US software giant Oracle Corp is putting China at the forefront of its business strategy and aiming high in the booming local market.

The world's second-largest software maker expects China to become its No 2 revenue contributor in the Asia-Pacific region by the end of the year, said Loke Soon Choo, regional managing director of Oracle's Greater China operations.

China is currently Oracle's third-largest market in the region, following Japan and South Korea.

Loke said he is more bullish than company president Charles Phillips, who expected China to overtake South Korea to become the second largest market for the company in three years.

"We have been witnessing rapid business growth in China. If it continues to grow so fast and we work hard, I think we will have a good chance (to see China become the No 2 market), Loke told China Daily Tuesday.

"China is the fastest-growing market for Oracle in the world."

For the 2004 fiscal year, which ended on May 31, the Asia-Pacific region contributed to 14 percent of Oracle's worldwide revenues.

China's booming IT market is making Oracle increasingly bullish about its business prospects in the country, Loke said.

According to global research house IDC, China's IT market grew 11 percent year-on-year to US$25.1 billion last year. The software market surged 24 percent year-on-year, much higher than the 8 percent growth in the hardware market.

IDC projected the IT market in China will grow at an annual average of 15.6 percent from 2003 to 2008, reaching US$51.74 billion by that time.

Technology adoption in China is increasing, Loke said, adding that about half of Oracle's revenue in China is from local firms.

Oracle's Golden China initiative, a three-pronged strategy of commitment, localization and partnership, is paying off, he noted.

The initiative, launched in 2002, focuses on developing and investing in business and educational programmes, as well as local research and development (R&D) facilities that will contribute to China's long-term growth and success.

"The fiscal year 2004 was the best business year ever for Oracle China," Loke said.

To further capitalize on China's sizzling IT market, Oracle is considering establishing new R&D centers in the country, but does not have any solid plans yet, he added.

Oracle has two such centers in Beijing and Shenzhen.

Oracle also announced yesterday that it had signed a memorandum of understanding with China's Ministry of Education to increase IT education in the country.

Under the memorandum, Oracle will donate software valued at US$143 million to universities in the western China's less-developed regions. That follows a US$70 million donation agreed in 2002.

Phillips said Linux is witnessing a major up-take in China, which is giving a big lift to the business growth of Oracle, one of the strongest proponents of the open-source software programme.

"China is a major driver of Linux (globally). The strong government support for Linux in China and across the Asia-Pacific region is fantastic," he said at the Oracle OpenWorld Shanghai 2004 global conference yesterday.

The Chinese Government has been promoting open-source Linux software as a low-cost alternative to Microsoft's Windows platform.

(China Daily July 21, 2004)