Shulou(Shulou.com)06/03 Report--

Judging from the current public information, Oracle China's layoffs are only the first batch and will continue to follow up. The ultimate goal is to abolish the entire Chinese R & D center, including the current Oracle R & D focus-cloud computing.

So the question is, since Oracle faces challenges around the world, why is China the hardest hit of the layoffs?

We must first understand the global R & D centers of different types of foreign companies. The global R & D centers of foreign companies can be divided into two categories according to their responsibilities. The first category is to serve the local market, including pre-sales, technical support, localization and so on. The survival of these R & D centers depends to a large extent on the performance of the local market. If the performance is good, scale. Instead, it will shrink or even lay off staff. From the point of view of the layoffs, Oracle's China R & D center clearly falls into this category.

In recent years, with the rapid development of cloud computing. Oracle not only faces competition from global cloud computing giants in the Chinese market. It is more in the face of close cooperation with local emerging cloud computing providers.

In 2018, the market size of Chinese enterprise application software reached 41.5 billion yuan, an increase of 13.5% over the same period last year. However, Oracle China's software industry declined in 2017 and 2018. According to the CCID report, in 2018, in the Chinese enterprise application software market, domestic manufacturers such as Yuyou, Chaochao and Kingdee have achieved good results in the competition in the cloud product market, which has brought great pressure to SAP, Oracle, Microsoft and other companies.

TOP10 ranking of major vendors in China's enterprise application software market in 2018

From the perspective of overall market share, Oracle lagged behind the wave of domestic enterprise users and fell to the fourth place in 2018. Last year, Chaochao launched PS Cloud, an open source cloud ERP product, in a joint venture with Odoo, which accelerated the launch of enterprises into the cloud, and received a good response. Chaochao's market share jumped from fourth to third.

Market opportunities and profit margins are constantly shrinking. Therefore, there is no need for Oracle to maintain a large R & D center in China, and layoffs are inevitable.

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