Oracle President Mark Hurd, speaking to Chinese media in April, promised increased investments in the Chinese market, dismissed IBM's recently launched expert integrated system, and explained why Oracle's strategies are difficult for rivals to imitate.
In an April 19th interview at the company's Redwood City, CA headquarters, Hurd said Oracle's China investments will increase in step with the Chinese economy's growth and Chinese companies' increased investments in IT techniques.
The following are excerpts from his interview.
Q1: Over the recent years, Oracle has spent more than $40 billion in acquiring so many companies. How to ensure the success of the acquisition strategy?
Hurd: Acquisition is an important complement to our existing R & D and product system. It is an Oracle strategy that can hardly be duplicated by other producers. We have a global framework of internal integration and can rapidly integrate the products of the acquired enterprises with Oracle products, and thus release huge amounts of resources.
Q2: What's the biggest challenge for companies in constructing their IT systems?
Hurd: The IT equipment that many companies own now were produced 20 years ago. Both the application system and infrastructure are very old. The companies have to spend 80% of their IT budget in maintaining the old system, leaving only the remaining 20% for innovative IT technology and products. So far as I know, the IT budget for a big bank is as much as $13 billion, that's totally unacceptable. Companies are in urgent need for IT enterprises to offer them an integrated hardware/software system, to simplify their sophisticated IT system.
Q3: What's Oracle's development strategy in the Chinese market?
Hurd: Oracle China is growing rapidly. We have more than 5,000 staffers in China and we have put a lot of resources and energy in terms of localization.
China will likely become the world's largest economy in the future. IT investment of Chinese enterprises will continue to increase as these companies go global and become international. Oracle will further increase investments in China. We have long-term planning in the Chinese market, not limited to hardware products, but overall planning that includes software, hardware and services.
Q4: Judging from Oracle's current business layout, Oracle's services and consulting are relatively weaker compared with its hardware/software business. Are you satisfied with the current services and consulting of Oracle? What's the future planning in this regard?
Hurd: Oracle's service is made up of two parts: One is for follow-up services and operations of Oracle products. I am satisfied with this part of service. It's directly related to our products.
The other part is consulting services. Oracle has now about 280,000 consulting service personnel globally. Among them, 20,000 are Oracle-certified professionals, and the remaining 260,000 are from our partners. Such a proportion is attained purposefully, to make sure we have a much healthier ecosystem. A larger number of consulting services are provided by our partners to the customers.
Q5: Recently, IBM has just launched expert integrated systems-PureSystem. What's your comment on this product?
Hurd: So far, I only saw this thing in the newspaper. In my opinion, it's just server + storage + a series of low-end platforms for integration and superposition, and it is even not a real integrated hardware/software system. It is essentially different from our integrated system. Oracle launched an integrated hardware and software strategy which became the industry trend; other vendors try to imitate but can't.
Q6: After acquiring Sun, how will Oracle provide continuing supports for Sun's products?
Hurd: We have been increasing our support for Sun's business. We have launched the latest edition of UltraSPARC T4, which is 4.5 times faster than the previous edition. And T5 will be 2.5 times faster than the current T4. Besides, Oracle Solaris 11 provides specially cloud computing service. We have well integrated the technical advantages of both Oracle and Sun.
Q7: From the latest business report, we learn that Sun server's marketing share is declining. How did that happen?
Hurd: If you look at the market share of Sun's server independently, it may be declining, but if you look at the overall development of Sun's server as it integrates into Oracle products, the market share is climbing. A case in point is the integrated system. And as far as I know, even the market share of Sun's server is actually growing.
Q8: Can Oracle's existing products be fully adapted to the development in the age of cloud computing?
Hurd: In SaaS business alone, the income has more than one billion dollars now, excluding PaaS and IaaS.
And as for the customers, they can choose to combine the existing software products with Oracle cloud computing products . We have flexible tactics in this aspect.
We are not just ready to access the cloud market; we will lead the cloud computing industry development. Because we are the only vendor that can provide the overall cloud services to the customers, it will be our edge in the field of cloud computing in the future.