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Oracle likely to set up data centre in India: CEO Mark Hurd

Economic Times:  September 22, 2016

New Delhi: Mark Hurd jointly runs $37-billion Oracle Corporation as a CEO along with Safra Catz. The company has had a presence in India for last 25 years and today has about 40,000 employees based in India alone. Hurd joined Oracle five years ago and was made CEO in 2014. Here he talks about the company's India strategy, its acquisition model as well as challenges of running a technology company. Edited excerpts: 

Where does India lie on the map of global expansion for Oracle?

The growth rate in India is impressive. We have witnessed increasing success there and thus done many things to invest. There is a conglomeration of economies in that part of the world, bundled together to be called APAC, Asia Pacific Region. But the reality is there really is no APAC, they are a bunch of different economies that all have unique things. The economy in India is very much driven as a service economy, while China's economy has been very much a manufacturing economy. So, they are very different and if you ask what they have in common — the answer to it is — not all that much. We look at India as a very attractive market. We have had increasing levels of awareness about India, meaning that we have invested in events. Safra Catz, the Oracle joint CEO made a trip to India recently, and she came back so excited. That morning I remember she came to my office and was telling me the things we need to do in India and we are on that path.

What excites you about India?

The dynamics that excite us about any market is the scale of the market size. Yes, economy is important for us, and India's economy is only growing. India is on the path of modernisation of its infrastructure, and this usually has an effect on IT. So, as you get any type of scaled economy that is growing, that has modernisation opportunities and productivity opportunities, it becomes a very attractive market for a company such as Oracle. If you can supplement that with an educated country where there is availability of talent such as that is in India, it becomes very exciting.

The Prime Minister of India plans to take India on the digital route. Where does Oracle fit into this plan?

Indian Prime Minister Narendra Modi has been clear about digitisation, which we think ties in directly to the movement of cloud computing. We look at this as an opportunity. And it's there because of usage of old applications running on old infrastructure (common across the world). The cost of keeping that infrastructure and applications running is big. The opportunity to now move that to where it is done on somebody else's tab (expense) and still the innovation level goes up is what is exciting about the movement to cloud. Cloud is not just infrastructure as many people and at times media seems to reference. Cloud is applications, cloud is platform, cloud is infrastructure — all put together. And if you get a chance, as you move in to the cloud world, to get to an entire next generation of capabilities — it lends a big opportunity.

One of the challenges for a lot of Indian companies who want to adopt cloud computing, especially in the banking sector, is the regulation which requires data centres to be in the sovereign nation. Will Oracle start data centres in India to meet this requirement?

I think it is highly likely we will put a data centre in India. There are indeed compliance issues, regulatory issues which do not allow data to migrate out of the country or outside its firewall. But we have capability now, and it has been purchased by some customers in India, where we bring cloud to install on customer's premises. It would be like a subscription where customers need not buy but merely subscribe to our solution. Once done, we will install, manage, patch it and even secure it. So there are multiple ways, we will not just offer the solution of a public cloud in a data centre in India. We can actually take our cloud and put it in a data centre already present at the customers end.

Technology keeps changing, and disruption has caused many failures. Is there a plan B, if there is a cloud burst?

No, I don't think so. If we were to see a cloud burst — using your word, not mine — we would have seen it by now. We are the fastest growing cloud company in the world now. And let's look at the numbers around cloud companies, the big ones are probably at around $30 billion, total market is around $35 to $40 billion. Cloud business is growing at around 45% or probably faster. All of IT more or less is flattish and do I think that growth is about to slow down? No. It's opposite for us. Our growth rate is only getting higher. We have had seven consecutive quarters of a higher growth rate against a bigger base.

As CEOs begin to understand that I can spend less to get more, they will drive the technical community to cloud faster.

Oracle in the last decade has been buying a lot of companies for scale and technology. It is never easy to integrate companies and create a mega corp. How do you manage this transition and bring Oracle culture to all of them?

What Safra and I do on acquisitions is based on the following filters we use: a) We look for companies that fit strategically b) We try to do things that make financial sense, c) But we also try to buy companies that we can run. It does not make sense for us to buy something which is very expensive, fits in strategically, but we cannot run it. Not a good idea.

We don't (believe in) keeping places independent, do it your way, as if it's a democracy... No. It's not a democracy, we have a certain way we do these things, certain processes that we follow and we roll them right away.

We have two communities which we typically try to nurture within any acquired asset. It is the development community and the sales community. Those are the two organisational parts of any acquired asset that we are very interested in.

We do not have a common way we force on every deal, but we do have a Playbook. We make a judgement with each acquisition that we have made and then we go and execute it.

Oracle is run by two CEOs since last two years and that's a big test for both individuals. It has not been quite a successful model for many tech companies in the past who tried it, what does it take to run it smooth?

It isn't just Safra and me, there is also Larry Ellison (promoter and CTO at Oracle). We all talk a lot. And I tell you, this is the third company I have been CEO of and let me tell you these jobs are hard. We get guys like you that show up and slip in questions like "Hey if you are so smart why don't you do this or that..." The problem is that any of these big entities require lots of hands. If you can get experienced, capable hands, it is just a huge blessing. So I believe that the more people you can get to help you in these jobs, the better.

In the case of Larry, Safra and I, we do different things and we come from different backgrounds. Yet, we play interchangeable parts at the same time and it's exciting. We have been able to take the company through this transition which is fantastic.

At the core of it, you have to have people to get along. You have to have respect, you have to be willing to communicate and to share. If you don't have those values, it is always going to be hard. And that is not just unique to our situation but any executive team in any organisation.

Everyone needs to have a vision for what the size of the prize is if you want them to execute on the strategy.

(The writer was in San Francisco to attend the Oracle Open World at the invitation of the company)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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