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Subverted by Their Own Users. What Mistakes did the Fallen Giant Oracle Do?

Source:Iris Liang Time:2019-5-10 10:17:20

If you ask the giants in the world software market, then Microsoft and Oracle will definitely become the first names mentioned by everyone. It can be said that Oracle's position in the database market is comparable to Microsoft's monopoly on the operating system, but it is such a super The giants, but laid off 900 people in China, the stock was cleared by the stock god Buffett, how the world software giant with a market value of more than one trillion yuan fell to the altar? Compared to seemingly imaginary Internet companies, SEKO Machinery is a new manufacturing company that focuses on combining new technologies, new processes and equipment. Our rotary large-diameter steel tube black annealing equipment is the black annealing equipment with the largest diameter of steel pipe in the world. It has the advantages of energy saving, no need for preheating and low deformation.

First, the fall of Oracle
According to the "21st Century Business Herald" confirmed that on the morning of May 7, Oracle held a full-time meeting to officially determine the adjustment of the China R & D center. After the conference, Oracle China immediately began a one-on-one conversation with the employees involved. The Chinese company will cut 900 R&D personnel. After the layoffs, part of the business of the China R&D center will be transferred to other regions, and CDC closed the two recruitment channels of campus and society as early as 2018.

According to the news report, a retire employee revealed that “the contract was signed before May 22, which is N (working years) + 6 (monthly salary) compensation. One month later, June 7 is N. +1, then there will be only N." In any case, the 20-day job search time is still relatively tight. On May 7, a source told reporters that the entire Oracle China R&D Center had to be closed. This is the decision of Oracle's US headquarters. Oracle has about 1,600 R&D personnel in China, and has R&D centers in Shenzhen, Beijing, Shanghai, Suzhou, and Nanjing.

For most readers, Oracle seems to be a name that everyone is not familiar with, but the company founded in 1977 is the absolute veteran of the world software industry. How should Oracle's status as a river and lake be described? This is the founder of Oracle, Ellison, who was second only to Bill Gates in the United States in the 1990s. At his wedding, Apple's father, Jobs, was rumored to be his wedding photographer. In 1988, Oracle was already the fourth largest software company in the world. Since 2000, Oracle and IBM and Microsoft have established themselves in the data market. Until 2013, it surpassed IBM and became the world's second largest software giant after Microsoft.

However, this super giant, the database market monopolist of almost all Internet companies in the world, has fallen into a state of layoffs and survival. In fact, this is not the first large-scale layoff of Oracle in China. However, this round of large-scale layoffs is not limited to China's R&D centers.

As early as the beginning of 2017, Oracle China Beijing R&D Center had laid off a large number of people, and the ruling was transferred back to the United States. At that time, there were rumors that the entire Beijing R&D team would be abolished. According to data from Kaixinbao, Oracle (China) Software Systems Co., Ltd.'s social security information revealed that it has 3,745 formal employees who have paid social security in China, and the number of layoffs may exceed one quarter. In March of this year, there were large-scale layoffs in Oracle in the US media, including 50 in Mexico, 50 in New Hampshire, 100 in India, and at least 100 in Silicon Valley.

It can be said that anyone can see that Oracle is adopting a very obvious strategy of layoffs and simple administration, and thus trying to survive. But how did the giant Oracle fall to the altar?

Second, why did Oracle fall to the altar?
As we said above, Oracle's problem does not seem to be generated today, so to analyze Oracle's problems, we may have to fundamentally say, what is the business foundation of Oracle? In 1977, the world's computer and software giant IBM proposed the concept of "relational database". According to this concept, Ellison designed a new database system, which is the famous Oracle.

Since almost all Internet companies have huge demand for databases, under the third wave of technological revolutions that have emerged from computers and the Internet, Oracle can be said to be the biggest beneficiary of this era, especially in the last century. After the 1990s, Internet companies that have sprung up all over the world have made Oracle's profits full. Due to its absolute authority in the database field, as well as its strong sales ability and control over market pricing power, Oracle has captured more than half of the world database market share in 2010, becoming the absolute oligarch in the database field. Into the fighting gold, even the stock god Buffett has their eyes.

However, as the so-called feng shui turns, no company in the world can eat freshly all over the sky, and Oracle is also the same. Under the new era of Internet technology, everything is changing, and Oracle’s problem is exactly what it is. :

First, cloud computing strikes against the database. It must be said that in the pre-Internet era, any Internet company could not get rid of its dependence on the database, so the database became the printing machine for Oracle. Oracle lying on the printing machine can be said to be a big money. However, after entering the Internet 2.0 era, big data, cloud computing, artificial intelligence, etc. have fundamentally changed the market, especially cloud computing. In the cloud era, the demand for local deployment of Internet companies has been weakening, more and more. The enterprise uses the logic of SaaS (software as application), but Oracle is not fully aware of this. In 2008, Oracle's largest user in Asia, Alibaba, shouted the slogan of "IOE" (remove IBM's minicomputer, Oracle database, EMC storage device). At that time, Oracle did not realize what Alibaba was saying, but ten. In the year, Alibaba has completely moved its business to the cloud, and Oracle, the largest user of Oracle in the United States, has also announced the complete abandonment of the Oracle database. The paradox is that almost all of Oracle’s major customers became his grave-digger, Amazon. Microsoft, Google, IBM, and Alibaba have completely overturned Oracle with cloud computing. This kind of dimensionality reduction has made Oracle seem to have nowhere to hide.

Second, the Oracle giant turned to the dilemma. If IBM is an elephant that can dance, then Oracle is the giant who will not turn around, facing the cloud computing market in the world, although Oracle founder Ellison used to sneer at it, but when faced When the powerful competitors swept through, Oracle chose to give in. Oracle has begun its own difficult road to cloudization. Although Oracle has gradually transferred traditional database customers to its own cloud, Oracle's cloud is still too small and too small compared to the already mature public cloud market. In basic cloud infrastructure services, such as IaaS and PaaS, Oracle has a share of only 2%. Although we can see Oracle in the top ten cloud computing companies, Oracle is far from the top Amazon, Microsoft, and Google. Even the old user Alibaba can't match it. It can be said that the cloud transformation missed the best time of Oracle, just as a giant body is too big, the transition is too difficult.

Third, the faction of internal struggles is rolling. If path dependence makes Oracle miss the best time to develop cloud computing business, if the volume is too large to turn too difficult for itself, then Oracle's internal management issues seem to be more serious, according to public media reports, although Oracle's headquarters are California in the United States, but years of development has allowed Oracle to form two forces centered on Seattle and centered on Silicon Valley. The two forces are fighting for power and profit. Recently, the Seattle faction finally achieved in the company’s factional struggle. The victory led to the cleansing of the Silicon Valley faction. The global layoffs of Oracle were basically part of the Silicon Valley, while China was triggered by the wave of Oracle layoffs.

I missed the opportunity of development, and the internal business transformation was very difficult. In management, the internal faction was even more inclined. This kind of Oracle is also no wonder that World Life Warren Buffett cleared all the 2.1 billion US dollars of Oracle held in the fourth quarter of 2018. Stocks, which became a small number of companies that thoroughly cleaned up Buffett, can be seen by the stock gods about Oracle's worries. Where can such Oracle go? In front of him is the road to Nokia on the left, or to the right and continue to glory like IBM? We can only wait and see.

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Iris Liang
SEKO Machinery & Technology Co., Ltd
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