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Oracle’s Poorest-Performing Regions for Revenue in 1Q16

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EMEA and Asia Pacific

In 1Q16, Oracle Corporation (ORCL) reported that it earned about 56% of its revenue from North America and Latin America. The remaining 29% and ~15% of total revenues Oracle generated from the EMEA (Europe, Middle East, and Africa) region and the Asia-Pacific region, which includes Australia, India, and Korea. Both the EMEA and Asia-Pacific regions reported declines in revenues—by 5% and 8%, respectively, YoY (year-over-year).

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Sales staff additions in Asia-Pacific region

On March 26, 2015, Oracle announced that it will expand its workforce by 1,000 people in the Asia-Pacific region. Out of this 1,000, Oracle plans to hire 300 in India. This news came as a surprise, as 2014 saw leading technology players like Microsoft Corporation (MSFT), IBM (IBM), SAP AG (SAP), and The Hewlett-Packard Company (HPQ) announce layoffs as a way to keep costs in check.

Oracle aims to capitalize on the still nascent cloud computing market in the Asia-Pacific region, which is expected to take off with the economic expansion and proliferation of increased internet penetration, broadband, and mobile infrastructure. Loic Le Guisquet, Oracle’s President of EMEA and APAC (Asia-Pacific and China) regions, said that the “strong economic growth and infinite possibilities that cloud technologies offer has created an unprecedented opportunity in Asia Pacific.”

However, despite the growing cloud adoption in the Asia-Pacific region as well as the company’s additional sales staff, the region failed to report growth in 1Q16. One likely reason could be that difficult conditions imposed by Russia and China for global technology companies have held down growth. China reportedly plans to end the use of foreign technology in its primary sectors by 2020. Both the Russian (RSX) and Chinese (MCHI) governments are reportedly devising plans and laws to cull US technology players so that local suppliers will get preference.

To learn more, please read the series Why BRIC Markets Are Appealing for Global Technology Players.

In the next part of this series, we’ll look at how Oracle’s Software segment performed in 1Q16.

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