Imagine what the world would be like if there were no software companies. No computers, laptops, phones, or machines would exist.
Software is an integral part of all tech devices. For example, it is impossible to operate any automatic machinery without software. I am highlighting the significance of the software because today’s article has a close relation with software and software houses.
If you are a tech freak, who loves to read about software, this article will be a treat for you since today, we will be conducting Oracle SWOT Analysis. Oracle is a well-known software company with a huge global customer base.
Currently, Oracle is the 2nd largest software company in the world in terms of revenue. So, looking at the operations of Oracle, we decided to conduct an Oracle SWOT analysis. However, before proceeding to the SWOT analysis, let’s look at how this gigantic software company came into being.
If we look at the history of Oracle, we get to know that the foundations of the software company were laid in 1977 by three partners. The company was initially named Software Development Laboratories. However, after changing its name a couple of times, finally, the company was named Oracle in 1982.
After operating for a few years, the company decided to go public in 1986. After a year, Oracle achieved its first major achievement when the company was named as world’s largest database management company. Oracle had managed to generate sales worth $100 million and made customers in 55 countries.
In 1992, Oracle launched the Oracle7 database, which proved to be a game changer. This helped the company to attract more customers. The demand for the software programs of the company was increasing daily. To facilitate its software sales, Oracle developed a product strategy to deliver its software through the internet.
This concept shook the entire market, and Oracle gained much recognition. The company kept on expanding its operations. In 2005, Oracle acquired a leading company in HR and ERP apps named PeopleSoft.
In 2008, the name Oracle echoed among movie fanatics when Marvel entertainment used Oracle’s apps to mine data. Naturally, this increased the value of Oracle’s products, and its sales kept increasing.
The software company acquired a few companies to expand its operations and finally came up with the database cloud in 2013. After reaching a certain point, Oracle thought of doing something for tech startups. That is when the software company decided to launch a startup program to promote tech entrepreneurs.
In 2018, the brand launched the first autonomous database, which can perform self-patching, self-managing, and self-tuning. The cloud produced by Oracle is currently being used by research centers to perform physics analysis and compute models of diseased hearts.
Besides that, Oracle is helping the government and agencies in combating and understanding coronavirus. Oracle is one of the biggest software companies in the market. In 2021, the software company generated $42.44 in revenue. Moreover, it has expanded its workforce to 143,000 employees.
Now that we are discussing Oracle’s history and current operations let’s proceed further and conduct Oracle’s SWOT analysis. However, before doing that, let me briefly introduce you to what SWOT analysis is.
A SWOT analysis is a method used by analysts to see the impact of internal and external factors on the operations of organizations. The word SWOT in the SWOT analysis represents the strengths, weaknesses, opportunities, and threats an organization faces.
A SWOT template provides a detailed account of the internal and external factors affecting the performance of an organization. Now that we have discussed the SWOT analysis let’s proceed with Oracle’s SWOT Analysis.
Strengths of Oracle
Strengths are the strong points that any organization possesses. These strong points help an organization in getting ahead of its rivals. In this section, we will analyze the strengths that Oracle possesses.
1. Vast Customer Base
Every business looks for ways to increase its customer base. However, years of hard work are required to build a solid customer base. There are multiple benefits of having a strong customer base. One of the obvious advantages of having a solid customer base is an increase in revenue.
Oracle is one of the brands that have a very vast customer base. The software company has more than 70 million users. Naturally, having such a vast customer base helps Oracle generate huge revenue.
2. Diverse Portfolio
Businesses try hard to diversify their portfolio because having a diversified portfolio is beneficial for businesses. The reason why businesses prefer having a diverse portfolio is to attract customers with different needs.
Oracle is one of the best examples of having a diversified portfolio since Oracle offers products and services belonging to different industries. For example, the software company covers banking, food and beverages, healthcare, communication, and many other industries.
Moreover, Oracle is known for its software, hardware, cloud services, etc.
Such a diverse portfolio helps Oracle attract customers and businesses that belong to different industries.
3. High Brand Recognition
Any brand wants to get recognized by customers, so brands take different routes. For example, creating controversies and signing celebrities. However, providing quality products is the best way to gain brand recognition.
Oracle is one of the brands that hold high brand recognition. The reason for this recognition is its quality products. For example, in the 1990s, Oracle’s database was named one of the most influential products of the 1990s. Moreover, later the brand gained significant recognition when Marvel entertainment used the brand’s applications for data mining.
Weaknesses of Oracle
Organizations that possess strengths also possess some weaknesses. Weaknesses are the drawbacks that keep organizations away from success. Although Oracle has achieved great success till now, let’s highlight some of the weaknesses that it suffers from.
1. Less Spending on R&D
Continuous R&D is crucial for any brand to stay ahead of the curve. Innovation is something that attracts customers and improves the efficiency of an organization. Although Oracle spends a significant amount on R&D. However, that’s not enough.
If we compare the R&D expenditure of Oracle with Microsoft, Oracle is hardly spending anything on R&D. In 2022, Microsoft spent $24.5 billion on R&D. However, in the same year, Oracle spent $7.2 billion on R&D. Due to the low R&D expenditure, Oracle fails to become the market leader and follows the lead of Microsoft.
2. High Number of Labor
Every brand looks forward to hiring a workforce that can carry out the company’s operations efficiently. However, hiring a huge workforce can be problematic at times. A large workforce not only creates administrative issues but also increases the operational cost of the business.
Oracle has hired a large workforce. Currently, 143,000 employees are working under the banner of Oracle. This increases the operational cost of the software company and causes profit margins to shrink.
3. Low Marketing Expenditure
In today’s world, brands need to spend sufficient money on marketing. Having a good marketing strategy is essential to increase your number of customers. Although Oracle has amazing products, the brand fails to market its products in the right manner.
The marketing expenditure of Oracle was $8.1 billion in 2022. On the other hand, Microsoft’s marketing expenditure in 2022 was $22 billion. This disparity causes Oracle’s potential customers to buy Microsoft’s products due to its effective marketing techniques.
Opportunities Present For Oracle
Opportunities are the chances available for any organization to make it big. Organizations get different opportunities to achieve growth. In this section, we will analyze what opportunities Oracle has to succeed.
1. Increase In The R&D Expenditure
Innovation is the key to success in the current market situation. Any brand that doesn’t spend enough on R&D will be left behind. Currently, Oracle isn’t spending much on R&D. However, it has an opportunity to increase its R&D expenditure in the future.
By doing so, Oracle can develop more cost-efficient and innovative products. As a result, these products will attract more customers and increase Oracle’s revenue.
2. Start Manufacturing Smart Gadgets
Oracle has been in the software industry for almost half a century. Although it has evolved its products, still its major product is software. Since Oracle has mastered the art of making software, it can now switch operations and start manufacturing smartphones, TVs, and laptops.
Oracle can increase its customer base if it starts manufacturing these smart gadgets. Moreover, it can develop software for its own products, which will cut the cost of buying software from different companies.
3. Upgrade The Marketing Strategy
Marketing holds great significance in increasing the customer base and market share. As a result, Oracle can restructure its marketing strategy and allocate more funds for marketing.
Increasing the marketing expenditure can draw more customers to Oracle, leading to higher revenue.
Threats Faced by Oracle
Threats are the worries that any organization faces from the external environment. These threats must be countered timely, or they can adversely affect the organization. This section will look at the threats faced by Oracle.
1. Global Recession
The world is about to experience a global recession due to the aftermath of the pandemic and the Russia-Ukraine War. The recession will negatively impact businesses since it will cause product demand to fall.
In case of a recession, Oracle will also suffer from declining sales of its products. This will lower the revenue of Oracle, resulting in its profit margins shrinking.
2. High Competition
The software industry is highly competitive. Many firms offer similar products, due to which many substitutes are available in the market.
Oracle feels threatened by its competitors, who have a significant position in the market, such as Microsoft, Google, and IBM. To compete with such great companies, Oracle has to stay on its toes.
3. SAP vs Oracle
You must have witnessed the debate about whether SAP has a better ERP or Oracle. So let’s settle this debate today by doing an SAP vs Oracle face-off. SAP is a German software company that offers similar products to Oracle.
Both software companies offer ERP to different businesses. However, there is always a talk about which company offers the best ERP. So let’s compare the ERP of both companies to find out.
Oracle and SAP both offer great financial management ERP. Both brands did a great job in providing financial options such as accounts receivable, payable, and fixed asset management. However, Oracle’s ERP is slightly better since it does better risk management than SAP.
The CRM software of both SAP and Oracle is amazing. However, both software has strengths and weaknesses in different areas. For example, Oracle’s software masters marketing support and provides the opportunity to manage campaigns on a single platform. On the other hand, SAP excels in the customer account management field. This makes them both sort of equal.
Both software companies have good ERP. However, Oracle’s financial management software beats SAP’s ERP.
Oracle SWOT Analysis: Final Word
Oracle is one of the leading software companies in the world currently. The software company has been operating in the market for almost half a century. Still, it has kept itself relevant with the changing technology.
After looking at the factors that make Oracle different from other software companies, we conducted Oracle’s SWOT analysis. However, before proceeding to the SWOT analysis, we shed light on the history of Oracle.
After discussing how the company was established in 1977 and how it evolved over the years, we looked at Oracle’s current operations. After that, we introduced our readers to SWOT analysis and conducted an Oracle SWOT analysis.
The SWOT analysis highlighted Oracle’s strengths, weaknesses, opportunities, and threats. We carried out the SWOT analysis in the form of an essay. However, the result of this article can also be represented in the form of a SWOT Matrix and a SWOT table.
After that, we compared SAP and Oracle’s ERP and learned that Oracle’s financial management software beats SAP’s ERP.
In the end, I hope you liked reading this article since it provided you an insight into Oracle and taught you how to conduct a SWOT analysis. However, if you want to know more about SWOT analysis, look at some more SWOT analysis examples.