Ties That Bind - Bay Area Council Economic Institute
Ties That Bind - Bay Area Council Economic Institute
Ties That Bind - Bay Area Council Economic Institute
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<strong>Bay</strong> <strong>Area</strong>-China Trade: Behind the Numbers<br />
munity technologies at the Knowledge and Innovation Community, part of a Shui On development<br />
in Shanghai’s Yangpu District. Oracle’s China Graduate Development Program, established<br />
in 2002, offers training for university graduates. In all, Oracle contributed more than $200<br />
million in software and training as part of its Golden China Initiative during 2002–05.<br />
Oracle CEO Larry Ellison was an early investor in two other <strong>Bay</strong> <strong>Area</strong> firms looking to<br />
expand into China: Salesforce.com, a San Francisco-based online provider of customer relations<br />
management (CRM) software mainly for small and mid-sized businesses—although<br />
Deutsche Post, Merrill Lynch, Nokia, America Online, Dow Jones Newswire and others are also<br />
customers—and NetSuite, a Sunnyvale provider of hosted enterprise and CRM applications for<br />
mid-sized companies.<br />
Moving Software to the Web<br />
Salesforce.com was started in 1999 by former Oracle executive Marc Benioff. The company offers<br />
a suite of ‘plug and play’ salesforce productivity and CRM applications over the internet,<br />
eliminating the need for costly hardware, software development and training. Salesforce.com<br />
offers Chinese and Korean language versions of its programs. Its Sforce and Customforce options<br />
allow customers and their other software vendors to customize and integrate applications;<br />
the AppExchange product allows software developers to create and sell new customized applications<br />
over the Salesforce.com architecture.<br />
According to chief strategy officer and senior vice president Tien Tzuo, in a 2005 presentation at<br />
the UC Berkeley MBA Asia Business Conference, Asia—excluding Japan—accounts for about<br />
5% of Salesforce.com’s business, but is a fast-growing market. The company benefits from its<br />
online structure, allowing its customers and subscribers to learn and access productivity and<br />
customer relations management (CRM) applications via the internet, via mobile phone and iPod<br />
as well as a computer. When Salesforce.com entered the China market, Tzuo said, there was no<br />
legal definition for its business. Opening a China data center, as the firm had planned, would<br />
have classified Salesforce.com as a telecommunications company and required 51% Chinese<br />
ownership. The servers remain offshore.<br />
San Mateo-based NetSuite, established in 1998, posted $70 million in 2005 revenue. Half of its<br />
7,000 customers are businesses with fewer than 100 employees. NetSuite offers small and midsized<br />
businesses e-commerce and CRM solutions over the internet, including accounting, customer<br />
support, order fulfillment and online payment. Net Suite has offices in Hong Kong and<br />
Singapore, and launched in Japan in March 2006. It plans to enter China by yearend 2006.<br />
Sybase, headquartered in Dublin, provides open-architecture client-server and mobile enterprise<br />
software solutions for the financial services, government, communications and health care sectors.<br />
It was launched in 1984 in Berkeley, and today has more than 3,700 employees worldwide<br />
and 40,000 corporate customers in 60 countries. The company has R&D centers in Beijing,<br />
Shanghai and Xi’an; provides 24/7 customer support through offices in those cities plus Hong<br />
Kong, Taiwan, Guangzhou and Chengdu; and utilizes more than 150 China partners. Among<br />
recent Sybase China projects:<br />
83
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