Businessmodel of Oracle

Customer Segments

Oracle itself is aimed at enterprises, which could be regarded as a mass market. But this can be further segmented, depending on the industry that each enterprise is in. Oracle is a company that takes pride in developing industry-specific database and information system solutions.

This means its customers are segmented into the different industries that Oracle specializes such as communications, education, financial services, health sciences, hospitality, retail, and utilities.

Value Proposition

• A thriving cloud system that provides an enterprise-grade cloud application suite for businesses. Only Oracle has invested to this extent in cloud computing. It is paying off with an unparalleled level of choice, accessibility and security for data information systems.
• Unrivaled expertise in a vast array of industries. This ensures Oracle applications can be tailored to meet the needs of specific businesses.
• By meeting business needs better than its competitors, Oracle delivers a high return on investment for companies that utilize its on-site or cloud database application suite.
• Oracle delivers unmatched support for businesses using their products. This leads to long-term relationships that increase customer satisfaction and generate more leads for the company.
• Continued significant investment in R&D ensures Oracle always remain one step ahead of their competition. In fact, Oracle tend to report an annual expenditure on R&D of somewhere close to 15% of revenues. ### Channels

Oracle employs a significant sales force to market its products. This means a particular emphasis on face-to-face interaction with prospective clients. This intimate level of interaction with businesses helps ensure that the sales team understands the particular needs of a business. The attention to detail here ensures a high conversion rate of leads into new clients.

As a technology giant, it also makes sense that they devote some of their marketing budget to the web. This means an impressive website that highlights the key features of all software products.

As a global technology company, Oracle utilizes a host of other sales channels including independent software vendors, education providers and re-sellers.

Customer Relationships

As a technological giant, Oracle puts emphasis on building a stellar online community that allows for prompt communication with clients. This comes in the form of online support forums and dedicated live chat assistance to help deliver a streamlined customer support experience that ensures long-term relationships with clients.

The level of detail that Oracle puts into ensuring stellar and personalized communication that ensures issues are solved promptly results in a very low abandonment rate.

Key Activities

Oracle’s key activities have always centered around innovation and results. As part of a constantly evolving industry such as technology, the developers at Oracle are always focusing on upgrading their existing software solutions to meet the needs of the businesses they work with. Most recently, this has meant incorporating cloud technology into their applications and tools. The developers spent seven years re-coding their popular software to cater for the cloud.

Oracle also make sure that their products deliver results. In a business environment, this means providing software solutions that are highly secure, flexible, scalable and efficient. The developers work hard to refine their suite of products. Delivering results also entails developing software that generates a good return on investment for companies that invest in it. Oracle achieves this with a vertical industry structure, with industry-specific expertise available that helps businesses utilize their software to remain competitive and cut costs through an efficient information system.

Key Partners

As a global corporation supplying a vast array of businesses with the tools to aid in developing stellar information systems, Oracle has a staggering number of business partners

It is important for Oracle to liaise with other technology companies in ensuring that its software solutions are fully functioning at all times. This includes key partnerships with computer manufacturers such as Dell, Lenovo and HP and other software companies such as Microsoft and Linux.

Key Resources

A key resource for Oracle is their diverse and global workforce of over 130,000 employees. This includes industry-specific experts and consultants who provide valuable insights to businesses on the use of their products and help generate new leads. It is also important to consider the level of customer support. Oracle employs over 18,000 support staff. These people are vital in maintaining company’s reputation as an industry leader in support offered.

As a publicly listed company, another key resource for Oracle is its investors. The list of investors grows by the day and ensures that Oracle can continue to develop and innovate.

Cost Structure

The three main costs for Oracle are technology, sales and R&D.

Technology is self-explanatory here – Oracle is a tech company that needs to invest a lot of money every year in expenses such as dedicated web servers, computer programming and maintenance of their software.

The sales costs arise from employing a dedicated sales team to generate leads for the company. There are also the costs of advertising their application suites to consider.

R&D is another significant expenditure. As a technology company priding itself on innovation, a significant chunk of the company’s annual budget is reserved for R&D expenses to help inspire new ways to make its software more efficient.

Revenue Streams

Oracle generates its revenues from businesses that purchase a license to use its software. As a provider of database management systems to the majority of the world’s leading businesses, Oracle derives some 80% of its revenue from the Fortune 2000 companies. The remaining 20% is composed of other income from companies in the public sector and non-profit institutions.