At last, someone at NetSuite (or maybe Oracle) has figured out that Larry Ellison’s stake in NetSuite is the conflict-of-interests outsiders have been flagging for years.
According to recent NetSuite filings, Oracle CEO Ellison will put his NetSuite shares into a “lock box” to be managed by a third party.
The whole Oracle-NetLedger-NetSuite dance has been complex from the get-go.
Ellison funded the startup, then called NetLedger in 1998. Oracle at that time was primarily a database player and concentrated on large enterprise accounts. NetSuite’s fledgling online financial software consisted of applications for smaller companies.
Oracle itself then re-sold the resulting NetLedger product/service into SMB accounts. However, as Oracle launched a serious SMB attack on its own and spent billion-upon-billion (upon billion) to buy more applications, it was quickly apparent –at least to most of the sentient world–that Oracle’s own products were competing with NetLedger (by now NetSuite).
It was not unlike the “frenemy” situation between Oracle and Salesforce.com, the pioneering CRM SaaS player. Salesforce.com’s CEO Marc Benioff was a former Oracle exec and Larry protégé. Ditto NetSuite CEO Zach Nelson. Ditto, for that matter, NetSuite tech guru Evan Goldberg. Goldberg and Ellison co-founded Net Ledger in 1998.
Given Oracle’s apps hunger, there was lurking suspicion that Oracle may end up buying a Larry Ellison company. Yet another complication, especially as NetSuite keeps trying to go public. Several NetSuite partners (who also happen to be Oracle partners) have been wondering about this ownership situation for some time. Most shrugged it off as one of those Larry-being-Larry things.
Barbara Darrow, a Boston area freelancer, can be reached at firstname.lastname@example.org.