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Clouds Mating!

NetSuite, the Larry Ellison SaaS company, is buying OpenAir, the 56-man shop that is supposed to be the leader

NetSuite, the Larry Ellison SaaS company, is buying OpenAir, the 56-man shop that is supposed to be the leader in on-demand professional services automation, for $26 million cash, net of the cash on the acquisition’s balance sheet.

NetSuite says it probably won’t be able recognize most of the deferred revenue on OpenAir’s balance sheet so the acquisition will add to its losses this year. It is now projecting non-GAAP losses of $2.5 million-$3.5 million (four-six cents) on revenues of $156 million-$159 million.

Having learned from Larry’s experience with PeopleSoft, NetSuite is promising to support OpenAir’s software for the next 10 years and not force OpenAir customer to migrate to NetSuite products.

Tearing a page out of Oracle’s book, the idea is to continue to peddle OpenAir kit standalone as well as integrate it with NetSuite via Web Services and add OpenAir features to NetSuite’s ERP, CRM and e-commerce widgetry over time.

NetSuite says the acquisition will accelerate development of NetSuite products designed for services companies, particularly professional services, business and IT consulting, legal, accounting and government contracting.

OpenAir, which claims 40,000 active users at 300 companies, is in

Boston so NetSuite is going to use it for an East Coast headquarters.

The deal is supposed to close this month. OpenAir investors Fidelity Capital, 3i, i-Hatch Ventures and Rex Capital put $16 million into the company.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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