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Oracle: How much do you know about the $200 billion tech empire? The secret weapon behind the Silicon Valley playboy is revealed!

Sean Hui
Dec 6, 20244 min read

This article was written by Sean Hui, a Management student at the University of Warwick.


Introduction 

You may have heard of the name Oracle because it has always wanted to acquire TikTok or heard of its boss, the 79-year-old Larry Ellison, a famous playboy in the technology industry. But did you know that Oracle is the world’s largest database software company with a market share of more than half the size of the total market. In fact, 97% of the top 100 companies in the world are its customers. However, it does not only sell database software, but it also has a series of cloud services involved in artificial intelligence, blockchain, medical health and other cutting-edge technology fields. So today, we will dive into Oracle’s entrepreneurial and business stories. How did it become a technology giant? 

Oracle was founded by Larry Ellison, Bob Miner and Oates. Together, they founded a company called SDL Software Development Laboratory (later named Oracle) and began to develop database software. However, at that time, they had no money to start a business together. The biggest problem was where the money would come from. Finally, Ellison came up with a bold idea to find venture capitalists, but the problem was who would be willing to invest in a company that didn’t even have a product? At this point, Sequoia Capital saw its potential. When Oracle was founded, Sequoia gave it $2 million in start-up capital. With this money, Oracle officially started its business. Two years after the company was founded, in 1979, SDL’s first commercial product, Oracle Version Two, was officially launched. 


Oracles’ Core Businesses 

So what is Oracle’s core business: database. What is a database? You can imagine it as a super-large electronic filing cabinet. Enterprises can store various important information such as customer information, order records, inventory figures, etc. It doesn't sound that advanced, right? But remember the technology back in the 1970s and 1980s. Personal computers had just been invented but were not very popular. At that time, people recorded some data mainly by handwriting. One physical folder after another took up a lot of space, and it was not convenient to find information. With the popularization of computers, people began to seek more efficient management methods. This is where database management systems come in. In 1983, Oracle launched the industry's first database that supports parallel data processing, which greatly improved the query speed.

In the 1990s, the popularity of the Internet began to rise. Everyone started surfing the Internet and using email. Ellison was keenly aware that the Internet would bring revolutionary changes to the IT industry. He immediately transformed Oracle into an Internet company and proposed a concept called the Network Computer. What exactly is a Network Computer? Ellison believed that in the future, computers would no longer need to install software and store data on the machine but would move all these things to the Internet. Users could use these services by connecting to the Internet through a simple device. This type of network computer has low hardware requirements and some basic functions. It only needs to be able to surf the Internet. It will be cheaper and easier to use than a PC. Isn't this our life now? However, this concept was very advanced at the time. In 1995, Ellison once said in a speech that in the future network computers will be as popular as telephones. People don't need to buy expensive PCs or learn complicated operations. They can enjoy various services just by turning on the computer and connecting to the Internet. It can only be said that Ellison is very forward looking.


Nonetheless is the SaaS sector. In simple terms, SaaS means renting software on the cloud. In the past, in the traditional model, enterprises needed to buy a license and then install and operate it by themselves. In 2015, Oracle launched the Oracle Cloud Platform, providing rich PaaS services such as database, Java, integration, and IoT. In 2016, the second-generation cloud infrastructure Oracle Cloud Infrastructure OCI was also launched to further strengthen its capabilities. In 2018, Oracle launched a set of innovative cloud services and autonomous databases which uses artificial intelligence and machine learning technology to automate and optimize cloud databases and infrastructure, greatly simplifying the complexity of managing traditional databases. In 2022, Oracle has even launched a blockchain platform to help companies easily build and deploy blockchain applications. 


Oracles’ Financial Conditions 

So that’s a brief overlook of the core Oracle businesses, but how has Oracle been performing lately. Opening Oracle's third-quarter 2023 financial report, we can clearly see that it has achieved outstanding results in multiple business areas. The total revenue in the third quarter reached US$13.28 billion, an increase of 7% over the same period last year. Among them, cloud services and authorized support business are its largest source of income. The revenue was US$9.963 billion, an increase of 12% year-on-year, accounting for 75% of the total revenue, fully demonstrating Oracle's strong strength and continued expansion capabilities in the field of cloud computing. In

terms of profitability, Oracle's net profit was US$2.401 billion, an increase of 27% year-on-year, and cash flow was also very strong, with US$12.592 billion, a year-on year increase of 9%. As of the end of February, the balance of cash and cash equivalents and some marketable securities was US$9.904 billion, providing ample financial support for long-term development. 


Conclusion 

Looking to the future, as the wave of digital transformation continues its push towards new applications, enterprises' demand for cloud computing will certainly increase. With artificial intelligence and technological advancements, Oracle will definitely be benefitted from this trend. Oracle can be said to have successfully caught the trend. And as a veteran technology company, it is certainly not easy. 


The views and opinions expressed in this article belong solely to the writer and do not necessarily reflect the views and opinions of the Warwick Economics Summit.

 

References:

Oracle Corporation - 

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SPL Consulting - 

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