Mar 28, 2024 - Technology

Exclusive: Oracle gives NetSuite an AI upgrade

Illustration of a robot hand in a suit giving a thumbs up

Illustration: Sarah Grillo/Axios

Oracle announced Thursday that it's adding "more than 200" AI features to its NetSuite software, promising higher productivity in finance and accounting, supply chain and operations, sales and marketing, and customer service tasks.

Why it matters: Instead of charging customers extra for AI features, Oracle is treating these product improvements as table stakes — setting up a showdown with rivals who are charging a premium for similar services.

  • Oracle is also positioning itself as a practical AI provider, meeting customer demands for productivity boosts rather than delivering features with a wow factor.

"AI is going to be everywhere — it's not something that you're going to turn on or off," so there's no point making it harder or more expensive for customers to use it, Oracle NetSuite EVP Evan Goldberg tells Axios.

The big picture: Rapid adoption of AI over the past 18 months might be putting the U.S. economy on the cusp of a productivity boom.

How it works: One NetSuite Text Enhance feature with wide applications is "assisted authoring."

  • The tools will, for example, summarize financial data, prepare job descriptions and draft vendor engagement letters or lead-generation emails.
  • Oracle says it focused on how to make AI work for midsize companies. An "analytics warehouse" can now mash up and analyze data across many internal data systems, saving companies the hassle of streamlining them.
  • Oracle promises that "no customer data is shared with large language model providers or seen by other customers."

Context: NetSuite is one of the two software suites that Oracle offers to manage an organization's business.

  • Rivals such as Salesforce and Microsoft incorporated generative AI into their CRM software beginning in March 2023.
  • Other enterprise vendors such as Box have added generative AI tools to their offerings without boosting prices.

Friction point: SAP is pursuing a "consumption-based model" for generative AI features, charging up to a 30% premium, with prices varying according to how many features a user needs, as SAP spokesperson told Axios. SAP is one of Oracle's main competitors.

  • Oracle's Goldberg tells Axios it doesn't make sense to charge a premium for AI: "You can't imagine these business systems without AI in the future. It would be like a car without wheels."

The intrigue: Oracle has been trialing generative AI features in some parts of NetSuite since October 2023, fine-tuning them based on anonymized but "incredibly rich data" on how customers used them.

  • The feedback included data from an "undo" button, which acted as a proxy for user dissatisfaction with answers to AI prompts.

What they're saying: Goldberg says Oracle isn't planning to get into AI model development, but will pursue traditional AI methods like predictive analytics.

  • Goldberg is a fan of "very straightforward use of machine learning" and said his goal with the AI features has been to "make it obviously useful and correct enough of the time that you don't want to turn it off."

What's next: Goldberg says the next step is to find new ways to help leverage customer data.

  • One way is to nudge customers with messages like, "We noticed that users like you tend to like having this metric on your dashboard, maybe you'd like to have that metric," he says.
  • Goldberg thinks we'll also see different types of AI grafted together: for example, using retrieval-augmented generation to provide citations for a chatbot's answers or using LLMs to present predictive analytics in new ways.

The bottom line: "There's a very long road ahead. We're only one year into this revolution. It's as big as the internet revolution," he says.

Editor's note: This story has been updated with fuller information about SAP's pricing for AI features.

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