Bold Microsoft-NetSuite Partnership Aims 1-2 Punch at Oracle

Enterprise ERP just got interesting

Perhaps nothing brings two companies closer than a common enemy. Case in point: the recent partnership between Microsoft and NetSuite. Microsoft, which offers its own Enterprise Resource Planning (ERP) solution — Microsoft Dynamics — is teaming with rival NetSuite to optimize NetSuite applications for Microsoft Azure and eventually for Office365 and even Microsoft Business Intelligence apps.

At face value, this is a good deal. But while both companies are touting the benefits of this partnership, make no bones about it. This is about helping Microsoft and NetSuite compete more aggressively against Oracle. Enterprise ERP just got more competitive. And Azure has picked up some serious swag.

From a NetSuite perspective, this deal is about enterprise credibility. Perception is reality. And while NetSuite has delivered enterprise-class ERP to many large corporations for several years, Oracle has successfully cast the company as not ready for enterprise prime time. Given Oracle’s success in the enterprise, that is a tough Goliath to take down. Teaming with Microsoft and making Azure the ‘cloud of choice’ levels that field and provides the validation many enterprises seek. Correcting the perception issue will allow corporations to compare functionality and usability to determine value rather than get hung up on enterprise labels. Plus the benefits of optimizing NetSuite with popular and even pervasive Microsoft technologies will benefit customers. This deal could mean advantage NetSuite.

For Microsoft, this brings a significant boost to Azure, which is competing with the likes of Amazon, IBM and Oracle for cloud leadership. Oracle has significant prowess in the enterprise despite a lackluster cloud strategy. Again, this partnership is as much about perception as it is about technology. For Microsoft, this is about adding yet another enterprise success to the Azure portfolio. It delivers Microsoft momentum against Amazon and IBM as well.

Bottom line, this is a solid deal for NetSuite that will benefit its customers. It gives Microsoft a significant boost in the enterprise cloud war. And it brings together two competitors to wind up a 1-2 punch against a shared rival. Your move Oracle.