Ellison's Tech Babies To Battle It Out

03/28/2008 02:45 am ET | Updated May 25, 2011

Parents must love their children equally. Oracle boss Larry Ellison will realize this now that he is taking his second technology baby, NetSuite, public. The maker of on-demand software for businesses should get a warm reception -- and offer a nice bump to Mr. Ellison's net worth. NetSuite's value could be more than $1 billion. He will retain more than half. Oracle shareholders, though, might wonder why they aren't sharing in the celebration, too.

Oracle and NetSuite don't compete directly at the moment, but their roots are closely intertwined. NetSuite was formed by a former Oracle employee that Mr. Ellison bankrolled. Both make software for businesses, but Oracle's clients tend to be big, while NetSuite concentrates on companies with fewer than 1,000 employees -- which is a faster-growing market. Demand for this enterprise software among small and midsize businesses is expected to rise close to 9% annually until 2010, according to research outfit Gartner. The rate of growth for large companies is expected to be 5.7%. NetSuite's revenue is increasing more than 60% annually.

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