Courting China the Oracle way<\/p>\n
Lela E. Madjiah, The Jakarta Post, Beijing<\/p>\n
China is the envy of many fellow Asian countries for all the
\nright reasons. Its size is simply staggering and with a
\npopulation of over 1.2 billion, it is a market no one can ignore.<\/p>\n
It is small wonder that businesses are either opening or
\nredirecting their investments to China, all clamoring for a slice
\nof the huge market.<\/p>\n
Oracle Corp., the world's largest enterprise software company,
\nhas taken extraordinary steps to woo China into its fold. It has,
\nfor example, created a special business and technology forum,
\nOracle World, which it brought to Beijing from June 11 to 14,
\nunderscoring the company's 11 years of direct operations in
\nChina. It has also made a special exception to China by having
\nits logo written in Chinese to emphasize the name it has been
\nknown in China, Jia Gu Wen.<\/p>\n
Indeed, China, with 22 million Internet users recorded in
\n2001, is a lucrative and interesting market for the software
\ngiant. Currently, China is Oracle's third largest market in the
\nAsia-Pacific region after Japan and South Korea.<\/p>\n
"China is unique because it doesn't have a technology legacy.
\nIt goes straight to the Internet, Linux, wireless. China has
\nreally leapfrogged," CEO Larry Ellison said in his Oracle World
\nBeijing opening remarks on June 12.<\/p>\n
The U.S., on the other hand, is in the third, or maybe fourth,
\ncomputer generation and it's harder to persuade U.S. customers to
\nmove to Oracle than selling to an unexplored market like China,
\naccording to Ellison.<\/p>\n
Oracle's new focus on China has created jealousy among other
\nAsian countries, India in particular. Indian journalists present
\nat the conference repeatedly "demanded" Oracle's confirmation of
\nits commitment to the Indian market.<\/p>\n
"When are you coming to India?" asked one journalist.<\/p>\n
Another demanded that Oracle hold a similar event in India,
\nsaying, "You said China and India are two jewels in a crown, yet
\nyou have never been to India".<\/p>\n
India has every reason to be weary of China's growing
\ninfluence and appeal among investors in computer and software
\nbusinesses. It has nine computer companies producing 30 brands,
\n61 companies producing 278 different computer parts; five
\ncompanies producing six notebook and palm computer products and
\n13 software companies producing 32 software products. China has
\nofficially projected it will achieve US$1.5 billion in software
\nexports in 2005. The figures are a far cry from India's $23
\nbillion projection for the same year. Chinese exports between
\nApril 2001 and March 2002 stood between $400 million and $600
\nmillion, while Indian exports for the same period were $7.8
\nbillion, Sunil Mehta, vice president of the National Association
\nof Software and Services Companies (NASSCOM) was quoted as saying
\nin an April 25, 2002 Wired News article.<\/p>\n
However, despite the huge gap, China poses a threat to India,
\nthanks to its skilled engineers and cheap labor. In fact, cheap
\nlabor is one of the reasons behind Oracle's renewed commitment to
\nChina.<\/p>\n
Ellison stressed however that while cheap labor was key to a
\ncost-effective business, Oracle took a balanced approach to
\nbuilding and selling.<\/p>\n
"We don't just want to sell, we also want to build. We don't
\nwant to have an American company in China. It has to be a Chinese
\ncompany run by Chinese," he added.<\/p>\n
"Oracle in China is a local company. Ninety-five percent of
\nour employees are local," added Derek Williams, executive vice
\npresident of the Asia Pacific Division.<\/p>\n
Meanwhile, 70 percent of China revenues come from sales to
\nChinese companies, while 91 percent of Oracle's business in China
\nis done through local partners. Oracle has 150 customers in China
\ncurrently using its E-Business Suite, or 20 percent of the E-
\nBusiness Suite market. Currently, there are 1,600 customers who
\nlive on Oracle E-Business 11i.<\/p>\n
The number of the company's local employees is also quite
\nimpressive. It has 300 local employees who manage operations,
\nsales and support. There are another 100 workers at the Oracle
\nChina Development Center in Shenzhen, which began operations on
\nJune 1, 2002. The company is planning another center in Beijing
\nnext year. The Beijing center will focus on e-government while
\nthe Shenzhen site concentrates on commercial services.<\/p>\n
Since localization of content and partnership are the
\ncompany's focus in China, Oracle has allocated $500,000 for this
\nyear's certification training to help broaden the adoption of
\nOracle technology in China, according to John L. Hall, senior
\nvice president of Oracle University.<\/p>\n
All Oracle partners must be certified and certification can be
\nobtained through the Oracle Certification Program that offers
\nthree levels of certification, namely Oracle Certified Associate
\n(OCA), Oracle Certified Professional (OCP) and Oracle Certified
\nMaster (OCM). To this end, Oracle University serves as a global
\ntraining resource for Oracle customers, partners and employees
\nwho use Oracle products. The university is the largest software
\ntraining business in the world, with 600,000 students per year,
\nincluding around 10,000 in China. There are now over 110,000
\ncertified professionals worldwide.<\/p>\n
The allocation of the huge training fund is consistent with
\nthe company's recognition of the strategic importance of being a
\nfirst in a "virgin" market rather than trying to win over
\ncustomers who are already brand conscious. By giving China
\nspecial treatment, it can ensure a future market that is Oracle
\nliterate. What better way to win a market than to educate it in
\nthe way one runs one's business?<\/p>",
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