June 2, 2017

Oracle poised to expand its cloud operations via Tencent

Oracle and Tencent’s alliance is set to heat up its competition with SAP and its Chinese partner Alibaba Cloud

Oracle, the world’s largest seller of enterprise software, is set to use its partnership with Tencent to distribute its NetSuite portfolio of online SaaS applications in mainland China, the market for which is projected to reach total sales of up to USD 1.6 billion this year.

Reports say that this initiative, following Oracle’s USD 9.3 billion acquisition of NetSuite last year, is part of the company’s latest investment in the world’s second-largest economy, where it has established operations since 1989,

Chief executive Mark Hurd recently told the South China Morning Post:

We have a development centre in Beijing that does a lot of localisation for our products, and we’ve doubled our sales force in China over the past year. So [with NetSuite now part of Oracle] we plan to continue investments in the country, which is not without a few challenges here and there.

Hurd added that Oracle, which has its own line of cloud products, acquired NetSuite to meet the global enterprise sector’s “huge shift from on-premise [software] to the cloud”.

This trend is an irresistible force that will dominate the whole [information technology] market over the next decade. There may be a 70 to 80 per cent shift from traditional on-premise to cloud.

These moves are expected to put Oracle & Tencent on a collision course with SAP and its partner Alibaba Cloud. SAP, which had a total revenue of USD 24.6 billion last year, has launched its own set of cloud solutions in mainland China through Alibaba Cloud, the country’s largest cloud infrastructure services provider.

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