About Oracle Systems Corporation

Oracle predicts the future of computing is in the cloud. A leader in enterprise software, Oracle provides hardware and services to help companies improve their processes. Best known for its focus on databases (its RMDBS and MySQL are popular database management programs), Oracle also offers software for enterprise resource planning, data management, collaboration, application development, customer relationship management, and supply chain management. In recent years, the company has aggressively expanded through acquisitions. More than half its revenue comes from international customers.

Operations

Oracle's software businesses generate 80% of its sales.

The company traditionally sold on-premise software, applications that were loaded onto customers' computers at their offices. The company's on-premise software brands are Siebel, PeopleSoft and JD Edwards, and the company's Oracle E-Business Suite.

Oracle is moving its products to cloud computing environments, where customers can access programs from multiple locations and devices. The company's cloud applications are Oracle Human Capital Management (HCM) Cloud, Oracle Enterprise Resource Planning (ERP) Cloud, Oracle Customer Experience (CX) Cloud, Oracle Supply Chain Management (SCM) Cloud, Oracle Cloud Industry Solutions, and Oracle Data Cloud.

Oracle also offers services that help customers operate their businesses from a cloud environment with software-as-a-service, platform-as-a-service, and infrastructure-as-a-service. Those businesses account for about an eighth of Oracle's revenue.

The other 20% of Oracle's sales come from its hardware business, which includes computers and related software and services, and its consulting services business.

The company's manufacturing operations are devoted to its Oracle Engineered Systems and some of its enterprise and data center servers and storage products. It relies on third-party manufacturing partners to make other hardware.

Geographic Reach

Oracle's US customers generate just less than 50% of sales. The UK, Germany, and Japan account for about 5% of sales each.

Sales and Marketing

Oracle uses direct and indirect channels including independent distributors and value-added resellers to market and sell its products and services. The companies that comprise Oracle's indirect channel network are members of the Oracle Partner Network.

The company counts more than 400,000 customers, including each company on the Fortune 100. Its customers are in industries such as aerospace and defense, automotive, financial, technology, manufacturing, oil and gas, retail, telecommunications, and utilities. The company has scaled up its advertising spending in recent years.

Financial Performance

Oracle Corp.'s revenue rose about 2% to $37.7 billion in 2017 (ended May) from about $37 billion in 2016. The company had reported lower revenue for the preceding two years.

The company's overall software sales increased 2%, but the cloud "as-a-service" offerings drove the company's growth for the year, adding about $1.8 billion in revenue. The cloud software as a service business grew nearly 70% and the cloud platform and infrastructure businesses increased about 60%. The NetSuite acquisition also boosted cloud revenue. Sales were lower in new software licenses (which the company expected as customers move to cloud services), hardware, and services. Sales rose in the Americas and the Asia/Pacific region, but declined in the Europe, the Middle East, and Africa region.

Oracle's bottom line improved in 2017, rising 5% to $9.3 billion from $8.9 billion in 2016.

Net cash provided by operating activities increased to $14.1 billion for 2017 from $13.6 billion in 2016 because of higher net income in 2017.

Strategy

Oracle Corp.'s move to cloud computing began to pay off in its 2017 fiscal year ended in May. The company reported strong growth in its cloud platform and infrastructure businesses and it continues to attract customers to its cloud applications for enterprising resource, planning, human capital management, and financials.

Oracle scored a big win in 2017 when it signed an agreement with AT&T to move thousands of the communications company's large scale internal databases to Oracle's infrastructure and platform cloud services. AT&T will transfer thousands of existing Oracle databases containing petabytes of data plus associated applications workloads to Oracle Cloud. AT&T also agreed to use Oracle's Field Service Cloud to schedule and dispatch its more than 70,000 field technicians.

While Oracle's sales have grown in the Americas and the Asia/Pacific region, they have lagged in Europe. The company in 2017 began a hiring push for sales staff to generate more cloud sales in the Europe, Middle East, and Africa region.

Oracle quickly recognized the importance of cloud computing for its application software products. In that area, the company claims to be catching and passing rival Salesforce.com in sales of software-as-a-service applications. But Oracle was late in providing cloud infrastructure and platform services. In that race, it remains behind market leaders Amazon Web Services, Microsoft's Azure, Alphabet's Google, and IBM. An advantage that Oracle claims is that it uses its own server and storage hardware products and can ramp up production to build out data centers only when more capacity is needed.

Mergers and Acquisitions

Two notable deals made in calendar 2016 boosted Oracle's cloud offerings.

In July 2016 Oracle bought NetSuite for $9.3 billion. NetSuite ($741 million revenue and $124 million loss in 2015) provides cloud-based business management products similar to Oracle's. But the product lines are complementary in that NetSuite's products are built for the medium-sized business market while Oracle's are designed for enterprise businesses. The acquisition could help Oracle in competing with Salesforce.com, which also is an Oracle partner. Oracle chief Larry Ellison had a significant ownership share in NetSuite.

In November 2016 Oracle bought privately held Dyn, a company that helps increase internet performance and domain name system (DNS) provider. Dyn operates a global network that drives 40 billion traffic optimization decisions a day for some 3,500 customers, including Netflix, Twitter, Pfizer, and CNBC. Oracle said the addition of Dyn's DNS will extend and strengthen its cloud capabilities.

Other recent acquisitions were of MICROS Systems, Textura, Datalogix, and Maxymiser.

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Oracle Systems Corporation

500 Oracle Pkwy
Redwood City, CA 94065-1677
Phone: 1 (650) 506-7000
Fax: 1 (650) 506-7171

Stats

  • Employer Type: Public
  • Ceo: Safra A Catz
  • Executive Managing Director: Sarada Gogineni
  • Chb: Jeffrey O Henley
  • Employees: 56,134

Major Office Locations

  • Redwood City, CA

Other Locations

  • Belmont, CA
  • Daly City, CA
  • Encino, CA
  • Irvine, CA
  • Pleasanton, CA
  • San Mateo, CA
  • Colorado Springs, CO
  • Miami, FL
  • Orlando, FL
  • Alpharetta, GA
  • Atlanta, GA
  • Chicago, IL
  • Westchester, IL
  • Indianapolis, IN
  • Shawnee Mission, KS
  • Lynn, MA
  • Rochester Hills, MI
  • Troy, MI
  • Minneapolis, MN
  • Matthews, NC
  • Raleigh, NC
  • Nashua, NH
  • Trenton, NJ
  • New York, NY
  • Tarrytown, NY
  • Beachwood, OH
  • Beavercreek, OH
  • Blue Ash, OH
  • Twinsburg, OH
  • Conshohocken, PA
  • Coraopolis, PA
  • Knoxville, TN
  • Lewisville, TX
  • Sandy, UT
  • Reston, VA
  • Mumbai, India
  • New Delhi, India
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