How a five-minute phone call with Oracle's Larry Ellison led to the creation of the first cloud software company and a $9.3 billion acquisition

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Not even Steve Jobs was certain about NetSuite at first. Now, 20 years later, it's a big part of Oracle's growth story.

We sat down with Evan Goldberg, founder and executive VP of NetSuite, to talk about life three years after the company was acquired by Oracle for $9.3 billion.

The year was 1999, and Evan Goldberg was working on his young software company, NetLedger, based on an idea from his friend and mentor Larry Ellison. But in the third quarter of that year, Oracle swooped in and bought NetSuite for $9.3 billion, as a move to underscore its commitment to outmaneuvering rivals like Microsoft, SAP, and Salesforce in the cloud software market. Salesforce had gone from one of Ellison's darlings to one of his biggest rivals.

The first minute, Ellison said that the future of business software had to be on the web because customers were sick of dealing with installing and managing software on their servers. Ellison was convinced it was going to be the primary way to deliver software for a"thousand years," says Goldberg,"and we built our company knowing nothing else."

He says that NetSuite's social impact program, whereby it gives free access to the software to non-profits and other community organizations, was inspired when he realized that even his local school district's parent-teacher association was tracking its financials by gathering at the home of the one parent who had Intuit QuickBooks installed on a PC — a situation similar to how small businesses had to do it, too, he says.

As time went by, NetSuite got larger, more experienced at adding features and more sophisticated. It added features for ecommerce, the advertising industry, education, and more. It launched a program called SuiteSuccess designed to get customers in specific markets up and running quickly. T. Rowe Price, the mutual fund and NetSuite investor, opposed the acquisition on the grounds that it represented a conflict of interest.Three years post-acquisition, though, things have settled in and NetSuite is chugging along as a mostly-independent subsidiary of Oracle. He says that the idea was to tap into Oracle's resources without compromising NetSuite's corporate culture.

 

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