RSMUS.comI’ve been following a number of things over the past couple of months since Oracle announced the acquisition of NetSuite. As a marketing leader for RSM’s NetSuite practice, curiosity has gotten the better of me when trying to see if there’s been a slowing in NetSuite ERP purchases.
In addition to the acquisition by Oracle, we’re also in the heart of the presidential election cycle. History has traditionally shown a slowing in large purchases by companies for the 6 months leading up to the election all the way through the first year of the new presidential term. It doesn’t matter who the candidates have been, there has always been fears of policy changes that might affect the economy and small, medium and large businesses during the election cycle. Within my social circles, I’ve heard of a little more unrest during this election cycle with our candidates Donald Trump and Hillary Clinton not being the traditional politicians than we’ve seen in the past.
What does all of this mean for middle market companies who’ve been researching a new ERP system and NetSuite is on their shortlist?
- While the presidential election cycle has shown a history of slowing for businesses making large purchases, the subscription model of a NetSuite should get you over the hurdle compared to what we’ve seen in the past with large capital expenditures. You don’t need to shoulder all the burden of the new purchase on your books, rather you’d have a predictable operating expense that your business can plan for. Honestly, if you’re really worried about a doomsday scenario fallout from the election, you probably should be off on a beach somewhere trying to enjoy your last days rather than showing up at the office. Not to say that you shouldn’t be cautious about your new purchase, but realize there will be thousands of companies purchasing new ERP systems from now until the end of the year so you’re not going at it alone.
- The Oracle Acquisition is on track to close within the next few weeks. We haven’t heard a lot from the Oracle or NetSuite camp since the July 28th announcement. We have heard some rumblings that investor T. Rowe Price was going to vote against the deal, but speculations around this have been that they ultimately were trying to drive up the price tag of the transaction. According to Yahoo Finance today, Oracle received U.S. DOJ Clearance for the NetSuite takeover. I’m seeing no concerns at this point that the acquisition will fall apart, in fact, I think we’re accelerating towards the finish line and that should be exciting for everyone.
All of this said, now what?
In my previous article, “Why the Oracle NetSuite deal makes sense,” I outlined a few things that I still believe to be true today a couple of months removed from the announcement and a few weeks away from the official transaction.
- If you’re currently evaluating an ERP system, NetSuite should stay on your shortlist of Cloud ERP options to look at. They’re one of the top companies for a reason and they have over 10k customers to prove it.
- If you’re considering the evaluation of an ERP system and your risk scale can pass the “presidential election” fears, then certainly NetSuite should remain on your radar as you start your evaluation process.
- I’ve seen a number of NetSuite customers re-up since the announcement and lock in their rate for longer terms. The longest I’ve heard to this point has been a 5-year rate lock on pricing. You can probably bet they even got a decent discount for this as well. Once the acquisition officially goes down, your likelihood of securing discounts on your software is going to be tougher to negotiate.
Leading companies are the ones who take advantage of opportunities when others might perceive them as threats. During your ERP selection process, don’t get caught up in all the hearsay of negatives. You need to select the ERP system that fits best for your company and will help position you for growth. If that system is a NetSuite, Microsoft Dynamics GP, or Intaact product, RSM can help. If you’re looking for an objective advisor to help you in the ERP selection process. RSM’s Management Consulting group has helped hundreds of companies select the right ERP system that fits their industry and business goals.
Best of luck to you in your ERP selection journey. Remember, there’s no one solution out there that fits for everyone. Each business is unique and there is one solution that will meet your needs more than the others, so ensure you’ve done your research to make the best decision possible as this will be a foundational element to the growth and future of your company.
By: Brent Knowles, National Marketing Leader for Cloud ERP at RSM
Additional resources:
RSM’s Middle Market Index – Quarterly results of economic trends from 700 middle market leaders.
The Real Economy – Monthly publication to help the middle market anticipate and address the unique challenges and issues facing their businesses.
Technology Bulletin – A publication featuring technology news, insights and ideas to help middle market leaders make critical decisions for the stability and growth of their businesses.
