Rapid expansion puts squeeze on office space

PUBLISHED : Monday, 26 September, 2005, 12:00am
UPDATED : Monday, 26 September, 2005, 12:00am

With a series of strategic corporate acquisitions tucked into its large software business, Oracle is moving to adopt a revised property management plan to cope with its growing operations, staff and customers worldwide.

Real estate managers at Oracle are looking at ways to cope with current obligations and plan for growth in the firm's property portfolio - from acquisition or leasing to construction and facilities management, financial processing and performance tracking.

The Silicon Valley-based technology giant has a global workforce of 50,000, but that number is set to expand significantly after it snapped up 10 firms for more than US$18billion since December last year.

Its latest takeover deal, rival customer relationship management software supplier Siebel Systems, will cost about US$5.9billion after regulatory matters are completed. The bulk of the acquired firm's 5,000 employees will be added to Oracle operations worldwide.

Mark Gibbs, Oracle's senior vice-president for applications business in the Asia-Pacific, said office space management was an issue and an important part of corporate operations.

'We are currently going through this exact exercise in Hong Kong,' Mr Gibbs said.

'We will make predictions about our growth, both organic and inorganic. We will decide on a mix of consultants, back-office functionalities, customers and employee base.'

Based on those various assumptions over office space, Oracle real estate managers will then proceed to negotiate in the market.

Oracle operations in Hong Kong have been based in Causeway Bay for several years. 'You'll see a lot of developments in the real estate area in China,' Mr Gibbs said. 'We are really growing our space on the mainland through our development centres.'

Oracle is under pressure to accommodate its more than 275,000 corporate customers and 450 global user groups in its various customer and developer events worldwide.

That became apparent at the expanded Oracle OpenWorld event in San Francisco last week, where plenty of customers from acquired enterprise resource planning firms PeopleSoft and JD Edwards and retail specialist Retek showed up. Executives said most of the available hotel rooms in the city were occupied by OpenWorld participants.

'There are over 35,000 people here at OpenWorld,' Oracle president Charles Phillips said. 'That's a small city.'

Oracle's girth is expected to balloon as it generates more business from other recent acquisitions, including identity management systems specialist Oblix, enterprise search vendor TripleHop, real-time automation firm TimesTen, retail software vendor ProfitLogic, integration systems company Context Media and Indian software outsourcing firm i-flex.

John Wookey, senior-vice-president of applications development at Oracle, said: 'But this all boils down to our efforts to move Oracle to the front of the enterprise software industry.'