A smart CEO understands the inherent value of goal setting in steering a growing business in the right direction. Mark Hurd, president of the $35-billion Silicon Valley technology giant Oracle is known for his operational excellence and is probably one of the best corporate managers in America today. A brilliant operator who is obsessed with numbers and execution, Mark has reshaped Oracle?s business and infused the company with a business discipline that has boosted profits and made Wall Street happier. For instance, Europe?s economy may be melting down, but Oracle is experiencing impressive growth rates in each of its product segments. ?Emerging markets in Asia, such as India and China are extremely attractive for us too,? says Mark, who was earlier the President & CEO of Hewlett-Packard. With efficiency as his mantra, Mark now aims to promote growth, relying on emerging markets like China and India, hardware sales and a new cloud-computing service to broaden use of its products. In a wide-ranging interview with Sudhir Chowdhary in San Francisco, he talks about the company?s recent initiatives to demonstrate better value and innovation in products and services, and plans to intensify business operations in Asian countries. Excerpts:
The global economic conditions look challenging yet again. What is the thinking at the Oracle management level to demonstrate better value, efficiency and innovation in products and services?
We are doing multiple things at the same time. We will be best-of-breed with every layer of the architecture?silicon level, the hardware level and through the operating system (OS), database, middleware, horizontal apps and vertical apps layers. Our objective is to line up from engineering, to sales to the best-of-breed of each one of those capabilities, to have a high level of enterprise fit in the heterogeneous environments, to be open at every time.
In addition to that, we vertically integrate the piece parts that manifest itself in enterprise solutions like Exadata, Exalogic and now Exalytics. These are examples of engineered systems that we think deliver extreme performance either total cost of ownership (TCO) based or in terms of just lower pricing or better performance. And we want to deliver that to our customers through any mechanism that they themselves choose?public cloud, private cloud, hybrid cloud or onsite.
We spent $4.3 billion on R&D last year and we?ll spend slightly more than that this year and that?s what we?re doing. We have more than $32 billion in cash that we don?t feel we have to spend. But you know we obviously have the needs to acquire if we thought that appropriate and we?re trying to grow our sales force right now. At the same time, we are trying to deepen relationships with our customers. So expect more relationships where we can align our portfolios to our customers? needs.
What is the strategic importance of Asia which has emerging markets like India and China?
I think they are extremely attractive for us. I have been in companies that have enjoyed incredible growth in markets like which you have described. I think when you look at the BRIC countries as a whole?Brazil and Russia, India and China?they have become a growing part of the GDP; when you look at the history or the future of the next 10 to 15 years, the influence of those countries on worldwide economies is huge. Almost all the growth in worldwide economy in the next 20 years will take place in those emerging 10-12 economies. So these markets are very important for us now.
At the same time, we believe that we have got mature opportunities in mature countries. For example, the growth in Q1 in Europe was frankly outstanding. Most of that came from mature countries, but personally, I am a big believer in the opportunities in India, and a big believer in the opportunities in China, Brazil and all our economies that have significant scale for us to work best.
Oracle has been focusing on engineered systems combining hardware and software. Would you continue to build and provide support for standalone hardware and software to customers? How are customers responding to this new way of dealing with one vendor?
Of course, we will support both. As I mentioned earlier, strategically we are very focused on providing best-of-breed at everywhere in the architecture in addition to providing these engineered systems.
I think the best description of them is to look at numbers. The adoption rate of our database appliance Exadata is significant. It?s the iPad of the enterprise. And when you just look at that success, add to it the fact that Exalogic, our combined hardware and software offering, has got off to a steeper curve in terms of adoption than Exadata, I think it?s been fantastic. We are both the evangelists for the capabilities in engineered systems in addition to being the providers of these systems. And I think as you start to begin to see these tipping points in terms of scale, you are going to see them more.
What can enterprise customers expect from Oracle in the next 6-12 months?
You are going to see us innovate the applications layer like what I have described with Fusion apps around human resources (HR) and around customer relationship management (CRM). You are going to see more modules of Fusion, getting more to the time Fusion is mature, not ripped in the place. You can have modular
Fusion. As you choose to add it, you are going to see more engineered systems. You are going to see more innovation in industry verticals. But this is really all tiered.
There is the Oracle database appliance from us, super clusters from us, you will see point releases of almost all of our industry products during this time frame. So, I think during the 34 year history of Oracle, this will be the biggest year of delivering technology in history. I mentioned to you what we are doing with the sales force?in terms of scaling it, specialising it and deepening the relationships. All this stuff is going to keep us busy for the next year.
Do you feel there will be significant takers among Asian enterprises for your offerings?
Yes definitely. You have to understand that all our investments in Asia are significant. Our growth in Asia has been significant and we are putting more resources in the region. Some of our key accounts that we are pushing into these programmes that I have described with sales force are in Asia. I and my colleague Judith Sim (chief marketing officer) were in China little while back, and we are going to go back again. It?s the same thing with India?the opportunities for us to get Oracle aggressively integrated into these growing economies makes it a big opportunity.