More On Oracle: Cloud, Blockchain, and Controversies

In today’s class, I gave a very brief presentation on Oracle’s history and its fairly new Generation 2 Cloud. However, as such a computer technology giant, there are a lot more to mention about their cloud business group, other fields of operations, and the controversies in which the company has been involved.

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Note that this is before the launch of Generation 2 Cloud. I used this chart mainly to show the challenges Oracle was facing.

First of all, all the cool concepts of the Generation 2 Cloud aside, Oracle has been facing some serious challenges from its competitors, especially from Amazon Web Services, in the cloud market. AWS has surpassed Oracle long ago in IaaS (Infrastructure as a Service) and Paas (Platform as a Service) by creating the Aurora (relational database), Redshift (database warehouse), and DynamoDB (key-value database) even before AWS the company itself even launched. Having been as an Oracle customer itself for many years, AWS understands the problems that many businesses face while using the Oracle database, and they created their own solutions to those difficulties. Now surpassed Microsoft and IBM, AWS has become the leader in the cloud business in many fields. Although being a huge corporation made it hard for the company to adjust to changes and disruptions, Oracle didn’t give up. Being a giant company also has its advantages. With a gross profit of 31.75 billion and a market cap of 183.82 billion, Oracle was able to pull off something like the Generation 2 Cloud, making their effort to solve the problems they have had in competition with other cloud service companies. Other than the reduced cost and significantly better performance that I mentioned in my presentation, there is also another important feature of the Generation 2 Cloud: the private encryption. With this new feature, customers won’t be able to access to any control code or that of other businesses, and Oracle doesn’t have any access to any of its customer’s data like AWS does. Therefore, it is safe to predict that more businesses would like to reconsider their public cloud option before AWS and other companies follow this path and adjust their strategies.

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In accordance with the theme of enhancement on security and privacy, Oracle just announced its expansion on the adoption of enterprise blockchain platform worldwide. In its press release, Oracle acknowledged their customers’ struggle to integrate blockchain technologies and applications into their existing ecosystems. By using Oracle’s enterprise-grade blockchain platform, businesses will be able to strengthen trust and bring more value to their brands and industries. Oracle named a list of companies which has deployed this platform which includes China Distance Education Holdings Limited, supply chain software company Circulor, e-document settlement company SERES, and global financial institutions such as SDK.Finance. By decentralizing the access to transactions, the newly-expanded platform can improve the trust relationship between franchisor and the franchises.

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However, through researching Oracle’s different areas of operations, I stumbled upon some articles talking about this advertising software division (known as Data Cloud) which Oracle managed to build by spending five years and billions of dollars on six acquisitions. What this division is doing with their products is something completely opposite of the emphasis they have placed on security and privacy as I mentioned above and in my presentation. A company can use Data Cloud’s software to trace what people buy (online and offline), what websites they visit, what posts they like on social media, and target those people who can be its potential customers (so basically what Google does but with everything on your screen). Although this portion of the business only gave Oracle 500 million dollars of their 40 billion dollars of overall sales last year, it wasn’t that much of an additional risk when they started this whole project five years ago. After the Facebook-Cambridge Analytica data scandal, though, Facebook promised that companies like Oracle would have to get more consumer consent to use such data and it would stop selling ad data on behalf of these third parties. Therefore, the cost and risk of running such a software has skyrocketed since as people are much more aware of how companies are using their personal data and invading their privacy.

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Lastly, I would like to give a short follow-up on the underpayment scandal of underrepresented groups and women in which Oracle is currently involved. As we have briefly discussed in class, the U.S. Department of Labor accused Oracle for underpaying Asian, Black, Hispanic, and women employees which has amounted to be around 400 million dollars so far. It was so accused of hiring a great number of international students so that they can be underpaid in the future because of their need for sponsorship in H1B working visa. Although Oracle is not the only case in the Silicon Valley which is notorious for inequality in its workforce, it is in the center of attention right now because of USDL’s accusation. Just a few days ago, the USDL commented that Oracle is “seeking to deflect attention” by suggesting that “someone could use the average pay gaps from OFCCP’s (Office of Federal Contract Compliance Programs) analysis to ‘reverse engineer’ the employees’ actual compensation… Setting aside that this is not mathematically possible, Oracle ignores that fact that more specific compensation is more readily available from Oracle’s filings in this case, as well as on numerous public websites.” Though Oracle hasn’t responded to this commented yet, it will be interesting to see what they would say in the future and even ask Dave for his view on this kind of atmosphere in the Silicon Valley ourselves when we visit Oracle.

 

Here is a fresh article I just saw on twitter which offers a different perspective on the underpayment scandal:

https://www.wsj.com/articles/discriminating-against-oracle-11550100971

3 thoughts on “More On Oracle: Cloud, Blockchain, and Controversies

  1. Oracle has always been one of those companies that I knew was huge but, other than seeing their name every time I updated Java, knew very little about. Your presentation and this follow up post have been really informative so thank you! It always confuses me when massive companies with plenty to go around are caught in payment scandals. You would think then negative press would be outweigh the amount of money they are “saving.”

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  2. I can’t believe Oracle is adopting enterprise blockchain worldwide. Launching something so new and rather unexplored at such a big scale takes a lot of guts. Nothing less from a computer tech giant. However, launching enterprise blockchain worldwide does make me wonder if the profits and success from this will cannibalize from their existing products and services like with the cloud. Does blockchain and the cloud services conflict with each other or do they complement each other for a business? Would Oracle users end up choosing between using blockchain for their business or using the cloud?

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