Ties That Bind - Bay Area Council Economic Institute

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Ties That Bind
� A $1.6 million donation of Sun networking systems in 2001 to China’s Ministry of Education,
for installation in 10 nationwide distance learning centers, and a 2002 donation of
the open-source StarOffice software suite for distribution by MOE and unlimited use
in schools.
� A $115 million program with Taiwan smart card systems integrator TECO Electric &
Machinery Co. in 2002–03 to develop a paperless medical record/claims processing
system for the Bureau of National Health Insurance of Taiwan, issuing 22 million medical
insurance ID cards to Taiwan citizens.
� A 2003 agreement with the China Standard Software Co., a tech consortium, to establish
Sun’s Linux-based Java Desktop system as the industry standard across China, installing
up to 1 million copies annually nationwide.
Oracle Targets Mid-Sized Business
Oracle first established a China presence in the early 1990s. Today it has R&D centers in Shenzhen
and Beijing, opened in 2002 and 2003; mainland representative offices in Beijing, Shanghai,
Guangzhou and Chengdu, plus offices in Hong Kong, Taipei, Hsinchu and Kaoshiung; and
plans to open its 18th worldwide global support center in Dalian, to provide customer service
and technical support to customers in the PRC, Taiwan and Korea. In October 2005 Oracle
China had some 800 employees.
China has grown to become Oracle’s second largest Asia market, behind only Japan. Among its
larger customers are China Mobile, China Telecom, Baosteel, Huawei, Bank of China, Industrial
and Commercial Bank of China, China Airlines, Shanghai Power and Xinhua News Agency.
Some of its midmarket accounts include Shangdong Provincial Hospital, Xiamen City Commercial
Bank; Sha’anxi Gear Factory, Xi’an Aero Engine, Nanjing Normal University and Changjiang
Waterway Bureau’s Nanjing branch.
Extending Oracle’s products and services to small and mid-sized businesses, and to Tier-2 cities
with populations of 2–30 million, is a top priority for the company. Oracle cites a National
Development and Reform Commission study estimating that small and mid-sized businesses
employ 75% of urban workers and account for 50% of the nation’s GDP, and has launched a
program targeting such businesses in 26 cities with economic growth rates well above the
national average.
A 2003 strategic alliance with Chinese Linux software/applications developer, Red Flag Software
Co., has produced a lower-cost, streamlined and secure version of Linux to run Oracle database
and other software—particularly its E-Business Suite China Special Edition—for smaller businesses
and government agencies. Oracle now plans to hold technology forums in the 26 cities, as
it builds a network of independent software vendors (ISVs) in targeted cities to expand geographic
coverage and penetrate vertical industries. A Shenzhen-based center provides support for
ISV application development.
Oracle’s Beijing R&D facility is working on location-based, geographic information services; egovernment
solutions; and wireless applications and solutions. Under a memorandum of understanding
with property developer Shui On Land, Oracle will develop and showcase digital com-