouldn't be ready for quite a while.

In the end we went with NetSuite. Just like most software it's good at some things, not so much at others. But all in all I don't miss Great Plains that much, NetSuite does the job.


I think you are dating yourself - I seem to recall being part of a Microsoft Great Plains rollout in 2002, and a Salesforce rollout shortly after.

Wikipedia confirms - 2001 acquisition for 1B. Probably a profitable one!


Yup, same space as NetSuite. Dynamics gets into pretty much every SMB ERP evaluation in the market. (MSFT does have a massive partner network to serve that market.)


Except GP doesn't have a SaaS offering...it's just a hosted version by MS partners.


Microsoft Dynamics 365 is coming soon: https://www.microsoft.com/en-us/dynamics/dynamics-365?WT.mc_...

From their email newsletter 3 days ago:

Microsoft Dynamics 365 available later this year

Available this fall, Microsoft Dynamics 365 evolves our current CRM and ERP cloud solutions into one cloud service with new purpose-built apps to help manage specific business functions, including: Financials, Field Service, Sales, Operations, Marketing, Project Service Automation, and Customer Service. Dynamics 365 apps are designed so they can be easily and independently deployed. That means you can start small and pay only for what you need. Yet they work together seamlessly so, as your business demands, you can grow into additional capabilities with ease. For more information, visit the Official Microsoft Blog.


I'm dying to build one and have very good idea how it could differentiate itself to reach such levels...


Brilliant. What's stopping you? (Other than hundred million dollars and an enterprise sales team?)


haha, it's always hundred million. Core idea is to use AI to convert simple todo list in to process driven smart software automatically. ( I know execution counts much more, and If someone copy / already does that, please let me know )


IMO, that space (minus the AI component) is occupied by BPM and workflow automation platforms.

But what a business needs is an application and not a platform. So if you have a specific business problem and a use-case in mind and can prototype a solution, you can find a company to at least hear out your pitch.

Good luck with your idea!


SMB do not have well defined processes, if I can enter whatever that I am doing and if it can be converted to process which other can follow without come up with one themselves, effectively I'm transferring the intellectuals or experience down the line, which will enable me to grow organically instead of thinking out all of business growth and processes beforehand. Another advantage is the existing process can be improved organically. May be I should make a demo to explain it better....


A demo, or more quickly define a specific problem(s) and how your software solves for it.


Yeah, the SMB SaaS ERP area is pretty small currently. There are some of us (I work for Plex Systems[0], which caters more to manufacturing customers), but we don't see as many headlines as the big names.

[0]: http://www.plex.com/


What does "SMB SaaS player" mean?


SMB = Small-to-Medium Business (companies in the $10m - $250m revenue range) SaaS = Software-as-a-Service (like Salesforce.com)


NetSuite was a solution for people who outgrew stuff like QuickBooks and needed a grownup accounting solution, but didn't have the need or pockets for Oracle Financials.


nothing


I read on their website and on wikipedia, I still can't figure out what their software or even what "ERP" software in general even do. Maybe I'm stupid but it is not at all clear to me.


Intacct


SAP has S4/Hana: cloud or on-prem, your call.

I do not think it will acquire SaaS SMB in ERP/SCM.


Anaplan (for SAP to acquire)


SAP BusinessObjects Cloud has Modeling and Financial Planning capabilities: http://go.sap.com/canada/product/analytics/cloud-analytics.p...


Sage have X3. Maybe not on the scale you're looking for.


Hubspot maybe?


That makes sense actually. Marketing automation is very hot, the bigger players are not going to bother building that service - not because they can't, but because they can't cater to SMB with their cost models - and hubspot has a loyal customer base.


> Anybody got a few hundred million sitting around and wants to build another SaaS ERP/SCM solution?

How about, stop obsessing over fucking SaaS and make software people can use without worrying when your bullshit company will "pivot" from CRM to cute cat gifs like the majority of SaaS startups.


Not getting your vitriol, man.

NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions. Hence they were successful.

If your anger is toward poorly designed software, then yes, it doesn't matter if it's SaaS or on-premise.


To be fair, a lot of the attractiveness of SaaS is how poorly purchased / inhouse IT management has worked out for SMBs. Before, there was a floor to how few people you could manage a system with, which meant there was a floor to the size your company had to be or else... problems.

SaaS solves to that initial "we need process but can't afford the minimum buy in" gap. Admittedly at the cost of lining someone else's profit margin. But when your choices are between "nothing feasible" and "pay some overhead", it starts to look pretty attractive.


Absolutely. Bring in 100 sales reps and suddenly SaaS pricing starts looking horrendous. The large enterprises complain endlessly about their SFDC bills.


> NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions.

Another comment identified "SMB" as "companies in the $10m - $250m revenue range". Other definitions are based on staff count, with "<200", "<250", "<500" accepted 'standards' for Australia, European Union and USA respectively.

So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite.

> Hence they were successful

I would argue that a number of major SaaS products are only successful because they already had an entrenched user-base who basically had limited options besides moving to the SaaS solution.

My point was that there are already several SaaS CRM tools for those who don't want to control their own data.

SaaS is not about making software better, its about getting continual income from the users of the software, and increasing vendor lock-in.


> its about getting continual income from the users of the software, and increasing vendor lock-in

Unfortunately, lock-in will occur regardless of whether it's an on-prem software or SaaS. Companies don't go around changing their platforms every year or even every 3 years. So, one way or the other, the vendor will derive revenues from Annual Maintenance or Subscription. How's NetSuite unique in that regard?


>> How's NetSuite unique in that regard?

With your standard ERP software, after you buy the software, it's yours. They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime.

With a SaaS solution like NetSuite, they can charge you per user. You might pay $x/year per user, but if you add 100 users you're paying x*100 more per year.

You're also going to be paying the SaaS provider for every month/year you continue using the system. You might own your server and software but with a hosted system you're paying over, and over again. Which can be good if you're doing opex vs capex.

Companies generally switch ERP platforms every 10-12 years. Not only do new products come on the scene, but systems decay over time.


With your standard ERP software, after you buy the software, it's yours.

Any company that uses an ERP system is pretty much forced to upgrade regularly to keep in compliance. And every ERP system I've ever used or evaluated charged by the user.

When we used Great Plains, sure it was ours. But the price was based on the license count. Then after 1-3 years support would end and we'd have to upgrade. Oh, we could have decided not to upgrade. But then our owner's auditors would come along and give us bad grades for using an unsupported system. We'd be out of compliance with our lenders. And we just sell stuff, we don't have to worry about HIPAA or ISO standards or any other compliance issues that some companies deal with.

So we subscribed to the support plan, paid yearly and were entitled to all upgrades as they came out + some limited support from MS (which we never used).

Now we are on NetSuite and we pay annually, just like we did before. Except now upgrades are handled for us and I don't have to purchase a new server every 3-5 years.


>Add 100 employees and it doesn't cost you a dime.

That's not always the case. Especially in the space that NetSuite operates in. Microsoft charges per CAL. SAP, Oracle and IBM have their corresponding pricing structure.


> They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime.

You probably don't have an unlimited-seat license, because that's not how most are sold, and the market that buys ERPs (and enterprise software in general) is primarily motivated to pay for software for support, so "they can only charge you for support" isn't a meaningful limitation.


So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite.

It's not that they can't, it's that they don't want to. As vendors of a (FOSS) ERP/CRM platform, we offer both a SaaS and a self-hosted installation, and most of our SMB clients prefer the former.

The thing about the continual income is that the salary of a sysadmin (which most companies don't have) costs way more than many SaaS plans, so it doesn't make sense until you're very big.

As for the lock-in, many business SaaS platforms allow you to export your data. And in our case, you also get a FOSS-licensed copy of the software :)


On perhaps unrelated note, I think it'd be important for NetSuite to make sure their site's up the day Oracle buys them out, otherwise it 'd make both them and Oracle look bad. ( http://www.netsuite.com/portal/home.shtml, click on Free product tour - Oops )


Working for me at the moment.


Excellent. I was genuinely interested to learn about their product.


Larry Ellison owns 45.4% of Netsuite Stock.

This means he is aiming to make $3.75 Billion from this trade.

Holy crap.


Larry Ellison is a very interesting business leader. From reading accounts looks like he is a very dynamic business leader inside of Oracle. Certainly there are both positive and negative interactions. But he was also supportive of some of his top people leaving to start their own companies that have gone on to do really well. Often times he would invest into their businesses and personally capture upside.

On a long enough time line many of those businesses also went on to become direct competitors. So not surprised to see that he has a stake in the business, though have 45% is pretty amazing.


Can you name his competitors?

I can only recall Salesforce, although I don't know the extent to which their offerings overlap.


For the record, Salesforce was founded with Larry's money by Larry's employees -- pretty much like NetSuite, in fact.


SAP and Microsoft Dynamics are the biggest, IIRC.


I guess that's why the saying goes "you need money to make money" and similar ones like "money attracts money".

It seems that at some point after becoming very wealthy your money can produce more money than you can actually spend.

And yea, I agree that being able to make that amount of money in a "single operation" is staggering.

Just the interest/return on investment of that amount in one year would make anyone a millionaire.


But he still had to buy/acquire that 45% of stock. That proportion didn't just land in his pocket. Of course it's appreciated over time.


I would imagine we'll continue to see Oracle acquire mature software companies that are built upon their database. It makes a ton of sense for them - they instantly cut the primary cost of the business (Oracle licensing). Quite frankly the Oracle licensing alone will probably justify the purchase price.

As long as it isn't a startup where the braintrust instantly fleeing makes the product essentially worthless, it makes sound business sense.


I don't think this makes any difference at all (besides possibly tax reasons... I'm no expert). I wouldn't think there's much operational synergy between owning a customer.

But you seem to imply a financial reason. Say Netsuite's Oracle fee was $1M a year. If Oracle acquires them, Netsuite saves $1M a year sure, but Oracle also loses $1M year in external revenue. The result is the same.


For starters, they aren't paying a not-so-insignificant portion of that GP to a sales guy. There are absolutely tax benefits to it. And finally they don't have the cost of support, which can be quite large, of taking care of an external entity.


I've never understood why Oracle was so highly valued by Wall St. Databases have always had FLOSS alternatives. So how did an expensive proprietary solution (with lots of closed and open competitors) become so all-powerful and valuable?

On a related note: anybody on here want to work on some kind of innovative enterprise database startup? (I don't have any ideas, I just want to work on one because I see a lot of potential).


Oracle hasn't been a "database" company for a long, long time now. (You can license the RDBMS but that's not the real business.)

Yes, they have a very robust database. But what they've been selling to enterprises for at least 20 years is better thought of as ... schema.

When you buy Oracle Financials (or whatever modules / pieces / etc.) what you're buying is "how to set up and run your business." All of the non-physical parts of your business operations are now entities inside Oracle SW (and, as it happens, stored in the Oracle RDBMS, too, but that's practically speaking irrelevant).

Once you're "on" Oracle, or SAP, or whatever, every invoice you send out exists only because it's in that software. The software is your system of record, your single point of truth for your whole enterprise. You might think you are physically a human employee or a box of nuts but if you're not entered into Oracle with a row ID, you don't exist.

So, yeah, Oracle has an RDBMS. But what they really have is the "operating system" or the "schema" of a large enterprise which otherwise would have to rely upon a vast pyramid of specialist operational knowledge (bureaucrats / paper pushers / functionaries) in order to know how invoices got approved, sent, dunned, paid, reconciled, etc., or how orders got quoted, approved, picked, packed, shipped, etc.

(Not meant to sound condescending; I certainly wouldn't have known had I not spent some time seeing Oracle deployed in real life. It was certainly super-instructive for me to have spent a summer during college working for a midsize enterprise on Oracle, in a role kind of bridging ops and IT, and seeing what it really did. No SELECT statements involved.)


Fantastic explanation. Thanks.

What are some promising open source efforts out there to create such a universal schema?


I'm not sure if the open source model lends itself to such a thing.

(I'm thinking along the lines of "The Cathedral and the Bazaar")

https://en.wikipedia.org/wiki/The_Cathedral_and_the_Bazaar

http://www.catb.org/esr/writings/cathedral-bazaar/


Odoo, formerly known as OpenERP

https://en.wikipedia.org/wiki/Odoo


I also found webERP.org


Not sure we qualify as a startup anymore, but if you are into innovative enterprise databases, LogicBlox is hiring: http://www.logicblox.com/us/#career-anchor


> Databases have always had FLOSS alternatives.

Relational databases have had [technically] open-source alternatives from the beginning, you're right. But they were also always playing catch-up to commercial databases. Oracle supported SQL long before Ingres, making them the lead product at the very beginning, and their services and support (and superior marketing power) kept them at the forefront.

Corporate or military investment is usually what drives cutting edge technology, which is adopted by necessity.

> anybody on here want to work on some kind of innovative enterprise database startup? (I don't have any ideas, I just want to work on one because I see a lot of potential)

Find out what a huge corporate product is lacking, make that, and then get them to buy you.


(Why'd you delete the bit about "best HN pitch ever" -- that was hilarious).

On your point about Military / Govt applications. This Larry biography:

"The Difference Between God and Larry Ellison: *God Doesn't Think He's Larry Ellison"

This book is an insanely amazing read. Apparently, the CIA was one of their first clients, and Oracle was named after a failed CIA project (the book hints that Larry might actually be CIA)


I don't know what position he might have held, but i've known people who worked for the intelligence community. Saying someone "is CIA" is like saying someone "is Boeing". It's just another corporation (often informally called the corporation)


Salesmanship i guess.


At first I thought this purchase was a "holy batshit batman" event, but because of ""Oracle, which sells software to big corporations, has been trying to shift to cloud-based products, which made up only about 8 percent of total sales in its fiscal fourth-quarter."" then I guess it makes sense.


Am I the only one looking at the NetSuite patent list and trying not to foresee Oracle's next move.

Ref: http://stks.freshpatents.com/Netsuite-nm1.php


Seems like a perfect marriage. The oracle cloud transition is a work in progress from what I can tell so this solves part of that problem for them.


On a slight, but related side note, is there a way to stop Chrome from auto playing audio when you first open a web page?

I'm supposed to be working here - not surfing Hacker News!


Volume on mute is clutch


We're seeing brutal, brutal consolidation now. Better buckle up.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: