group 2-oracle strategic plan

8/18/2019 Group 2-Oracle Strategic Plan

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ORACLE STRATEGIC PLAN 1

Oracle Strategic Plan

Edwin Nash

Hosianna Batu ara

Ale! Edeig a

"GT #$% &1 E ' (ALL $&1#

Te!as A)" *ni+ersit, Co--erce


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ORACLE STRATEGIC PLAN $

Table of Contents

Introduction ...................................................................................................................................../

Industr, Anal,sis ............................................................................................................................%

"acro0En+iron-ent Anal,sis .......................................................................................................1$

Organi ation2s "easure-ent and Control S,ste- .......................................................................13

Organi ation Anal,sis .................................................................................................................. $$

Organi ation0Le+el and Business *nit Strategies ....................................................................... /1

(unctional Strategies ...................................................................................................................../$

Organi ation2s I-4ro+e-ent Initiati+es .......................................................................................5$Conclusion and (uture o6 Organi ation ........................................................................................53

Re6erences .....................................................................................................................................#&

A44endices ....................................................................................................................................#1


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ORACLE STRATEGIC PLAN /

Introduction

The oracle cor4oration is an A-erican glo al co-4uter technolog, 6ir-. It2s located in

the silicon +alle, o6 Cali6ornia. Its -ain area o6 s4eciali ation is in de+elo4ing and -ar7eting its

co-4uter hardware s,ste-s and enter4rise so6tware 4roducts. It e+en has its own data ase

-anage-ent s,ste-s. A6ter "icroso6t8 Oracle eca-e the second largest so6tware -a7er ,

re+enue. The cor4oration also de+elo4s and uilds tools 6or data ase de+elo4-ent s,ste-s o6

-iddle tier so6tware8 enter4rise resource 4lanning8 custo-er relationshi4 and su44l, chain

-anage-ent so6tware.

Larr, Ellison co 6ounded the 6ir- in 19%% with o -iner and Ed Oates under the na-eo6 So6tware de+elo4-ent la oratories. Larr, too7 ins4iration 6ro- the 19%& 4a4er written ,

Edgar Codd on relational data ase -anage-ent s,ste-s. He heard a out the IB" s,ste-

data ase 6ro- an article in the IB" research :ournal 4ro+ided , Ed. Larr, wanted to -a7e

Oracles 4roducts co-4ati le with s,ste- R8 which he deri+ed 6ro- Codd2s theories8 ut it 6ailed

as IB" 7e4t their error codes 6or the ;B"S as a secret. Later on S;L changed its na-e to

relational so6tware in 19%9 and then in 19


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Organization’s Top Executives Analysis

1. Larr, Ellison= Holds the title o6 e!ecuti+e chair-an o6 the oard and chie6 technolog, o66icer.

He studied at the *ni+ersit, o6 Illinois at *r ana'Cha-4aign and the *ni+ersit, o6 Chicago

without graduating e6ore -o+ing to Cali6ornia in 1933. He wor7ed at A-4e! in the earl,

19%&s.$. Sa6ra Cat = She is chie6 e!ecuti+e o66icer o6 Oracle Cor4oration and a -e- er o6 the

co-4an,2s oard o6 directors. She 4re+iousl, ser+ed as 4resident o6 Oracle and has also

ser+ed as the co-4an,2s chie6 6inancial o66icer. Cat 6irst ser+ed as Oracle2s chie6 6inancial

o66icer 6ro- $& to $&&s degree 6ro- the ?harton School o6 the *ni+ersit, o6 Penns,l+ania in 19s

degree in Econo-ics 6ro- the *ni+ersit, o6 Cali6ornia8 Santa Bar ara8 and an "BA in

(inance 6ro- the *ni+ersit, o6 Cali6ornia.#. Hector Garcia= oard o6 director and graduated with a achelor>s degree in Electrical

Engineering 6ro- the "onterre, Institute o6 Technolog, and recei+ed oth a -aster>s

degree in Electrical Engineering and PH; 6ro- Stan6ord *ni+ersit,.


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Oracle is the leader in glo al so6tware industr, and it has -an, ig co-4etitors. Indeed

ti-es are changing 6or the 6ir- 6ro- the ti-e the, had ig ri+als li7e ig tech co-4anies. But in

recent ti-e2s new co-4etitors and uic7l, e+ol+ing technolog, -eans that Oracle has had to

scra- le 6ro- eco-ing o solete. Oracle is tr,ing to sta, i-4ortant in the glo al -ar7et which

has uic7l, -o+ed 6ro- downloading so6tware onto ig co-4uters to the cloud. Business

custo-ers are handing o+er their :o s to di66erent 6ir-s when it could e o4erated in house ,

connecting to the data , internet.

The 6ir- has een tr,ing to uild a re4utation 6or itsel6 in the cloud co-4uting world ,

hiring legions o6 engineers s4eciali ed in cloud. This is due to the decline in sale o6 newcusto-er so6tware licenses. Oracle has -an, co-4etitors li7e IB"8 SAP etc. since the 6ocus was

on cloud the, don2t 6ear -uch co-4etition 6ro- the-. Oracle now has co-4etition 6ro- sales

6orce and wor7da, which also deals with cloud ser+ices 6or HR and sales de4art-ents. But

Oracle has -an, new ser+ices li7e e0 co--erce so6tware8 HR a44lication and su44ort 6or o4en

source data technologies which its co-4etitors don2t ha+e or o66er. Also the 6ir- o66ers a storage

ser+ice 6or archi+ing data at an a66orda le 4rice. The 6ir- recorded re+enue o6 $$85/& -illion

during the 6inancial ,ear o6 $&1$8 an increase o6 $5.# o+er $&1&. The increase in the 6ir-2s

re+enue was due to the ac uisitions o6 H,4erion8 Agile So6tware and BEA S,ste-s. The

o4erating 4ro6it o6 the co-4an, was %8


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ORACLE STRATEGIC PLAN %

IB" So6tware Pri+ateOracle Cor4oration ORCL /9./5 &.&1 13%.%%B 1


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ORACLE STRATEGIC PLAN <

ac uired Sun "icros,ste-s to eco-e the su44lier o6 e+er,thing in the so6tware industr,. It

hel4ed the- to su44ress its co-4etitors. "oreo+er8 the co-4an,2s Porters # 6orces are as

6ollows=

T"reat of 'e( Entrants

It relates to the di66icult, le+el o6 entering the industr,. Su stantiall, i6 there are -ore

arriers to enter in the -ar7et the threat o6 new entrants would e reduced. The entr, arriers are

rand lo,alt,8 cost ad+antage8 switching cost8 go+ern-ent regulation le+el and econo-ies o6

scale. Threat o6 new entrants in the so6tware -ar7et is high es4eciall, in the *S. This is due to

the large su-s o6 6inancial resources needed 6or entering the -ar7et as it has een raised , theco-4etitors. This is a threat and ris7 6or Oracle as -an, new usinesses with newl, de+elo4ed

and inno+ati+e so6tware 4roducts are eing launched and the, can clai- the -ar7et share +er,

soon.

Bargaining !o(er of Buyers

Oracle targets ig 6ir-s8 so 4ricing is not the -ain 6actor 6or custo-ers when -a7ing a

4urchase so this -a7es the argaining 4ower o6 u,ers low. The u,ers do not ha+e -uch 4ower

in negotiating. The 4roducts and ser+ices eing o66ered , Oracle are 6or a niche -ar7et and the,

do not ha+e -an, esta lished co-4etitors. So the ga4 in the 4roduct 4ricing , the co-4etitors

is low and e+en ac uisitions reduce co-4etition and consolidates -ar7et share o6 so6tware 6ir-s

which in turn reduce the u,ing 4ower.

T"reats of ubstitute !roducts and ervices

?hen the econo-, is doing well the threat o6 su stitute 4roducts is low and switching

cost is high. But when the econo-, is ad it eco-es o44osite as custo-ers ha+e the urge to cut

costs and o4erate with e!isting s,ste-s. Custo-ers -a, not e attracted to high 4riced 4roducts


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i6 the long ter- ene6its are not in 6a+or o6 the custo-er2s o :ecti+e. The sco4e o6 su stitution in

+er, low when it co-es to 4ricing o6 4roducts8 as the co-4etitor2s 4rett, -uch 4rice the sa-e in

the -ar7et.

Bargaining !o(er of uppliers

The su44liers 6or oracle ha+e high 4ower as the technolog, that was a+aila le 6or the- to

-a7e 4roducts were 4rett, new and the de-and 6or resources 6or high. But now the su44l, has

e!ceeded de-and so the argaining 4ower o6 su44liers ha+e reduced. Also the 4ower o6 su44liers

ha+e reduced as the outsourcing costs in+ol+ed to de+elo4 4roducts has considera l, enhanced

the a ilities o6 so6tware 6ir-s to negotiate in ter-s o6 setting u4 their o4erations.)evel of *ivalry among Competitors

Oracles data ase is the nu- er 1 4roduct in its categor, o6 4roducts eing o66ered ut

industr, 4la,ers li7e IB" and "icroso6t are alwa,s de+elo4ing and inno+ating to steal that

4osition.SAP AG currentl, leads the -ar7et in the ERP suite o6 4roducts and holds an ad+antage

in the do-ain due to its earl, entr,. SAP AG will continue to 4ose a threat to Oracle2s re+enues

in the a44lication -ar7et. (ir-s li7e HP and IB" are well esta lished in the hardware sector

and ha+e strong hold and will alwa,s e a hindrance in the growth o6 Oracle. Oracles

co-4etitors are all well esta lished 6ir-s so the, ha+e the a ilit, to in+est a signi6icant a-ount

in sales and -ar7eting.

!otential !rofitability of t"e Industry

"icroso6t8 Oracle and SAP re4resent o+er 3/ o6 all re+enues. (ast0growing ?or7da, is

still tin, in co-4arison to Oracle or SAP. In0line growth o6 / at Oracle 4roduces a 6ir- that


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co-4etencies that lead to higher le+els o6 custo-er satis6action and Process integration is

considered to hold the 7e, to 6uture co-4etiti+e success.

Tec"nical expertise . It is the s7ill or e!4erience the 6ir- has got in the technolog, 6ield.

Oracle has state o6 the art technical e!4ertise in hardware and so6tware. The 4ace o6 de+elo4-ent

with hardware and so6tware is increasing o+er ti-e. The 6ir- has a wide range o6 hardware

de+elo4-ent ser+ices and it is ased on their technical s7ill sets. E+en their e!4ertise in so6tware

de+elo4-ent is the est 6ro- -a7ing so6tware 4ro:ects to high le+el 4rogra--ing 6or o4erating

s,ste-s.

The, also o66er solutions to an, so6tware re uire-ents or issues8 the, set u4 4ro:ectrelated on site de+elo4-ent tea-s at 6ir-s8 and the, also handle 4ro:ect -anage-ent and

i-4le-ent the- in technical o66ices around the world. Oracle also o66ers su44ort 6or entire

4ro:ects or indi+idual de+elo4-ent 4ac7ages.

Mar#eting . "ar7eting is critical to the success o6 an, so6tware 4roduct8 ecause there

are so -an, 6ir-s co-4eting in the so6tware -ar7et and ecause 4c and la4to4s are still new to a

lot o6 4eo4le and usiness 4rocesses. In 6act8 in -an, co-4anies that 4roduce so6tware8 the

-ar7eting de4art-ent calls the shots. Oracles -ar7eting techni ues are +er, 6resh and

inno+ati+e.

The world is going digital since it2s the age o6 social -edia and -an, online a44s that

a+aila le can hel4 gain -ar7et share. Oracle rea7s down the organi ational silos and organi es

around the consu-ers. It then uses data content and -ar7eting technologies to ena le a consu-er

6ocused real ti-e a44roach. Since the 6ir- is in+esting in new technologies and using the right

-ar7eting strategies the, ha+e een earning high ROI so as to uild a digital 6uture in -ar7eting.

?hen it introduced Oracle -ar7eting cloud it has seen an increasing nu- er o6 its custo-ers


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ORACLE STRATEGIC PLAN 1$

deli+ering a le+el o6 real ti-e ser+ice. This is due to the content -anage-ent8 data collection and

consu-er co--unication which -a7es it the 4lat6or- 6or the est -ar7eting technolog, stac7s

in the glo al -ar7et. Oracle "ar7eting Cloud -a7es it 4ossi le 6or 6ir-s to understand the od,

language o6 their consu-ers digitall, and co--unicate through right channel with the right

-essage in real ti-e. It is oracles technolog, that -a7es it realit, 6or its custo-ers.

Macro,Environment Analysis

*is# +actors

Oracle o4erates in a 6ast changing econo-ic and technological en+iron-ent hence it is

6aced , se+eral ris7s that are in6luenced , -an, 6actors which are o66 the co-4an,2s control.Econo-ic8 4olitical and -ar7et situations can e related to this there6ore it could a66ect the

co-4an,2s usiness8 results o6 o4erations and 6inancial condition8 including its re+enue growth

and 4ro6ita ilit,8 which in turn could un6a+ora l, a66ect its stoc7 4rice.

!olitical$)egal +orces

Politics can increase the co-4an,2s ris7 6actors8 ecause the go+ern-ent can -a7e

une!4ected changes to usiness rules8 which could negati+el, a66ect Oracle2s usiness acti+ities.

Political stri6e in areas li7e "iddle East8 which ha+e led to terrorist attac7s across the glo e and

the li7elihood 6or 6uture aggressions in +arious 4arts o6 the world8 and the 4otential 6or other

hostilities in +arious 4arts o6 the world8 could a66ect the co-4an,2s 4ro6ita ilit,. In (e ruar,

$&1#8 Oracle A-erica Inc 6iled a law suit against the state o6 Oregon8 6or a 6ailed health 4lan

e!change we site that the co-4an, was designing. The co-4an, clai-ed that # 6or-er sta66 and

ca-4aign ad+isers to the state2s 6or-er go+ernor8 wor7ed ehind the scene to 7ill the 4ro:ect.

This could a66ect the co-4an,2s PR8 sales and 6uture usinesses.


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ORACLE STRATEGIC PLAN 1/

Economic +orces

The ongoing econo-ic crisis in Euro4e8 the continued slow 4ace o6 econo-ic reco+er, in

the *.S.8 and a slowing econo-ic condition in 4arts o6 Asia and South A-erica could negati+el,

a66ect Oracle2s usiness8 o4erating results or 6inancial condition. This in turn8 could un6a+ora l,

a66ect the co-4an,2s stoc7 4rice. The 6ederal go+ern-ents o6 the *nited States that are one o6

the ig custo-ers o6 the co-4an, ha+e signi6icantl, reduced its s4ending in order to -eet u4

with the JSe uestration Polic,K. A general wea7ening and declining o6 cor4orate con6idence in8

the glo al econo-, or the restriction in cor4orate or go+ern-ent s4ending ha+e caused the

co-4an,2s current or 4otential custo-ers to reduce their in6or-ation technolog, FIT udgets orotherwise source 6or chea4er o4tions 6or its so6tware8 hardware s,ste-s or ser+ices 4urchases.

These ha+e led to dela,8 decrease or cancelation o6 4urchases8 or ha+e allowed custo-ers not to

4a, the co-4an,8 or in so-e cases dela, 4a,ing 6or 4re+iousl, 4urchased 4roducts and ser+ices.

According to a re4ort , ?all Street @ournal8 Oracle re4orted a larger than e!4ected dro4 in

sales. The co-4an, la-ed the dro4 in sales on the strong *.S dollar which recentl, a44reciated

against -a:or world currencies. This e66ecti+el, discounted the sales the co-4an, -ade a road.

Ac uisitions also 4resent -an, ris7 to the success o6 the co-4an,8 and it -a, not reali e its

6inancial and strategic goals that it had earlier conte-4lated. In recent ,ears8 Oracle has in+ested

illions o6 dollars to ac uire a nu- er o6 co-4anies8 4roducts8 ser+ices and technologies8 and

this has eco-e an i-4ortant ele-ent o6 Oracle2s o+erall cor4orate strateg,. This 4rogra- is

e!4ected to continue8 ut the ris7 in+ol+ed in this is that the co-4an,8 4roduct8 ser+ice or

technolog, -a, not succeed due to nu-erous reasons detailed elow

ocial +orces


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There is no dou t that the societ, will continue to change8 hence causing change in taste8

u,ing ha its8 li6est,le8 education le+el8 e-4hasis on sa6et,8 religion and elie6s8 health

consciousness8 attitude toward custo-er ser+ice and 4roduct ualit,8 attitude towards 4roduct

and ser+ices Flocal or i-4orted etc. The so6tware 4roduction industr, ha+e een a66ected ,

so-e o6 the changes -entioned a o+e8 there6ore it is necessar, to 4a, attention to this changes in

order to re-ain co-4etiti+e in an industr, 7nown to e 6ast 4aced. The use o6 social -edia

strateg, has een o6 great i-4ortance to Oracle8 ecause the co-4an, has using it to engage

e!isting and 4ros4ecti+e custo-ers8 rein6orce rand -essaging8 in6luence custo-er o4inions8

4ro+ide targeted o66ers8 and ser+ice custo-er -ore e66icientl,. The success o6 this strateg, couldlead to increased awareness8 sales i-4ro+e-ent8 etter custo-er ser+ice8 and increased

e66icienc,. Howe+er8 6ailure to i-4le-ent this strateg, could lead to the co-4an, losing its

-ar7et share and a ilit, to co-4ete.

Tec"nological +orces

Oracle2s success also de4ends on its a ilit, to de+elo4 new 4roducts and ser+ices8 while

integrating ac uired 4roducts and ser+ices and enhancing its e!isting 4roducts and ser+ices. The

co-4an, co-4etes in an industr, 7nown 6or its ra4id technological de+elo4-ents and changing

standards in the co-4uter hardware8 so6tware de+elo4-ent8 and co--unications in6rastructure

cou4led with changing and increasingl, so4histicated custo-er needs8 and 6re uent new 4roduct

introductions and enhance-ents characteri ed , the enter4rise so6tware and hardware s,ste-s.

(ailure to de+elo4 new or ade uatel, di66erentiated 4roducts and ser+ices8 or enhancing

and i-4ro+ing its 4roducts and su44ort ser+ices in a ti-el, -anner or to 4osition andDor 4rice

its 4roducts and ser+ices to -eet de-and8 -a, cause custo-ers not to u, new so6tware

licenses8 cloud so6tware su scri4tions or hardware s,ste-s 4roducts or 4urchase or renew


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ORACLE STRATEGIC PLAN 1#

so6tware license u4dates and 4roduct su44ort or hardware s,ste-s su44ort contracts. The

renewals o6 these su44ort contracts are i-4ortant to the co-4an,2s growth. In order to -eet u4

with the challenges that this -ight ring the usiness8 Oracle has continued to de+elo4 new

4roducts that will allow it co-4ete e66ecti+el, 6or usiness o44ortunities in e-erging areas. The

co-4an, has continued to in+igorate and release new o66erings o6 so6tware and hardware

4roducts and ser+ices8 an continue to ho4e that these new 4roducts will e acce4ted.

Opportunities

There are series o6 o44ortunities o4en to oracle8 which could lead to the actuali ation o6

its long0ter- growth. The, include• Increasing the co-4an,2s 4resence in econo-ies such as China and India8 where the

4o4ulation is great8 and is generall, considered a 4ri-e destination 6or -ost

-ultinational. This allows it the co-4an, to e!4and its usiness and di+ersi6, its

4ort6olio o6 4roducts and ser+ices.• The a ilit, to generate additional re+enue 6or the co-4an,8 through an increased le+el o6

in+est-ent in the de+elo4-ent o6 +irtuali ation so6tware 4rogra-s.• It also has the o44ortunit, to achie+e long0ter- growth , 4ro+iding so4histicated data

storage ser+ices8 while intensi6,ing the de-and 6or the 4roduct through its +arious

4ro-otional tools.• It can also launch new research and de+elo4-ent initiati+es8 which will e ai-ed at

de+elo4ing inno+ati+e usiness a44lications 6or +arious t,4es o6 de+ices8 there ,

increasing the le+el o6 re+enue strea- o6 the co-4an,.• (rag-ented "ar7ets ' This 4ro+ides -an, o44ortunities 6or Oracle to e!4and and

increase its -ar7et share. The 6rag-ented -ar7ets ha+e -an, s-all co-4anies that

cannot co-4ete8 on the asis that the, lac7 the cost ad+antages o6 larger co-4anies.

T"reats


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A set o6 4articular threats ha+e to e addressed , Oracle Cor4oration e66ecti+el, so as to

actuali e its sustaina le 4rogression in the 6uture. The co-4an,2s -a:or threat is the rise o6 new

co-4etitors 6ro- China8 India or an, other de+elo4ing giants 6ro- the East. This is ecause

Oracle would 6ind it challenging to contend with such a ri+al on 4rices 4utting into consideration

the co-4etitors2 access to signi6icantl, chea4er resources8 which includes hu-an resources in

China and India. Others include=

• A +olatile currenc, and a ad econo-, could -a7e Oracle2s in+est-ents di66icult8 since

costs and re+enues could change ra4idl,. It could reduce the nu- er o6 4otential

custo-ers.• Highl, Co-4etiti+e International -ar7ets could also a66ect Oracle2s usiness. This is

ecause the -ar7et usuall, has nu-erous co-4etitors that are di66icult to co- at against.

These co-4anies could ha+e -an, co-4etencies that could gi+e the- an ad+antage o+er

Oracle. In order to grow the -ar7et in these -ar7ets the co-4an, has to incur a lot o6

cost.• The 4ossi ilit, that co-4etitors could lure custo-ers awa, 6ro- Oracle with su4erior

4roducts and ser+ices8 could a66ect the co-4an,2s 4ro6it.• Changes to go+ern-ent rules and regulations can negati+el, a66ect Oracle.• Consu-ers taste could change at an, ti-e8 hence Oracle has to ha+e a etter

understanding o6 these trends8 or it will lose its -ar7et share.• The a+aila ilit, o6 su stitute 4roducts could hurt Oracle2s a ilit, to raise 4rices8 ecause

custo-ers can easil, switch to another 4roduct or ser+ice

Organization’s Measurement and Control ystem

Oracle Cor4oration 4ro+ides 4roducts and ser+ices that address all 6acets o6 cor4orate

in6or-ation technolog, FIT en+iron-ents8 6ro- a44lications8 to 4lat6or-s and in6rastructure.

This ser+ices are 4ro+ided +ia cloud co-4uting or on 4re-ise de4lo,-ent -odels. It also o66ers

6or sale data ase and -iddleware so6tware8 a44lication so6tware8 cloud in6rastructure so6tware8


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ORACLE STRATEGIC PLAN 1%

hardware FOracle Engineered S,ste-s8 ser+ers8 storage8 networ7ing and industr, s4eci6ic

4roducts 8 and related su44ort and ser+ices. It has o+er 5&&8&&& worldwide custo-ers8 and o66ers

to the- a choice o6 de4lo,-ent -odels that will est suit their needs.

Oracle is one o6 the world>s largest su44lier o6 enter4rise so6tware and a 4rinci4al

4ro+ider o6 co-4uter hardware 4roducts and ser+ices. The co-4an,>s o4erations are di+ided into

three seg-ents na-el, So6tware8 Hardware S,ste-s and Ser+ices. The So6tware seg-ent

contri utes %/ o6 the co-4an,2s total sales8 while the other two contri utes 1# FHardware

s,ste- and 1$ FSer+ices res4ecti+el,. The co-4an, as at No+e- er $58 $&1# had a -ar7et

ca4itali ation o6 13< illion. The co-4an, has recorded sales o+er /% illion8 with #/ o6sales originating 6ro- A-ericas8 /& 6ro- Euro4e8 "iddle East and A6rica8 while the Asia0

Paci6ic region contri utes 1% sales.

*evenues -.ear Ended May /%st 01%23

*sing $&1# uarterl, re4orts8 Oracle 4resented an increase in total re+enue8 as re+enue

6ro- sales increased 6ro- $3.9## illion in $&15 to $%.#$& illion in $&1# FA44endi! A . This

re4resented a $ increase. The ul7 o6 these sales were deri+ed 6ro- its so6tware and cloud

sales8 which re4resented a %3 o6 the total re+enue in $&1#8 co-4ared to %# in $&15. This

increase in the so6tware and cloud sales re4resents a 5 increase in re+enue. The co-4an,2s

Hardware S,ste- re+enue also contri uted 15 to the total re+enue in $&1#8 co-4ared to 1#

in $&15. This shows a decrease in sales re+enue , 1 . @ust li7e the hardware s,ste-8 the ser+ice

-ar7et also e!4erienced a dro4 in re+enue8 as re+enue accruing 6ro- this sector 6ell , 1 8 and

this re4resents 1& o6 the co-4an,2s re+enue.


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ORACLE STRATEGIC PLAN 1<

Figure 2. Oracle re+enue growth. This 6igure illustrates Oracle uarterl,re+enue growth during $ $&1/0/ $&1#

Operating Expenses -.ear Ended May /% st 01%23

Oracle2s o4erating e!4enses increased 6ro- 1%.1 illion in $&158 to 1%.3/1 illion in

$&1#. This re4resents a / increase in o4erating e!4enses8 with the JCloud so6tware0as0a0

ser+iceK and J4lat6or-s0as0a0ser+iceK contri uting the highest 4ortion o6 the increase with a 3/

increase Cloud In6rastructure0as0a0Ser+ice contri uting a 15 increase restructuring with a

13 increase8 while Research and de+elo4-ent contri uted an < increase. "ost o4erating

heads had a reduction8 with the hardware s,ste-s 4roducts e!4eriencing a decrease o6 5 8

Ac uisition related and other e!4enses e!4erienced a 5# decrease.

Figure 3. Oracle total operating e penses. This 6igure illustrates Oracleuarterl, o4erating e!4enses during $ $&1/0/ $&1#.


19/60


'et Income -.ear Ended May /% st 01%23

Oracle2s net inco-e dro44ed , $ with re+enues dro44ing 6ro- 1&.9## illion in $&158

to 9.9/< illion in $&1#. "anage-ent la-ed the international e!change rate 6or the dro48 as

in+estors are also not ha44, with the situation8 with stoc7 also down , down % in a6ter0hours

trading. Anal,st 4redicted that will still e a66ected , 6oreign e!change rate8 :ust li7e -ost large

international cor4orations ha+e een o66 late.

In its $&1# 5 results8 Oracle re4orted a # dro4 in re+enues o6 1&.% illion8 instead o6

/ rise as in constant currenc,. The So6tware and Cloud re+enues were down , 3 o6


20/60

ORACLE STRATEGIC PLAN $&

• Total Hardware S,ste- Re+enues were #.$ illion8 down / 8 ut u4 $ in constant

currenc,.

• O4erating Inco-e was 1/.9 illion8 and the O4erating "argin was /3 .

• Non0GAAP O4erating Inco-e was 1%.5 illion8 and non0GAAP O4erating "argin was

5# . Net Inco-e was 9.9 illion8 while non0GAAP Net Inco-e was 1$.# illion.

Earnings Per Share was $.$18 down % 8 ut unchanged in constant currenc,. Non0

GAAP Earnings Per Share was $.%% down / 8 ut u4 $ in constant currenc,.

The co-4an, had astounding sales o6 5$3 -illion o6 new Saas and PaaS annuall,

4eriodic cloud su scri4tion 4roceeds in 5. And it is antici4ated that the s4eedil, increasing

cloud sales will ra4idl, translate into signi6icantl, -ore re+enue and 4ro6its. The SaaS and PaaS

4roceeds grew at a /5 constant currenc, rate in the :ust concluded 58 ut it is antici4ated that

re+enue growth rate will rise to 3& i6 currenc, re-ains constant in this new 6iscal ,ear.

Figure !. Oracle net inco-e. This 6igure illustrates Oracle2s net inco-e 6ro-$&$&1#.

Earnings !er "are

Oracle re4orted unsatis6actor, earnings to close out its 6iscal ,ear. "anage-ent clai-ed

that the unsatis6actor, earnings were due to costs o6 a strengthening e!change rate 6or the *.S.

dollar. It re4orted earnings o6 &.%


21/60

ORACLE STRATEGIC PLAN $1

Earnings 4er share were down 15 and # in constant currenc,. In order to re-ain co-4etiti+e

in an e+er changing -ar7et8 the co-4an, is graduall, shi6ting its 4ositioning in the -ar7et to

4ro-ote the catch u4 ga-e its 4la,ing in the cloud section o6 the -ar7et.

Figure ". Oracle2s trend earnings 4er share. This 6igure illustrates Oracle2strend earning 4er share 6ro- $&1/0$&1#.

Compare (it" Competitors and tandards

Oracle Cor4. F ORCL is an enter4rise so6tware co-4an, that de+elo4s8 -anu6actures8

-ar7ets8 distri utes8 and ser+ices data ase8 -iddleware so6tware8 and a44lications so6tware. It

4ro+ides a co-4lete8 o4en8 and integrated usiness so6tware8 ser+ices8 and hardware s,ste-s to

custo-ers that include all si es and industries.

http://marketrealist.com/quote-page/orcl/http://marketrealist.com/quote-page/orcl/


22/60

ORACLE STRATEGIC PLAN $$

Figure #. Oracle2s re+enue , o4erating seg-ents.This 6igure illustrates Oracle2s re+enue , o4erating

state-ents in 1 $&1#.

The enter4rise so6tware -ar7et grew to 5&%./ illion in $&1/8 an increase o6 5.< ,ear0

o+er0,ear FA44endi! B . "icroso6t F "S(T leads the -ar7et with a 13 -ar7et share F Sinha8 P.8

et all.8 $&1# . It2s 6ollowed , Oracle. IB" F IB" 8 SAP AG FSAP 8 and Ado e FS "C are

other leading 4la,ers that -ade it to the to4 6i+e ran7ings. "icroso6t continues to lead the

industr, in ter-s o6 re+enue8 with a total o6 9/.3 illion F$&1# 8


23/60

ORACLE STRATEGIC PLAN $/

Figure $. Glo al so6tware re+enue. This 6igureillustrates glo al so6tware re+enue share in $&1/.

Organization Analysis

Mission

Oracle>s -ission is to deli+er the highest ualit, ser+ice in6or-ation at the low cost8 its

4roduct and ser+ices -ust e the -ost relia le8 6astest8 -ost secure8 -ost scala le and easiest to

use 6or all t,4es o6 in6or-ation. Oracle ai-s to do this , 6ostering an inclusi+e en+iron-ent that

le+erages the di+erse ac7grounds and 4ers4ecti+es o6 all e-4lo,ees8 su44liers8 custo-ers8 and

4artners in order to dri+e a sustaina le glo al co-4etiti+e ad+antage.

In order to actuali e this8 the co-4an, intends has continuousl, deli+ered to its

custo-ers8 the est o6 in6or-ation with the highest ualit, o6 Ser+ice at the lowest cost.

According to "ar7 Hurd8 FCo0CEO 8 the IT en+iron-ents ha+e eco-e so co-4le! that

in -ost enter4rises the iggest chun7 o6 IT udget is s4ent :ust 7ee4ing the lights on. The


24/60


a+erage co-4an, s4ends a out three0 uarters o6 its IT udget on integration8 -aintenance8 and

routine tas7s. This lea+es the co-4anies with onl, $# 4ercent to in+est in inno+ation.

;ue to the e+er changing en+iron-ent witnessed in the industr,. In order to re-ain

co-4etiti+e8 Oracle2s -ission is susce4ti le to changes. Hence the co-4an,2s 4roduct and

ser+ices will ha+e to e the 6astest8 -ost accessi le8 -ost de4enda le8 -ost secured8 easiest to

use8 6or all t,4es o6 in6or-ation -anage-ent.

&ision

JOracle8 wants to e the co-4an, that hel4s its custo-ers achie+e a s4ending alance.K

To 6ul6ill this8 Oracle uses three 4rinci4les=0• Si-4li6, ' Enter4rises -ust increase the s4eed o6 in6or-ation deli+er, with integrated

s,ste-s.• Standardi e ' Enter4rises -ust reduce cost and -aintenance with o4en8 easil, a+aila le

technolog,.• Auto-ate ' Enter4rises -ust i-4ro+e o4erational e66icienc, with technolog, and est

4ractices.

?ith these 4rinci4les in 4lace8 Oracle intends to hel4 its custo-ers si-4li6, its IT setting8

so as to 6ree u4 -one,8 ti-e8 and resources that could e in+ested into inno+ation. This allows

Oracle to 4ro+ide a wide0ranging and 6ull, incor4orated stac7 o6 cloud a44lications8 4lat6or-

ser+ices8 and engineered s,ste-s.

Core &alues and Operating 4uidelines

The 6ollowing core +alues are crucial to Oracle2s usiness=

• Integrit,= Oracle e-4lo,ees -ust de-onstrate honest, and sound ethical eha+ior in all

usiness transactions and 4ersonal integrit, in all dealings with others.• "utual res4ect= Oracle e-4lo,ees -ust consistentl, treat indi+iduals with res4ect and

dignit,.


25/60

ORACLE STRATEGIC PLAN $#

• Tea-wor7= Oracle e-4lo,ees -ust wor7 together as a tea- 6or the collecti+e interests o6

the co-4an,.• Co--unication= Oracle e-4lo,ees -ust share in6or-ation widel, and e66ecti+el, with

each other8 e!ce4t when con6identialit, is re uired.• Inno+ation= Oracle e-4lo,ees -ust alwa,s see7 inno+ati+e and creati+e a44roaches to

4ro le- sol+ing.• Custo-er satis6action= Oracle e-4lo,ees -ust consistentl, treat custo-er satis6action as

a to4 4riorit,.• ualit,= Oracle e-4lo,ees -a7e e!cellence and ualit, a 4art o6 da,0to0da, wor7

4rocesses and see7 continuous i-4ro+e-ent in all that the, do.• (airness= Oracle e-4lo,ees are co--itted to dealing 6airl, with custo-ers8 su44liers8

and one another.• Co-4liance= Oracle e-4lo,ees co-4l, with all laws and regulations that go+ern oracle2s

usiness.• Business conduct= Oracle e-4lo,ees o ser+e the standards that ha+e een esta lished ,

oracle and act ethicall, in their a44roach to usiness decisions.

Corporate 4overnance

As a *.S. ased cor4oration that is 4u licl, traded8 Oracle2s goal is to co-4l, with the

laws o6 the *nited States and the laws o6 e+er, countr, in which it conducts usiness. The

co-4an, 4ro+ides an e!hausti+e 4u lic accounting and anal,st in6or-ation. It also 4ro+ides

i-4ortant in6or-ation a out its +alues and +ision the Board o6 ;irectors and Board Co--ittees

E!ecuti+es usiness ethics 6or e-4lo,ees8 4artners8 and su44liers.

Since it is a *.S.0 ased cor4oration8 the co-4an, ensures that it is in co-4liance with

go+ern-ent regulations such as the Sar anes0 O!le, regulations. In addition to this8 it also

creates 4roducts and solutions that are intended to hel4 other co-4anies con6or- to the letter and


26/60


s4irit o6 Sar anes0O!le, , increasing the control and e66icienc, o6 its custo-ers o+er critical

usiness in6or-ation and i-4ro+ing their 6inancial trans4arenc,.

Corporate 4overnance !rinciples

• ;irector uali6ications ' A No-ination and Go+ernance Co--ittee assesses 4otential

Board -e- ers ased on their le+el o6 inde4endence8 4ersonalit,8 and insight.

• ;irector Res4onsi ilities ' The asic dut, o6 the directors is to use their usiness

:udg-ent8 while acting in a -anner the, is elie+ed to e in the est concern o6 the

co-4an, and its shareholders. Board -e- ers are to attend the Annual "eeting o6

Shareholders8 Board -eetings8 and -eetings o6 co--ittees on which the, ser+e.

• ;irector Co-4ensation ' The Co-4ensation Co--ittee deter-ines the 6or- and a-ount

o6 director co-4ensation annuall,8 in agree-ent with the 4olicies and 4rinci4les

esta lished in its charter.

• Chie6 E!ecuti+e O66icer E+aluation ' The Co-4ensation Co--ittee conducts an annual

re+iew o6 the CEO2s 4er6or-ance and co-4ensation.

• Board E+aluation ' The Board8 led , the No-ination and Go+ernance Co--ittee8

4eriodicall, conducts a sel60e+aluation to decide whether the Board and its co--ittees

are running e66ecti+el,.

Corporate ocial *esponsibilities

Oracle has a length, histor, o6 e-4lo,ee +olunteeris-8 generous gi+ing8 re+erence 6or

the en+iron-ent8 and a strong o ligation 6or culti+ating education. The co-4an, has ne+er ta7en

the ste4s o6 recording their e66orts 6or the ene6it o6 their e-4lo,ees8 shareholders8 custo-ers and

4olic, -a7ers around the world0 until now. The in+enti+e s4irit ehind Oracle2s technological

acco-4lish-ent also dri+es in+enti+e solutions and 4rogra-s 6or the ene6it o6 their


27/60

ORACLE STRATEGIC PLAN $%

co--unities. ?ith 4rogra-s such as JThin7 uestK8 the co-4an, ena les students to create

educational we sites8 that uilds understanding across cultures and JOracle Acade-,K which

colla orates with secondar, schools to educate students.

Core Competencies

Oracle technologies can e 6ound in al-ost all industr,8 and in the data hu s o6 1&& o6 the

(ortune Glo al 1&& co-4anies. The co-4an, de+elo4s and de4lo,s hundred 4ercent F1&&

internet0 ased enter4rise so6tware through its whole 4roduct line that includes= data ase8

usiness a44lications8 a44lication de+elo4-ent8 and decision su44ort tools across industries such

as Co--unications8 (inancial Ser+ices8 Healthcare8 Insurance8 Pu lic Sector8 Retail and*tilities. As a result o6 this8 the co-4an, has uilt the 6ollowing co-4etencies o+er the entire

4eriod o6 its e!istence8 and the, are=

• Si-4licit, o6 Product= *ncertaint, see-s to ha+e turned into a nor-al o4erating 4rocess

in the usiness world. ?ith the e!isting glo al econo-ic state co- ined with the 6orces

o6 a h,4erco-4etiti+e glo al -ar7et4lace8 co-4anies are a66ected in -an, wa,s.

Although usinesses are 6eeling the test o6 sti66 IT udgets8 de4art-ental cuts8 and

resource constraints8 a distinguished and i-4ortant usiness need has de+elo4ed= that2s

the need to si-4li6,. In the usiness en+iron-ent o6 toda,8 re+olutionar, thin7ing

enter4rises are ta7ing a 7een interest in what the, need and what the, don2t. There ,

tri--ing su4er6luous e!4enditure8 ditching 4ractices that don2t dri+e re+enue8 and

restructuring co-4licated 4rocesses. Through a continuous in+est-ent on R);8 Oraclehas uilt a core co-4etence in si-4li6,ing 4roducts used , its custo-ers8 and it has

eco-e user2s to4 sho48 when it co-es to IT related 4roducts. The co-4an, elie+es

that8 , stri+ing 6or si-4licit,8 it can introduce IT in6rastructures that could cut through


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ORACLE STRATEGIC PLAN $<

co-4le!it,8 and e+entuall, dri+e usiness ene6its. ?ith this co-4etence8 Oracle has

hel4ed co-4anies in the 6ollowing

− Lowering costs , consolidating wor7loads onto 6ewer 4lat6or-s

− O4ti-i ing in6rastructure to reduce ottlenec7s8 accelerate 4er6or-ance8 and

ena le etter real0ti-e decision0-a7ing

− Gi+ing users 6aster access to critical in6or-ation

− ;eli+ering 6aster ti-e0to0+alue , eli-inating co-4le! s,ste- integration

− Enhancing accounta ilit, and control o+er IT assets

• Research and ;e+elo4-ent= R); has constantl, een a strategic 6ocus at Oracle hence

its s4ending on R); has alwa,s een high. In the :ust concluded 6inancial ,ear8 the

co-4an, s4ent o+er #.5 illion on R);. The 6ir-2s 4osition8 as detailed in its annual

re4ort8 is Jwe intend to continue to in+est signi6icantl, in our research and de+elo4-ent

e66orts8 ecause8 in our :udg-ent8 the, are essential to -aintaining our co-4etiti+e

4osition.

Figure %. Oracle2s Research and ;e+elo4-ent Cost.


29/60


This 6igure illustrates Oracle2s research andde+elo4-ent de4art-ent cost.

Although Oracle has lac7ed ehind "icroso6t and IB" in ter-s o6 in+est-ent onR);8 ut in recent ti-es it has i-4ro+ed8 with the co-4an, -arginall, s4ending -ore

dollars than IB" in $&1#. This in+est-ent in R);8 is e!4ected to grow its -ar7et in the

highl, co-4etiti+e -ar7et.

Figure &. Oracle2s R); co-4arison with co-4etitors. This 6igure illustratesOracle2s co-4etitors.

• Production and In6or-ation S,ste-s= As a 4re-ier -a7er o6 usiness so6tware8 Oracle

has een a le uild cost sa+ing e!4ertise , sa+ing -ore than 1 illion in o4erating

costs through coordinated and strea-lined usiness 4rocesses. Its three tier a44roach8

Jsi-4li6,8 standardi e8 and auto-ateK8 6or- the core o6 its -one, sa+ing strateg,. In the

creation o6 the ser+ice it 4ro+ides to its custo-ers8 Oracle constantl, strides to create

co-4etiti+e ad+antage , 4ro+iding its custo-ers with a higher return on in+est-ent. It


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ORACLE STRATEGIC PLAN /&

does this , lowering the total cost o6 its so6tware , i-4ro+ing integration8 decreasing

installation ti-es8 lowering ad-inistration costs8 and i-4ro+ing the ease o6 use. MOur

lean -anu6acturing solutions increase -ar7et4lace e66iciencies8 4ro+iding custo-ers with

uanti6ia le return on in+est-ent and co-4etiti+e ad+antageM sa,s Larr, Ellison8 CEO o6

Oracle.

• Ac uisition= Oracle o+er ti-e has turned ac uisition into a core co-4etence. Oracle is

6ollowing a strateg, ased on ac uisitions in order to o66er a co-4lete 4ac7age o6

ser+ices to its custo-ers8 which will e+entuall, go a long wa, in ensuring the long0ter-

growth o6 the co-4an,. The co-4an, continuousl, see7s out to rein6orce its 4roduct

o66erings8 6ast0trac7 inno+ation8 -eet custo-er de-and -ore swi6tl,8 and increase 4artner

o44ortunities. An essential 4art o6 Oracle>s "ergers and Ac uisitions idea is its

de4enda le co--it-ent to custo-er ser+ice and 4roduct su44ort while attaining

6inancial return o :ecti+es and creating +alue 6or its shareholders. According to (or es8

Oracle recentl,8 ac uired "a!,-iser FCloud "ar7eting Co-4an, 8 a leader in cloud

so6tware that allows ad+ertisers to enhance ad content 4ositioned in indi+idual rowsers

so as to -a7e the -ost o6 user engage-ent. Although Oracle is a co-4arati+el, late

4la,er to the cloud co-4uting -ar7et8 it howe+er chose to enhance organic growth

through an e!tensi+e succession o6 ac uisitions to 6uel growth. It is e!4ected that this

ac uisitions will aid the co-4an, ho4es o6 catching u4 with ado e in the cloud usiness.

Organizational Broad 4oals

Oracle>s nu- er one goal is to Identi6, and e!4loit custo-ers2 6ull +alue , continuousl,

see7ing new wa,s to strengthen its 4roduct o66erings8 accelerate inno+ation8 -eet custo-er

de-and -ore ra4idl,8 and e!4and 4artner o44ortunities.


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ORACLE STRATEGIC PLAN /1

In order to actuali e this goal8 Oracle has i-4le-ented a -erger and ac uisition strateg,

that has e+entuall, eco-e an integral 4art o6 the co-4an,2s 4hiloso4h,. It consistentl, co--its

to custo-er ser+ice and 4roduct su44ort while achie+ing 6inancial return o :ecti+es and creating

+alue 6or its shareholders. The rationale ehind this strateg, can e ro7en down into three 7e,

4rinci4les na-el,=

• O tain a custo-er ase that increases -ar7et share and re+enue. This 4rinci4le allows

Oracle to ac uire co-4anies such as Peo4leSo6t8 Sie el and BEA S,ste-s. This

ac uisition will dri+e the co-4an,2s 6inancials8 while increasing its recurring re+enues

and 4ro6its.• Bu, into a new 4roduct line that 6ills a -ar7et ga4. Oracle is a le to u, into new

4roducts or e!4ertise that will hel4 it 6ill the -ar7et ga4. (or e!a-4le8 the co-4an,

ac uired H,4erion so that it could 4ush into new -ar7et seg-ents.

• Technolog, deals that i-4ro+e a core ca4a ilit,. It also ac uired SAP2s (rictionless

Co--erce8 so that it could i-4ro+e its core ca4a ilities in the industr,.

Organizational pecific 4oals

Oracle2s s4eci6ic goal is to continue to gain share and e the nu- er one co-4an, in the

sales o6 ;B"S8 "iddleware and a44lication.K

Organization,)evel and Business 5nit trategies

Business )evel trategies and Corporate )evel trategies

There are 6i+e usiness le+el strategies 6or 6ir- to esta lish their 4ositioned in strateg,

against its co-4etitors which are cost leadershi48 di66erentiation8 6ocused cost leadershi48


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ORACLE STRATEGIC PLAN /$

6ocused di66erentiation8 and integrated cost leadershi4D di66erentiation FHitt8 Ireland8 )

Hos7isson8 $&1# . There6ore8 ased on its internal resources8 ca4a ilities8 and core co-4etencies8

a co-4an, can choose etween cost co-4etiti+e ad+antage and distincti+eness co-4etiti+e

ad+antage to i-4le-ent their usiness strateg, FHitt8 Ireland8 ) Hos7isson8 $&1# . Additionall,8

there are two t,4es o6 target -ar7et8 which are road and narrow -ar7et seg-ent. Howe+er8 in

this case8 Oracle has selected integrated cost leadershi4 and di66erentiation strateg, to re4resent

their e66ecti+e -atch etween their strength8 wea7ness8 o44ortunit, and threat to achie+e success.

The integrated cost leadershi4D di66erentiation strateg, howe+er -a7es Oracle to e a le

to 4roduce 4roducts with so-e di66erentiated 6eatures FHitt8 Ireland8 )Hos7isson8 $&1# . B,using the integrated cost leadershi4D di66erentiation strateg,8 Oracle is e a le to ada4t uic7l, to

new technologies and ra4id changes in their e!ternal en+iron-ents. "oreo+er8 , concentrating

on de+elo4ing two sources o6 co-4etiti+e ad+antage increases their nu- er o6 4ri-ar, +alue

chain acti+ities and su44ort 6unctions in which the 6ir- -ust eco-e co-4etent.

"oreo+er8 according to its cor4orate le+el strateg,8 Oracle can e deter-ined a usiness

with low le+el o6 di+ersi6ication strateg,8 ecause its re+enue co-es 6ro- three di66erent seg-ent

which are So6tware and Cloud8 Hardware S,ste-s8 and Ser+ices. So6tware and cloud ha+e %3

4ercent o6 its re+enues8 hardware s,ste-s ha+e 15 4ercent o6 its re+enues8 and ser+ices ha+e 1&

4ercent o6 its re+enues in $&15. (urther-ore8 a co-4an, that i-4le-ents this di+ersi6ication can

recei+e 4ositi+e returns ecause the, de+elo4 ca4a ilities use6ul 6or these -ar7ets and can

4ro+ide su4erior ser+ice to their custo-ers FHitt8 Ireland8 ) Hos7isson8 $&1# .

*elations Bet(een trategies and 4oals

To align their strategies and goals8 Oracle has een 4resenting an i-4ressi+e and

ad+anced strateg, co-4ared to its co-4etitor and a strong 4roduct suite and -ar7et align-ent as


33/60

ORACLE STRATEGIC PLAN //

well as custo-er su44ort strateg,. "oreo+er8 Oracle also has sta ilit, and +ia ilit, 6ro- its

-anage-ent grou4 , o66ering consulting8 education8 and su44ort ser+ices to its custo-ers.

(urther-ore8 the, also o66er ser+ices solution to hel4 custo-ers and 4artners -a!i-i e the

4er6or-ance o6 their in+est-ents and their ser+ice is di66erentiated ased on their 6ocus on

technologies8 e!tensi+e e!4erience8 and road sets o6 intellectual 4ro4ert, and est 4ractices.

Competitor trategies

Oracle 6aces intense co-4etition in all as4ects o6 their usiness. The nature o6 the IT

industr, creates a co-4etiti+e landsca4e that is constantl, e+ol+ing as 6ir-s e-erge8 e!4and or

are ac uired8 as technolog, e+ol+es and as custo-er de-ands and co-4etiti+e 4ressuresotherwise change. Their custo-ers are de-anding less co-4le!it, and lower total cost in the

i-4le-entation8 sourcing8 integration and ongoing -aintenance o6 their enter4rise so6tware and

hardware s,ste-s. Their enter4rise so6tware and cloud and hardware o66erings co-4ete directl,

with so-e o66erings 6ro- so-e o6 the largest and -ost co-4etiti+e co-4anies in the world8

including "icroso6t Cor4oration F"icroso6t 8 International Business "achines Cor4oration

FIB" 8 Intel8 Hewlett0Pac7ard Co-4an, FHP and SAP. "oreo+er their co-4etitors are also

s-aller co-4anies li7e Oracle>s enter4rise so6tware and hardware o66erings co-4ete directl,

with the o66erings 6ro- so-e o6 the largest and highl, co-4etiti+e co-4anies in the world8

including "icroso6t8 IB"8 Intel8 HP and SAP8 and s-aller co-4anies li7e sales6orce.co-8 and

?or7da,8 a-ong others. The co-4an,>s hardware s,ste-s usiness co-4etes with8 a-ong

others8 s,ste-s -anu6acturers and resellers o6 s,ste-s -icro4rocessorDchi4 -anu6acturers and

4ro+iders o6 storage 4roducts. The co-4an, also 6aces co-4etition 6ro- o4en source so6tware

initiati+es in which co-4etitors -a, 4ro+ide so6tware and intellectual 4ro4ert, 6or 6ree.


34/60


Howe+er8 the low arriers to entr, in -an, o6 the co-4an,>s -ar7et seg-ents new

technologies and new and growing co-4etitors 6re uentl, e-erge to challenge the co-4an,2s

o66erings. There6ore8 technolog, -ar7ets are associated with low arriers to entr, and ra4id

ad+ance-ents which gi+e rise to -an, co-4etiti+e 4roducts with the 4otential to e66ecti+el,

reduce Oracle>s do-inant 4osition. "oreo+er8 the co-4an, or its co-4etitors -a, ta7e certain

strategic actions8 including ac uisitions8 4artnershi4s and :oint +entures8 or re4ositioning o6

4roduct lines8 which in+ite e+en greater co-4etition in one or -ore 4roduct categories.

6OT Analysis

trengt"s

• ;i+ersi6ied geogra4hic 4resence and custo-er aseOracle has a di+ersi6ied geogra4hic 4resence and custo-er ase8 and the co-4an, has

strategicall, e!4anded its 4resence across the glo e. It o4erates in -ore than 15# countries

and has een steadil, e!4anding its geogra4hic 6oot4rint. In addition to the traditional

-ar7ets 6or its ser+ices which include North A-erica and Euro4e8 the co-4an, has een

e!4anding its 4resence in e-erging -ar7ets such as Asia Paci6ic8 Latin A-erica8 the

"iddle East8 and A6rica. (urther-ore8 Oracle also has a di+ersi6ied custo-er ase

elonging to di66erent end -ar7ets. Also8 the co-4an,2s custo-ers include the to4

aeros4ace and de6ense co-4anies8 glo al airlines8 auto-oti+e co-4anies8 an7s8

go+ern-ents8 high tech co-4anies8 insurers8 -anu6acturers8 -edical de+ice co-4anies8 oil

and gas co-4anies8 4har-aceutical co-4anies8 retailers8 and so 6orth.

Howe+er8 di+ersi6ied geogra4hic 4resence and custo-er ase contri utes to Oracle>s

consistent organic re+enue growth and reduces its de4endence on an, single countr, or

custo-er. Additionall,8 di+erse geogra4hic 4resence allows the co-4an, to -aintain a


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ORACLE STRATEGIC PLAN /#

strong growth 4ace in its target -ar7ets8 dri+en , attracti+e -ar7et share e!4ansion

o44ortunities and strong underl,ing -ar7et growth characteristics.• Strong so6tware and cloud usiness

The co-4an, has esta lished a strong so6tware usiness that ena led it to -aintain a

strea- o6 recurring re+enues. The co-4an,2s so6tware and cloud usiness includes

so6tware license u4dates and 4roduct su44ort8 new so6tware licenses and cloud so6tware

su scri4tions8 and cloud in6rastructure0as0a0ser+ice seg-ents FOracle8 $&1# . Also it can

e said that Oracle is the leader in data ase so6tware -ar7et. "oreo+er8 according to

industr, esti-ates8 the co-4an,2s share in data ase so6tware licenses -ar7et was -ore

than 5# in $&15. Oracle>s re+enue share is -uch higher that its 6our closest co-4etitors

co- ined. The co-4an, is also a leader in a44lication so6tware and -iddleware -ar7ets.

"oreo+er8 Oracle also en:o,s high so6tware renewal rates. The custo-ers o6 Oracle

are 4ri-aril, -ediu-0to0large usinesses8 including custo-ers in (ortune 1&&&. Howe+er8

Oracle2s strong growth is attri uted to increase in the de-and 6or so6tware 4roducts and

su scri4tion o66erings8 so6tware license u4dates and 4roduct su44ort o66erings8 and

increase the renewals o6 so6tware license u4dates and 4roduct su44ort contracts 6ro-

custo-ers. The co-4an,2s strong so6tware and cloud usiness8 whose 4roducts and

ser+ices are o66ered on a su scri4tion asis8 would ensure a continuous strea- o6 re+enue

in6low o+er the ,ears. Additionall,8 it also o66ers a strong recurring re+enue ase which

ena les the co-4an, 6ocus on 6uture growth in+est-ents.

• Inorganic growth strateg,

The co-4an, ado4ts an inorganic growth strateg, to enhance its 4roducts and

ser+ices8 and e!4and its custo-er ase. The ac uisition that Oracle has done 6or ,ears

enhances Oracle>s cloud o66erings. The co-4an, strong 6ocus on growth through


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ac uisitions strengthens its co-4etiti+e 4osition enhances the 4roducts and ser+ices8

e!4ands its custo-er ase8 4ro+ides greater scale to accelerate inno+ation and dri+e

re+enue growth.

• Sustaina le -argins and cash 6lows

Oracle en:o,s strong -argins and cash 6low con+ersion rates. In ( $&158 the

co-4an,>s o4erating -argin was /


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ORACLE STRATEGIC PLAN /%

Opportunities• Increased ado4tion o6 cloud co-4uting ser+ices

The worldwide de-and 6or cloud co-4uting ser+ices is e!4ected to grow

signi6icantl, in the co-ing ,ears. The cloud co-4uting has een increasing as it ena les

co-4anies to reduce their e!4enses related to u46ront ro,alt, or licensing 4a,-ents8

in+est-ent in hardware in6rastructure and other o4erating e!4enses. According to industr,

esti-ates8 the glo al 4u lic cloud ser+ices> s4ending is 6orecast to grow $$.< during

$&15 to 1< and e+en reach -ore than 1$% illion in $&1


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ORACLE STRATEGIC PLAN /<

4ort6olio o6 cloud 4roducts and ser+ices. "oreo+er8 Oracle also cou4led with continued

6ocus on e!4anding its cloud o66erings hence it can 4ro+ide the- an o44ortunit, to gain

new custo-ers and increase its re+enues.

• Big data 4resents growth o44ortunit,Big data8 which is a 4ri-ar, contri utor to the 4ace o6 o+erall data growth8 re6ers to

the large re4ositories o6 cor4orate and e!ternal data8 including unstructured in6or-ation

created , new a44lications including -edical8 entertain-ent8 energ, and geo4h,sical8

social -edia and other we re4ositories. It also re6ers to the new anal,tics and other

technologies that are a+aila le to hel4 4eo4le do things with the +ast a-ounts o6 enter4rise

and e!ternal data. "oreo+er8 the co-4an, is 7een to ta7e ad+antage o6 this growth

o44ortunit, to 6urther organi e8 anal, e8 and inter4ret re4ort on and act on in6or-ation

6ro- these high +olu-e data sources. (urther-ore8 the co-4an, also o66ers anal,tics

so6tware to le+erage ig data and enter4rise data to ena le organi ations to anal, e the

data. The co-4an,>s growing 4resence8 increased 6ocus8 and the 4ositi+e outloo7 6or the

end -ar7et 4ro+ide it with an o44ortunit, to gain -ore custo-ers and increase its

re+enues in 6uture.• Positi+e outloo7 6or -o ile co-4uting -ar7et

The increasing ado4tion o6 s-art4hones and ta lets8 touch and connected de+ices and

the increasing de-and 6or -o ile a44lications is leading the strong growth in the -o ile

co-4uting -ar7et. (urther-ore8 Oracle o66ers a range o6 so6tware 6or -o ile co-4uting.

Also8 the co-4an, 6urther enhanced its -o ile a44lications during the ,ear. The

co-4an,2s growing -o ile co-4uting o66erings and the strong growth in the end -ar7et

would ena le Oracle to -eet the increasing custo-er de-and 6or -o ile a44lications and

dri+e to4line growth in the 6uture.


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• Growing enter4rise so6tware s4ending

The enter4rise so6tware s4ending has een growing ra4idl, and is e!4ected to grow

6urther. This growth is e!4ected to e dri+en , 7e, -ar7ets such as su44l, chain

-anage-ent and custo-er relationshi4 -anage-ent. Also8 growing ado4tion o6 on0

4re-ises and SaaS will 6urther dri+e a -odest increase in worldwide so6tware s4ending.

(urther-ore8 Oracle o66ers a road 4ort6olio o6 su44l, chain -anage-ent a44lications that

custo-ers can ado4t as an entire suite or indi+idual a44lications to enhance its re+enues

and -ar7et share in the co-ing 4eriod.

T"reats

• Increased ado4tion o6 their data ase 4oses a threat to Oracle2s do-inance

The increasing ado4tion o6 the data ase 4oses a threat to the co-4an,2s traditional

relational data ase usiness ecause the so6tware license usiness 6aces threat 6ro- the

growing ado4tion o6 data ases o66ered and a +ariet, o6 other ser+ices that use in0-e-or,

technolog, and new o66erings at the data ase la,er. Though the co-4an, has een

o66ering new data ase solutions8 this -ar7et is do-inated , o4en0source data ase

-anage-ent s,ste-s o66ered , others. Actuall,8 the increasing ado4tion o6 data ase ,

the enter4rises due to growing online a44lications8 -a, also lead the -igration o6 Oracle2s

e!isting clients to co-4etitors which ha+e a higher +isi ilit, o+er Oracle NoS L

data ases.

(urther8 -an, o6 the custo-ers e-4lo, Oracle data ases si-ultaneousl, uilding a

-iddle la,er o6 ser+ices co-4onents that allows the a44 to decide which data ase to use

6or which wor7load. Howe+er8 the slow ado4tion o6 the co-4an,2s data ases and the

growing usage o6 o4en0source data ases o66ered , the start0u4 technolog, 6ir-s would


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ORACLE STRATEGIC PLAN 5&

negati+el, i-4act the co-4an,2s traditional data ase usiness and ad+ersel, a66ect its

-ar7et share and re+enues in the 6uture.

• Intense co-4etition

The co-4an, 6aces intense co-4etition in all as4ects o6 its usiness. E+ol+ing

technolog, and custo-er de-ands ha+e een constantl, changing the co-4etiti+e

landsca4e. e, co-4etiti+e 6actors in each o6 the seg-ents in which the co-4an,

currentl, co-4etes include total cost o6 ownershi48 4er6or-ance8 scala ilit,8 relia ilit,8

securit,8 6unctionalit,8 e66icienc,8 ease o6 -anage-ent and ualit, o6 technical su44ort.

The intense co-4etition -a, increase the 4ricing 4ressures on the co-4an, and other

4la,ers o4erating in the sa-e -ar7et. I6 the co-4an,2s co-4etitors o66er dee4 discounts

on certain 4roducts or ser+ices or de+elo4 4roducts that the -ar7et4lace considers -ore

+alua le8 Oracle -a, need to lower 4rices or o66er other 6a+ora le ter-s in order to

co-4ete success6ull,. An, road0 ased change to 4rices and 4ricing 4olicies could cause

the co-4an,2s re+enues to decline or e dela,ed as the sales 6orce i-4le-ents and

custo-ers ad:ust to the new 4ricing 4olicies.

Oracle2s co-4etitors -a, undle 4roducts 6or 4ro-otional 4ur4oses or as a long0ter-

4ricing strateg, or 4ro+ide guarantees o6 4rices and 4roduct i-4le-entations. These

4ractices could8 o+er ti-e8 signi6icantl, constrain the 4rices that the co-4an, can charge

6or certain o6 its 4roducts. There6ore8 intense co-4etition 6ro- e!isting and new hardware

s,ste-s or so6tware co-4etitors could i-4act Oracle>s results o6 o4erations and usiness

4ros4ects through 6ewer custo-er orders8 reduced 4ricing8 lower re+enues or lower

4ro6its.

• (oreign e!change currenc, ris7s


41/60


Oracle>s re+enue and o4erating inco-e are su :ect to +aria ilit, due to the e66ects o6

6oreign currenc, 6luctuations against the *S dollar. The 4ri-ar, currencies to which the

co-4an, is e!4osed include the Euro8 @a4anese en and British Pound. The co-4an,

deri+es a signi6icant 4ortion o6 its re+enue and o4erating inco-e outside the *S8 and

there6ore its 6inancial results -a, 6luctuate due to the e66ects o6 such 6oreign currenc,

6luctuations. The co-4an, enters into 6oreign currenc, 6orward contracts so that increases

or decreases in the 6oreign currenc, e!4osures are o66set , gains or losses on the 6oreign

currenc, 6orward contracts in order to -itigate the ris7s and +olatilit, associated with the

6oreign currenc, transaction gains or losses. Howe+er8 these -a, not hedge the ris7co-4letel, leading to 6oreign e!change currenc, translation losses. (urther-ore8

e!change rate 6luctuations 6ro- ti-e to ti-e -a, signi6icantl, wea7en the co-4an,>s

results o6 o4erations and 6inancial condition.

Advantages and 7isadvantages of Eac" trategy

Since Oracle i-4le-ents di66erentiation strateg,8 it has signi6icant as4ect as an e66ort to

create de-and 6or their distinct 4roducts and charge e!tra 4rice which resulting in greater

re+enue and higher 4ro6ita ilit,. The ad+antages o6 this strateg, are the custo-ers de+elo4 rand

ro,alt,8 4ower6ul su44liers are not a 4ro le- ecause the co-4an, is geared -ore toward the

4rice it can charge than its costs8 di66erentiators can 4ass 4rice increases on to custo-ers8

4ower6ul u,ers are not a 4ro le- ecause the 4roduct is distinct8 and the threat o6 su stitute

4roducts de4ends on co-4etitors2 a ilit, to -eet custo-er needs. Howe+er8 there are also

disad+antages 6or this strateg,8 which are di66icult, -aintaining long ter- distincti+eness in

custo-ers2 e,es and di66icult, -aintaining their 4rice. "oreo+er8 6or Oracle8 their success will


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ORACLE STRATEGIC PLAN 5$

de4end u4on their a ilit, to de+elo4 new 4roducts and ser+ices8 integrate ac uired 4roducts and

ser+ices8 and enhance their e!isting 4roducts and ser+ices. (urther-ore8 6or its cor4orate le+el

strateg,8 Oracle is a le to create +alue , sharing acti+ities and sharing core co-4etencies8 which

is an in6or-ation technolog, usiness. Howe+er8 since it2s in the sa-e industr,8 i6 the industr, is

not in a good situation8 the whole cor4oration will directl, e a66ected.

8ey !erformance Indicators -8!I’s3

Oracle 4ro-ises are su44orted , these 6oundations integrit,8 res4ect8 tea-wor78

co--unication8 inno+ation8 custo-er satis6action8 ualit,8 6airness8 usiness conduct8 and

co-4liance which are the co-4an,2s co--it-ent to the custo-ers. The technical e!4ertise and

-ar7eting including -eet the real needs o6 custo-ers etter than its co-4etitors8 de+elo4 core

co-4etencies which lead to higher le+el o6 custo-er satis6action8 and 4rocess integration to hold

the 7e, are their 7e, 4er6or-ance indicators. "oreo+er8 the, use Oracle Scorecard and strateg,

-anage-ent as a solution to de6ine8 co--unicate8 and -easure strateg, and 4er6or-ance. As

-ore and -ore e!ecuti+es reali e the e66ecti+eness o6 PI2s towards -easuring and

co--unicating organi ational goals8 the need 6or a technolog, solution to de6ine8 -easure and

co--unicate PI2s is now stronger than e+er. Oracle Strateg, "anage-ent Solutions are 4art o6

Oracle>s -ar7et0leading suite o6 4er6or-ance -anage-ent a44lications8 and ena le organi ations

to 4er6or- e!tended re4orting and anal,sis through tight integration with the usiness

intelligence tools.

+unctional trategies

Mar#eting9 Oracle directl, -ar7et and sell their 4roducts and ser+ices to usinesses o6

-an, si es and in -an, industries8 go+ern-ent agencies and educational institutions. The, also

-ar7et and sell their 4roducts through indirect channels. "oreo+er8 in the *.S.8 their sales and


43/60

ORACLE STRATEGIC PLAN 5/

ser+ices e-4lo,ees are ased in their head uarters and in 6ield o66ices throughout the countr,.

(urther-ore8 their international su sidiaries sell8 su44ort and ser+ice their 4roducts and o66erings

in their local countries as well as within other 6oreign countries where the, do not o4erate

through a direct sales su sidiar,. Their geogra4hic co+erage 4ro+ides sta ilit, to their o4erations

and re+enue strea-s to o66set geogra4h, s4eci6ic econo-ic trends and o66ers the- an o44ortunit,

to ta7e ad+antage o6 new -ar7ets 6or their 4roducts.

(urther-ore8 the, also -ar7et their 4roducts worldwide through indirect channels. The

co-4anies that co-4rise their indirect channel networ7 are -e- ers o6 the Oracle Partner

Networ7 which is a glo al 4rogra- that -anages their usiness relationshi4s with a large8 road0 ased networ7 o6 co-4anies8 including inde4endent so6tware and hardware +endors8 s,ste-

integrators and resellers that deli+er inno+ati+e solutions and ser+ices ased u4on their 4roduct

o66erings. The Oracle Partner Networ7 4rogra- e!tends their -ar7et reach , 4ro+iding their

4artners with the resources the, need to e success6ul in deli+ering solutions to custo-ers

glo all,.

+inance9 Oracle 6ollows the Generall, Acce4ted Accounting Princi4les FGAAP 8

(inancial Accounting Standards Board2s F(ASB 8 Accounting Standards Codi6ication FASC 8 and

a44lica le guidance issued , the *nited States Securities and E!change Co-ission FSEC

which re uires -anage-ent tea- to -a7e assu-4tions that a66ect the a-ounts re4orted in the

6inancial state-ents and acco-4an,ing notes8 e+en though so-eti-es actual results could e

di66er 6ro- the esti-ation. Generall, the esti-ations and assu-4tions o6 the 6inancial state-ents

ha+e een consistent with the actual e!4erience.

Operations9 To 4roduce their hardware 4roducts8 the, rel, on oth their internal

-anu6acturing o4erations as well as third 4art, -anu6acturing 4artners. Their internal


44/60


-anu6acturing o4erations consist 4ri-aril, o6 -aterials 4rocure-ent8 asse- l,8 testing and

ualit, control o6 their Oracle Engineered S,ste-s and certain o6 their enter4rise and data center

ser+ers8 storage s,ste-s and networ7ing 4roducts. (or all other -anu6acturing8 the, generall,

rel, on third 4art, -anu6acturing 4artners to 4roduce their hardware related co-4onents and

hardware 4roducts and the, -a, in+ol+e their internal -anu6acturing o4erations in the 6inal

asse- l,8 testing and ualit, control 4rocesses 6or these co-4onents and 4roducts. The,

distri ute -ost o6 their hardware 4roducts either 6ro- their 6acilities or 4artner 6acilities. Their

-anu6acturing 4rocesses su stantiall, are ased on standardi ation o6 co-4onents across

4roduct t,4es8 centrali ation o6 asse- l, and distri ution centers and a J uild0to0orderK-ethodolog, in which 4roducts generall, are uilt onl, a6ter custo-ers ha+e 4laced 6ir- orders.

Production o6 their hardware 4roducts re uires that the, 4urchase -aterials8 su44lies8 4roduct

su asse- lies and 6ull asse- lies 6ro- a nu- er o6 +endors. (or -ost o6 their hardware

4roducts8 the, ha+e e!isting alternate sources o6 su44l, or such sources are readil, a+aila le.

*esearc" and 7evelopment9 The, de+elo4 the considera le -a:orit, o6 their 4roducts

internall,. In addition8 the, ha+e stretched their 4roduct o66erings and 7nowledgea le 4ro4ert,

through ac uisitions o6 usinesses and technologies. The, also o tain or license intellectual

4ro4ert, rights in certain circu-stances. Internal de+elo4-ent allows the- to -aintain technical

control o+er the design and de+elo4-ent o6 their 4roducts. The, ha+e a nu- er o6 *.S. and

6oreign 4atents and 4ending a44lications that relate to +arious as4ects o6 their 4roducts and

technolog,. "oreo+er8 while the, elie+e that their 4atents ha+e +alue8 no single 4atent is

essential to us or to an, o6 their 4rinci4al usiness seg-ents. Research and de+elo4-ent

e!4enditures were #.# illion8 #.$ illion and 5.9 illion in 6iscal $&1#8 $&15 and $&1/8

res4ecti+el,8 or 15 o6 total re+enues in 6iscal $&1# and 1/ o6 total re+enues in each o6 6iscal


45/60

ORACLE STRATEGIC PLAN 5#

$&15 and $&1/. Ra4id technological ad+ances in hardware and so6tware de+elo4-ent8 e+ol+ing

standards in co-4uter hardware and so6tware technolog,8 changing custo-er needs and 6re uent

new 4roduct introductions and enhance-ents characteri e the so6tware and cloud and hardware

-ar7ets in which the, co-4ete. The, 4lan to continue to dedicate a signi6icant a-ount o6

resources to research and de+elo4-ent e66orts to -aintain and i-4ro+e their current 4roduct and

ser+ices o66erings.

Purc"asing9 The co-4an, store re+enues ca-e 6ro- so6tware8 hardware s,ste-s8 and

ser+ices. "oreo+er8 Oracle 4urchases the -a:orit, o6 their hardware directl, 6ro- -anu6acturer

and third 4art, -anu6acturer. "oreo+er8 the, de4end on su44liers to design8 de+elo48-anu6acture and deli+er on a ti-el, asis the necessar, technologies and co-4onents 6or their

hardware 4roducts8 and there are so-e technologies and co-4onents that can onl, e 4urchased

6ro- a single +endor due to 4rice8 ualit,8 technolog,8 a+aila ilit, or other usiness constraints.

As a result8 their su44l, chain o4erations could e disru4ted or negati+el, i-4acted , natural

disasters8 4olitical unrest8 4ort sto44ages or other trans4ortation disru4tions or slowdowns or

other 6actors a66ecting the countries or regions where these single source co-4onent +endors are

located or where the 4roducts are eing shi44ed.

:uman *esources9 As o6 second uarter o6 $&1#8 Oracle e-4lo,ed a44ro!i-atel,

1/$8&&& 6ull0ti-e e-4lo,ees. O6 these e-4lo,ees8 a44ro!i-atel, 598&&& were e-4lo,ed in the

*nited States and a44ro!i-atel,


46/60


o6 their e!ecuti+e tea- and other 7e, e-4lo,ees and the hiring o6 new uali6ied e-4lo,ees. In

the technolog, industr,8 there is su stantial and continuous co-4etition 6or highl, s7illed

usiness8 4roduct de+elo4-ent8 technical and other 4ersonnel. In addition8 ac uisitions could

cause the- to lose 7e, 4ersonnel o6 the ac uired co-4anies or at Oracle.

"oreo+er8 the, continuall, 6ocus on i-4ro+ing their cost structure , hiring 4ersonnel in

countries where ad+anced technical e!4ertise and other e!4ertise are a+aila le at lower costs.

Howe+er8 the, -a, also e!4erience increased co-4etition 6or e-4lo,ees in these countries as

the trend toward glo ali ation continues which -a, a66ect their e-4lo,ee retention e66orts and

increase their e!4enses in an e66ort to o66er a co-4etiti+e co-4ensation 4rogra-. Additionall,8 ecause the, e!4ense all stoc70 ased co-4ensation8 the, ha+e changed and -a, in the 6uture

change their stoc70 ased and other co-4ensation 4ractices. "oreo+er8 the, continue to e+aluate

their co-4ensation 4ractices and other changes the, consider 6ro- ti-e to ti-e include a

reduction in the nu- er o6 e-4lo,ees granted e uit, awards8 a reduction in the nu- er o6 stoc7

o4tions8 all o6 which -a, ha+e an i-4act on their a ilit, to retain e-4lo,ees and also i-4act the

a-ount o6 stoc70 ased co-4ensation e!4ense that the, record.

Information ystems9 As an e!4ert in the usiness so6tware8 Oracle has 4ut their

e!4ertise to use in its co-4an, sa+ing cost in the o4erating e!4ense , coordinating and

strea-lining all its usiness 4rocesses. The, i-4le-ent si-4li6,8 standardi e8 and auto-ate 6ro-

their core usiness to their -one, sa+ing strateg,. "oreo+er8 too create ser+ices to its custo-er

Oracle continuall, 4rogresses to create co-4etiti+e ad+antage , 4ro+iding its custo-ers with

higher return on in+est-ent. The lower their total cost o6 its so6tware , i-4ro+ing integration8

decreasing installation ti-es8 lowering ad-inistration costs8 and i-4ro+ing the ease o6 use.

Analysis of +unctional trategies


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ORACLE STRATEGIC PLAN 5%

(unctional strategies in e+er, organi ation are a66ecting co-4an, 4er6or-ance such as

4ro6ita ilit,8 -ar7et share8 hu-an talent8 6inancial health8 cost e66icienc,8 4roduct ualit,8

inno+ation8 and social res4onsi ilit,. This e-4hasi es on how the 6unctional strategies align with

the current condition o6 the co-4an,. (ro- each seg-ents8 it can e said that Oracle 6unctional

strategies ha+e 4er6or-ed well. Although the, still need to enhance their sales and -ar7eting as

well as their o4erations and -anu6acturing s,ste-s.

Organization’s Improvement Initiatives

Improvement Initiatives

Oracle i-4le-ents a Lean "anu6acturing solution and Agile "anu6acturing 4rocessesthat allows it increase its -ar7et4lace e66icienc, 4ro+iding custo-ers with uanti6ia le return on

in+est-ent and co-4etiti+e ad+antage FOracle8 $& . Howe+er8 Oracle e+aluates their

disclosure controls and 4rocedures under the su4er+ision and with the 4artici4ation o6 their

disclosure co--ittee and their -anage-ent.

Oracle is uilding industr, strength around 7e, +erticals such as industrial -anu6acturing

in the Lean -anu6acturing area. Tea-s are wor7ing together to de+elo4 a cohesi+e worldwide

-anu6acturing strateg,. ?ith this strateg,8 Oracle ho4es to

• 7evelop a customer centric process t"at (ill = 4ro+ide rand consistenc, and

channel o4ti-i ation ena le co-4rehensi+e order ca4ture and 6ul6ill-ent and

i-4ro+e re+enue and -argins through increased a6ter-ar7et su44ort.• ync"ronize its demand driven supply c"ain = so as to e66ecti+el, -anage de-and

in a -ulti0tiered distri ution en+iron-ent glo all, o4ti-i e -aterial and 4roduction

resources and reduce logistics cost while i-4ro+ing on ti-e deli+er,.


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ORACLE STRATEGIC PLAN 5<

• Ac"ieve manufacturing excellence; , ena ling 4a4erless 4roduction to reduce

costs and i-4ro+e ualit, su44ort 6le!i le in+entor, re4lenish-ent and colla oration

re uire-ents su44ort lean8 agile -anu6acturing 4rocesses.

Alignment of Improvement Initiatives into trategic Management

The e+aluation o6 their disclosure controls included a re+iew o6 their o :ecti+es and

design8 as well as their i-4le-entation o6 the controls and the e66ect o6 their annual re4ort

re uired , SEC. The e+aluation is a uarterl, asis there6ore the conclusions o6 -anage-ent

regarding the e66ecti+eness o6 the disclosure controls can e re4orted in their 4eriodic re4orts.

These e+aluation acti+ities are to -onitor their disclosure controls and to -odi6, the- as

necessar, and the, concluded that the -ethod o6 their controls and 4rocedures were e66ecti+e

FOracle8 $&1# .

Comparison of Improvement Initiatives

Oracle2s co-4etitors8 which are "icroso6t Cor4oration F"icroso6t 8 International

Business "achines Cor4oration FIB" 8 and Hewlett0Pac7ard Co-4an, FHP 8 use di66erent

i-4ro+e-ent initiati+es -ethods. "icroso6t uses "icroso6t O4erations (ra-ewor7 F"O( as its

i-4ro+e-ent initiati+es F"icroso6t8 $&1& . "oreo+er8 IB" i-4le-ents lean and IB" usiness

4rocess -anager FIB" BP" to 4ro+ide an introduction to the 7e, 4rinci4les and ene6its o6 the

7e, usiness +alue with li-ited e66ort FSchu-e8 $&1/ . Also8 HP uses the ser+ices e!cellence

re+iew FSER which is a si! sig-a ualit, initiati+e to e+aluate co-4le! ser+er and storage

solutions o :ecti+el,8 either during or a6ter their i-4le-entation FHewlett0Pac7ard8 $&1# .

Conclusion and +uture of Organization


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*ecommendations;

1. Oracle should continue to co-e u4 with inno+ati+e incor4orated 4roduct8 instead o6

co-4elling custo-er to u4grade to se+eral +ersions this occurs due to new ac uisitions .

As the ti-e to inno+ation increases8 the -ore is the usiness loss F Ches rough8 H. F$&&%.

Had Oracle 6ollowed e+er, so o6ten8 SAP -ar7et wouldn2t ha+e esta lished.

$. To Oracle2s credit8 their engineering 4rowess and de4th o6 e!4ertise is world class8 ,et

their area o6 wea7ness is agilit, and s4eed o6 res4onse to the -ar7et. The co-4an, e!ists

in an age o6 ris7 and uncertaint, hence glo ali ation8 new technologies and greater

trans4arenc, ha+e co- ined to o+erturn the usiness en+iron-ent F Barsou!8 @.8 )

Bottger8 P. $&&3 . In this era8 -ar7et leadershi4 is e+en -ore ris7,8 with co-4anies

6alling o6 the to4 three ran7ings increasing to 15 in $&&< FRee+es8 ".8 ) ;ei-ler8 ".

$&1/ . In order to re-ain rele+ant and co-4etiti+e8 Oracle needs to learn to tune its

tentacles to 4ointers o6 change 6ro- the e!ternal en+iron-ent8 deci4her the-8 and ra4idl,

act to i-4ro+e or rein+ent its usiness -odel and e+en re6or- the in6or-ation landsca4eo6 its industr,.

/. (ocus on uilding technical strength to ena le eas, inno+ation FAh-ed8 P. . 199< . (or

decades8 Oracle had een the leader o6 the enter4rise so6tware 4roduction industr,8

4ro+iding its custo-ers with so6tware and ser+ices that 7ee4s the- u40to0date and

accurate usiness in6or-atics at the lowest cost. This has -ade Oracle a leading 4artner

to nu-erous co-4anies and -ultinationals in the world. The co-4an, should continue to

uild on this strength8 and it turn it will continue to generate -ore usiness.

5. Le+erage strength 6ro- relational data ase -anage-ent area.


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ORACLE STRATEGIC PLAN #1

industries that u4 to #& o6 co-4anies2 re+enues are conse uent 6ro- new 4roducts8 with

these co-4anies s4ending 1& 01# o6 their 4ro6it on 6uelling inno+ation.

Figure 1'. The e66ects o6 research and de+elo4-ent on growth and 4ro6ita ilit,in co-4an,.


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ORACLE STRATEGIC PLAN #$

Figure 11. Oracle2s in+est-ent on research and de+elo4-ent.

Oracle needs to increase its s4ending on R);8 in order 6or it to re-ain co-4etiti+e

with "icroso6t that in+est a lot o6 resources into Research and de+elo4-ent.

Figure 12. Industr, o+er+iew on research and de+elo4-ent in+est-ent.


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ORACLE STRATEGIC PLAN #/

trac7 record. On the other hand8 "ar7 Hurd :oined the co-4an, in $&1&8 ringing -ore than /&

,ears o6 technolog, industr, leadershi48 co-4uter hardware e!4ertise and e!ecuti+e

-anage-ent e!4erience. "ar7 will o+ersee the cor4orate direction and strateg, 6or Oracle2s

glo al o4erations8 including sales8 su44ort8 consulting8 -ar7eting8 and alliances and channels. He

6ocuses on strateg,8 leadershi48 inno+ation8 and custo-ers.

Together with Sa6ra8 the, intend to guide the co-4an, towards cost sa+ing techni ues

and etter inno+ation8 which will 4ushed , a gradual increase in its udget 6or research and

de+elo4-ent. This is i-4ortant8 i6 it wants to continue eing an industr, leader in the 6uture

ecause o6 increasing co-4etition 6ro- co-4anies such as IB" and "icroso6t.Conclusion

A signi6icant trend in the so6tware and co-4uting industries has een a shi6t towards

what is 7nown as cloud co-4uting8 an in6rastructure that is ased on centrali ed shared ser+ers.

*nder this -odel e+er,thing that a co-4an, needs in ter-s o6 co-4uting will e located and

-aintained o660site rather than in house. (urther-ore8 the sa-e co-4an, that -anages the

ser+ers and 4h,sical e ui4-ent will also license a 4lat6or- and so6tware to a 6ir-8 which can

then e accessed o+er the internet as an on de-and ser+ice. *nder this -odel usinesses are a le

to sa+e -one, on +arious costs including so6tware ser+ice8 which is a signi6icant source o6

re+enue 6or Oracle. Cloud co-4uting also o66ers -ore e66icient 4rocessing8 storage8 and

andwidth usage , centrali ing the e ui4-ent and o4ti-i ing the so6tware. There are a 6ew

4otential downsides to the cloud co-4uting -odel8 including concerns o+er the securit, o6

centrali ed co-4uting as well as concerns o+er the current li-itations o6 andwidth. A shi6t

towards cloud co-4uting would e a di66icult one 6or co-4anies li7e Oracle and "icroso6t8 who

4roduce and distri ute so6tware to their clients in a traditional sense. The costs o6 de+elo4ing and


54/60


-anaging a cloud s,ste- are signi6icant and 4ro+ide arriers to entr,. Co-4anies li7e A-a on8

Sales6orce.co-8 Google8 Net Suite and Right Now Technologies are e!a-4les o6 those which

ha+e alread, egun o66ering 4roducts ased on cloud co-4uting technolog,. In order to hold its

4osition as a 4la,er in a changing industr, Oracle will need to de+elo4 4roducts to suit

consu-ers> needs as the en+iron-ent changes.

(ro- our anal,sis8 we strongl, elie+e that the continuous ac uisitions o6 co-4anies

such as Sei el8 BEA8 and -ost recentl, Big"achines8 Oracle 6or the near ter- will 7ee4

strengthening its 4osition as a one0sto4 sho4 6or enter4rise solutions using the sa-e ac uire0

integrate0re4eat strateg, it has used 6or -an, ,ears now. This co-4an, is a :uggernaut8 so don>te!4ect it to 6all +icti- to an, -a:or disru4tions.

*eferences

Ah-ed8 P. . F199< . Culture and cli-ate 6or inno+ation. (uropean )ournal of inno*ation

management 8 1F1 8 /&05/.

Barsou!8 @.8 ) Bottger8 P. F$&&3 . Can we reall, -aster uncertaint,Q. Financial +imes .


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ORACLE STRATEGIC PLAN ##

Ches rough8 H. F$&&% . Business -odel inno+ation= it>s not :ust a out technolog,

an,-ore. Strategy , leaders-ip 83" F3 8 1$01%.

Hanna8 S. F$&158 @une 1$ . To4 1&= Lean -anu6acturing co-4anies in the world. lo/al

0anufacturing . Retrie+ed 6ro-= htt4=DDwww.-anu6acturingglo al.co-Dto41&D/


56/60


Regnell8 B.8 ) Brin77e-4er8 S. F$& . "ar7et0dri+en re uire-ents engineering 6or so6tware

4roducts. In (ngineering and managing software re7uirements F44. $


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ORACLE STRATEGIC PLAN #%

APPEN;ICES


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ORACLE STRATEGIC PLAN #<

APPEN;I AOracle Inco-e State-ent

Oracle Income tatement

+iscal year ends in May9 5 7 in millions except pers"are data9 01%%,12 01%0,12 01%/,12 01%


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!era"ing #n$o e USD Mil 14,684 26,764 4,479 18,777 423 14,759 27,759 4,331 17,790 41!era"ing Margin % 39.5 34.4 26.6 18.8 10.4 38.6 32 24.7 19.2 1

&e" #n$o e USD Mil 10,925 21,863 3,326 16,483 290 10,955 22,074 3,280 12,022 26'arnings (er S)are USD 2.26 2.58 2.78 14.94 0.56 2.38 2.63 2.74 11.9 0.5Divi*en*s USD 0.12 0.89 0.85 3.7 0.48 1.07 1.01 4.25(a+ou" Ra"io % 8.4 44.5 32.8 24.9 15.1 38.3 36.8 26.3S)ares Mil 4,844 8,470 1,195 1,103 513 4,604 8,399 1,197 1,010 50

oo- alue (er S)are USD 9.33 9.21 16.76 18.85 13.77 10.02 10.61 18.03 14.39 13.5!era"ing /as) lo USD Mil 14,224 28,833 3,832 17,485 1,152 14,921 32,231 3,499 16,868 1,28

/a! S!en*ing USD Mil 650 4,257 566 4,140 188 580 5,485 737 4,183 ree /as) lo USD Mil 13,574 24,576 3,266 13,345 963 14,341 26,746 2,762 12,685 1,13ree /as) lo (er S)are USD 2.65 3.24 3.74 11.8 2.1 3.1 2.69 3.29 12.64 2.0or-ing /a!i"al USD Mil 28,820 64,049 1,005 11,196 2,520 33,749 68,621 436 9,822 2,10

Key Performance Indicators ORL MSFT SAP IBM ADOBE ORL MSFT SAP IBM ADOBMargins % o Sales 2013 2013 2013 2013 2014 2014 2014 2014 2014 201Revenue 100 100 100 100 100 100 100 100 100 / GS 19.13 26.01 29.73 51.37 14.46 18.91 31.02 30.02 49.99 1Gross Margin 80.87 73.99 70.27 48.63 85.54 81.09 68.98 69.98 50.01 8SG 22.59 26.24 29.72 23.03 52.79 22.48 23.76 29.59 24.22 52.9R D 13.04 13.37 13.57 6.24 20.38 13.46 13.11 13.27 5.86 20.3

")er 5.74 0.34 0.53 1.94 6.59 0.15 2.45 0.76 !era"ing Margin 39.49 34.38 26.64 18.82 10.42 38.56 31.97 24.66 19.17 9.9

&e" #n" #n$ ")er 2.11 0.37 0.49 0.75 1.64 2.76 0.07 0.14 2.37 ' Margin 37.38 34.75 26.14 19.57 8.78 35.8 32.04 24.8 21.54 8.7(ro i"a ili"+ 2013 2013 2013 2013 2014 2014 2014 2014 2014 2

a Ra"e % 21.39 19.18 24.36 15.58 18.58 20.06 20.65 24.68 21.19 25.7&e" Margin % 29.38 28.08 19.78 16.52 7.15 28.62 25.42 18.68 12.96 6.4

sse" urnover : verage; 0.46 0.59 0.62 0.81 0.4 0.44 0.55 0.54 0.76 0.3Re"urn on sse"s % 13.64 16.58 12.33 13.43 2.85 12.73 14.02 10 9.86 2.5

inan$ial


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ORACLE STRATEGIC PLAN 3&

/urren" Ra"io 3.24 2.71 1.16 1.28 2.65 3.35 2.5 1.05 1.25 1.8Aui$- Ra"io 2.97 2.53 1.06 1.07 2.47 3.12 2.31 0.96 1.02 1

inan$ial

group 2-oracle strategic plan

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