November 4, 2021

Why Oracle moved Its HQ from California to Texas

Software giant Oracle recently relocated from Redwood City, California, to Austin, Texas, joining the likes of Tesla and Hewlett-Packard – both of which departed from Silicon Valley to the Lone Star State to seek better growth and expansion opportunities. In an interview, Oracle spokesperson Deborah Hellinger said that the database-software giant would enhance its position in the market and provide its personnel with more flexibility about where and how they work, thereby improving their quality of life and productivity.

In this post, we’ll dive deeper into why a brand that has been based in Silicon Valley since its founding in 1977 decided it was time to pack up its businesses and relocate to another state.

Trouble in Paradise or a Pandemic-Sponsored Epiphany?

Oracle Corp, founded in 1977, is a Silicon Valley Stalwart and one of the oldest tech firms in the state. Its previous headquarters features its well-known cylindrical buildings and the Oracle Park where the San Francisco Giants play. The company has over 135,000 employees, and like many other tech firms in the country and around the world, it had to make some changes during the pandemic, including embracing remote work. Several other firms in California have announced to leave the state due to its climbing tax rates and higher cost of living and transport in most locales. Tesla CEO, Elon Musk, has already threatened to relocate its company completely and shut down its plant in Fremont following the completion of his new plant near Austin.

For years, the software giant specializing in providing business applications, cloud services, and databases has been looking for ways to shed costs during its transformation from a traditional IT company to a modern one. This transition resulted in declining revenue for two fiscal years, and the company spent years trying to revamp its product line and model to keep up with former neighbors and rivals Google.

However, this move didn’t begin during the pandemic. It started back in 2018 with Executive Chairman Larry Ellison and the late co-Chief Executive Officer Mark Hurd opening a campus in Austin. That wasn’t all. The campus also had an on-site apartment building for hundreds of employees, which showed glimpses of the company’s future intentions. Since then, the world’s second-largest software maker had been taking more steps to relocate, especially after the political changes in California, which saw Republican President Donald Trump losing in his re-election bid to Joe Biden. Ellison and current CEO Safra Cats have been major supporters of Trump and sharp critics of the internet and data-driven companies transforming Silicon Valley.

Why Texas?

For decades, the Golden State has offered job prospects and educational opportunities to millions of people. For nearly a century, Silicon Valley has been the country’s epicenter for the leading tech companies in the world. However, times are changing with Texas becoming the new tech hub in the country. According to the Austin Chamber of Commerce, over 35 companies had relocated to or expanded their presence in the Lone Star State by opening a facility or purchasing real estate by November 2020.

Austin offers several direct and indirect advantages for companies over California with lower housing and real estate costs, lower tax rates, lower cost of living, and business-friendly state regulations. Moreover, there’s already an abundance of technical talent in most parts of Texas looking for better opportunities in the state. Opting for a less expensive city or state allows a company like Oracle to control business expenditure and offers workers a more affordable place to live than San Francisco or Silicon Valley. The following are just a few large tech companies, along with Oracle Corp, that have announced plans to leave the Golden State for Texas:

1. Hewlett Packard Enterprises

Houston, Texas, has been HP’s largest employment hub for over a decade, even with its headquarters in San Jose, California. Due to changing regulations and higher costs, the company has also decided to build a new campus in Houston that will serve as the company’s new headquarters.

2. 8VC

8VC is one of the largest venture capital firms in the country, founded in 1969 in San Francisco, California. However, its co-founder, Joe Lonsdale, claimed that there are a lot of places around the country apart from Silicon Valley to grow their business and that many places will offer better cost of living, the same quality of talent, and cultural benefits.

3. FileTrail

FileTrail is one of the leaders in information governance and digital records management for law firms. The company recently moved from San Jose to Austin in 2021 after two decades of operating from its founding state.

Wrapping Up

And there you have it – Why Oracle moved its HQ from California to Texas. Silicon Valley and its numerous tech companies have been at the forefront of innovation in the last few decades. However, due to excessive housing and real estate costs, strict regulations, and higher taxes make the Golden State a tougher place to live, work, and run a business. As a result, many businesses are relocating to Texas to enhance their growth and improve the lives of their workforce.

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