Oracle is an American company that deals with computer technology. The company specializes in software production and marketing but in the recent past, it started producing some hardware. Its headquarters is in Redwood California in the United States of America. The current number of employees is estimated at over 100,000. The growth of this company has been greatly contributed by the number of numerous acquisitions that it has had in the past, most recently the acquisition of the Sun Systems. By the year 2007, Oracle had the third largest software revenue after Microsoft Corporation and IBM. The corporation is best known for its software product the Oracle Database. It is also involved in the building of tools for database development and systems of middle tier software.
The company has been managed by Larry Ellison since its inception until 2004 when Jeffrey Henley took over the management. Larry Ellison is one of the co-founders of the company and was rated as the top paid chief executive in the world during the time of his tenure.
The company’s development
In 1990 the company laid off about 10% of its staff due to a mismatch between cash and revenue. This problem was however not caused by the staff that was laid off but was caused by the Oracle’s upfront marketing strategy which involved consumers being urged to buy the largest possible amount of software at once. This strategy worked but just for a short while. At later times the strategy failed to materialize and Oracle had to take drastic measures in order to ensure its survival in the market. This was an incredible mistake made by Oracle but the company has since learnt from that mistake. Oracle has since registered an upward trend in terms of its production and predictability.
The company faces competition from other software manufacturing companies but this has not had a very big impact in the overall production of the company. The company has organized for a series of acquisitions which has enabled it to expand in terms of production and market share. This is a very strong reason why making investment in such a company is worthwhile. After lagging behind other companies for some time, the company learnt from the mistakes it made and started to register an upward trend in the software market. The expansion of the company over the past few years has enabled the company to become a market leader and improve its revenue thus being a very good source of investment.
ECONOMIC FACTORS AFFECTING ORACLE CORPORATION
The economic factors that affect Oracle Corporation include:
Income: The net income that is received by the company is a challenge as it has a team of staff that should be paid and a series of acquisitions which are on the way. The company is also receiving a low income which is attributed to the fact that some of its products are still new in the market thus making them less popular.
Inflation and Recession: inflation and recession has been a major challenge to the company as very few of their products are being sold. This is because inflation has led to the cost of living going up and leaving the potential consumers with very little revenue to purchase their products. Inflation has also led to the company spending a lot of money to pay the workers since the pay has to match the cost of living.
Exchange rates: the exchange rates which are offered by different countries affect their sales in those countries. The company losses a lot of revenue in the process of exchanging the currencies. The currency conversion sometimes makes them sell their products at a relatively lower price thus registering losses in the process.
Oracle affects the economy in the following ways
Provision of cheap software and hardware – the company has been involved in a marketing campaign that is charged with the responsibility of ensuring that they provide cheap software to the population. In the process they help in improving the economic status of the entire population.
Provision of employment opportunities – the company has about 100,000 employees across the globe. This is a big boost to the economy as those people who could have not been employed get employment and hence a source of income.
Oracle Corporation is the third largest producer of software and it is the company that produces the best database software dubbed the ‘oracle database’ These software have gained a position in the market and big organizations do recommend them for their use. This aspect has led to oracle being trusted and thus enjoying a very large market share. Despite the blunder that the company made in the early 1990s, the company has been able to recover and boost is sales across the globe. Investments in such a stable company with an increasing growth are a very bi plus especially to upcoming investors. I would like to recommend this company as a good source of investment as it has been registering a steady, stable and a rapid growth in the years that it has been in operation.
Work cited list
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5. Gohring, Nancy; Elizabeth Montalbano. "Maintenance Contracts at Heart of Oracle, SAP Dispute". CIO India. 2010