Oracle already has an extensive cloud portfolio featuring SaaS, PaaS and IaaS offerings, including the option of having the hardware used for PaaS and IaaS located in the customer's own data centre at the same price.
But these products have generally appealed more to Oracle's traditional customers rather than startups and smaller businesses, which have been drawn to AWS, Azure, and SaaS offerings such as NetSuite.
NetSuite offers a complete cloud business system from ERP to ecommerce.
Oracle chief executive Larry Ellison was an early investor in NetSuite and held a large part of the company while it was a private entity. He still owns about 40% of the company and will thus gain from the acquisition.
NetSuite made a loss of US$125 million in 2015 and staff cuts may now follow as Oracle begins the process of trying to make it profitable.