Oracle's Jump to Nashville Surprises Austin | Hacker News Reader

Oracle's Jump to Nashville Surprises Austin

wsj.com

49 pointsdcgudeman55 comments

It's interesting, when TX which looked like a winner with HQ moving there three years ago, is now left scratching their heads as Oracle keeps on trucking to another state. It's just those wonderful market incentives working "as intended". In three more years HQ will move again to Mississippi or something.

Another reason for these kind of moves is to shed workforce without going through layoffs. People with higher salaries, mortgages, houses, family will choose to resign instead relocating to TN perhaps, while new college grads, with lower salaries might be more willing to move.

> Another reason for these kind of moves is to shed workforce without going through layoffs. People with higher salaries, mortgages, houses, family will choose to resign instead relocating to TN perhaps, while new college grads, with lower salaries might be more willing to move.

I hear stuff like that a lot. But that seems like the dumbest, most passive-aggressive move ever (though I'm not denying executives can be stupid). As many have noted, it's a great way to filter out your top performers and keep all the low performers.

> I hear stuff like that a lot. But that seems like the dumbest, most passive-aggressive move ever (though I'm not denying executives can't be stupid). As many have noted, it's a great way to filter out your top performers and keep all the low performers.

Oh, I agree. At a high enough level, bean counters just see it as a cost line in a spreadsheet. "We'll either hire H1B workers or new college grads. Look how much money we saved!"

There's lots of examples of outcomes from moves like this in the industry, so you'd have to be pretty naive to not expect these effects. Therefore, it's more likely these outcomes are intended.

I'm ready to believe this is intended by Oracle. It's such an institutional organization at this point that they've abstracted away a lot of the impact of individual performance (high and low).

When you're a monopoly, you don't need top performers, you need infantry that can say "yes sir"

> When you're a monopoly, you don't need top performers, you need infantry that can say "yes sir"

Is Oracle actually a monopoly, though? I don't pretend to know their whole product line, but their database seems like it's in a weaker position than it's ever been, no one with any sense uses their JDK distributions, and they've got a lot of 2nd tier business apps.

> it's a great way to filter out your top performers

Huh, it is rather insulting to people who are more willing to move and also stating top performers always stay stuck to same place.

But besides all that there is ton of work large companies do which simply does not need top performers so lower cost and lower perf employee will just do fine.

Another thing is among larger tech companies Oracle is among more remote friendly for decades. So if both party agree someone can work remotely just fine.

> Huh, it is rather insulting to people who are more willing to move and also stating top performers always stay stuck to same place.

Not really. I'm not stating a hard and fast rule, but a tendency. People with more options are far more likely to take action to avoid a major disruption to their lives, and people with fewer options are more likely put up with shit.

I know if my employer decided to pack up and move to a new city, I'd almost certainly prefer to take another job locally than uproot nearly everything to move with them for little to no benefit to me.

Another reason for these kind of moves is to shed workforce without going through layoffs.

For legal purposes, this sort of move is treated as a layoff by nearly every state, so that's clearly not a driver behind the move.

It's usually one of 2 things: tax incentives that make the move cost-effective over a 3-7 year window, or the CEO has moved to the new state and is dragging HQ along with him.The second is actually more common than the first. Tax incentives are fairly stringent and most companies fail to satisfy the requirements to receive the full incentives offered, so moving states for purely tax reasons is uncommon these days. Additionally, most of the so-called "business friendly" states are actually more burdensome and onerous than so-called "business hostile" states. Alabama, for example, has 7 different taxes on businesses that usually end up costing businesses more than the 1 or 2 taxes that the same business would face in California. Florida and Texas will openly attempt to inflict economic damage on companies with different ideologies from their governors.

In this case, the Texas Governor is remarkably anti-business (unless it's oil), and Oracle is probably moving to a state less hostile to business.

There's a big difference between Austin and the rest of Texas. Despite sharing some geography, they have little in common.

How big is it really? They’re firmly dominated by state politics which is going to be a big deal for a lot of people and they’re hardly immune to the weather, power, etc. problems.

You can say many, many bad things about the Tennessee Valley Authority, but they have not had the sort of tragicomic power outages that Texas has had in the last decade.

Poking around at fiber connections it looks like some important trunk lines from Atlanta to Chicago pass through or outside Nashville, so there’s that.

It’s also a crossroads town. There are three highways that cross at Nashville.

What bad things would one say about TVA?

Controlled relocation and flooding of towns for dams I think although I don’t have a good source

Well there was that time they dumped 1.1 billion gallons of fly ash slurry into a river, just off the top of my head.

When I lived in the midwest I vaguely recall people complaining about them for other reasons (but PGE seems to be doing more for people to bitch about. Or more precisely, doing less than they should).

I have the vaguest of recollections of foot dragging around coal plant emissions but that could just be the 1.1 BILLION GALLONS of fly ash water talking.

Lower latency so the sales team can send out demands for license upgrades faster?

I was thinking more their attempts at Cloud but your version is more sardonic.

Also Google and Facebook have both recently constructed large data centers just outside of Nashville.

https://www.google.com/about/datacenters/locations/montgomer...

https://www.facebook.com/GallatinDataCenter/

A friend(neighbor) lived in Austin, alot of bad trends happening right now. You mentioned power and that made the national headlines, but they also said weather(extremely hot) was why they moved, I think it was like 40 straight days where it hit triple digits(summer 2023). Top that off with housing that is really expensive and homeless issues that are very bad and I could see why a company could relocate elsewhere.

There is also the constant political turmoil. Leaving San Francisco and California for Austin and Texas is trading a frying pan for a fire.

I don't live in Nashville, but it's a pretty cool town. I was there just before the last Eclipse and I found it a vibrant and beautiful city. So it's not like they are moving to Nowhere, Alaska.

Oracle Health has been HQed in Nashville since 2023 [0].

It seems to be a pivot related to Oracle's acquisition of Cerner a couple years ago.

After the JEDI fiasco, Oracle has gotten very deep in the Health IT space, which is a much slower and stickier industry.

[0] - https://www.beckershospitalreview.com/ehrs/oracle-health-mov...

Does Oracle have much growth of their core RDBMS database product? When I look at the software dev ecosystem right now it makes little sense to use Oracle for a greenfield project: everyone and their dog are using Postgres, even if Postgres wasn’t free it still saves you from Oracle’s onourus licensing obligations.

So perhaps Oracle sees that they’ve extracted all of the value from their RDBMS from companies that are free to choose alternatives - time to move into an industry sector with great potential for regulatory capture. So… I wouldn’t be surprised if we start to see a HIPAA-like regulation for healthcare info that coincidentally only Oracle DB complies with.

> Does Oracle have much growth of their core RDBMS database product

Not really, and Oracle has clearly known that too for a decade.

They tried a pivot into cloud (they did a similar thing with Oracle Linux decades ago), and did a similar pivot into the Healthcare IT space over the past decade.

> HIPAA-like regulation for healthcare info that coincidentally only Oracle DB complies with

It's a competitive space.

Epic, Microsoft, AWS, and other companies can also meet those RFCs.

So do the senior executives all work remotely after they moved HQ out of Cali?

There are a number of them that I cannot imagine living in Tennessee, despite various advantages to doing so.

I am curious to know, what would be the various advantages of living in TN vs CA that you speak of? Have you lived in both these states for substantial periods?

Some unambiguous ones: cost of living, ability to buy a house (maybe less of an issue for executives), lower taxes (much bigger issue for executives).

Others that vary by person: political conservatism, smaller city, closer to everything besides the West Coast.

TN does not have a state income tax, and no longer taxes interest/dividend income either. Cost of housing is about an order of magnitude lower. Property taxes are lower. For the most part a radically lower population density. If you cross the Atlantic a lot, you don't have to spend 6 hours crossing North America first. If you're inspired to make The Handmaid's Tale a reality, don't like a whole lot of racial diversity, and love you some guns, TN and a majority of its population are friendlier to you.

In practice the south is more "racially diverse" than the Bay Area, because minorities can actually afford to live near white people. Coming from Atlanta it was shocking to me how homogenous the Bay Area was.

55% of the Bay area is Hispanic, Asian, or Pacific Islander. The major point how they differ is that the south has far more black people and fewer hispanics and Asians, vs the bay area having far more hispanics and Asians and far fewer blacks.

But in say Palo Alto, you’ll rarely see black or Hispanic people outside service roles. It’s 85% non-Hispanic white or Asian, which is about as diverse as Wyoming. The south is economically flatter, which means people mix more. Also, because of its affordability, the south is the major destination for upwardly mobile black and Hispanic people.

> If you cross the Atlantic a lot, you don't have to spend 6 hours crossing North America first.

Unfortunately Nashville International Airport doesn't have very many non-stop transatlantic flights so the geographic proximity savings is often eaten up by time spent connecting.

Wile Tennessee does not have a corporate income tax, it does have "business taxes" that are the same thing. And they also let counties and cities impose their own "business taxes" on companies. And these combined business taxes end up being more costly and time-consuming to businesses than a single state income tax return would have been.

Property taxes are lower. TN has an average property tax rate of 0.9x%. Los Angeles County has an average property tax rate of 0.5x% (i.e., nearly half). Property taxes in LA are only higher on an absolute basis because the property subject to tax is worth more.

Actually Nashville’s real estate market is very expensive. Belle Meade a Nashville suburb has the honor of being the richest town in America

These rankings are entirely false.

There is no richest town in America as a single individual moving anywhere could make it that overnight.

Also just prima facia there is no way belle mead is as rich as billionaires row Manhattan, Pacific Heights in SF or Bel Air in LA. Let alone the Hamptons/Jackson Hole zones.

That must depend on the definition of “richest town” because my quick search of that term disagrees.

Honestly this is hard to believe. Many uber wealthy suburbs attached to NYC, LA, and SF. Probably many other large cities too.

By what metric is this city the richest?

They'll live in a large air conditioned mac mansion with servants, in a gated community, just like they did in CA or TX.

Then force the peons back into the cubes, in order to keep CRE prices propped up.

The stated reasons are ridiculous, it's tax incentives. They are getting a quarter of a billion dollars overall from TN. This is what happens in a race to the bottom. Hopefully TX officials were smart enough to add long term clawbacks to the incentive package they gave Oracle.

I don't know the specifics, but I'd bet a quarter billion dollars that they didn't add clawback provisions. "The Great American Jobs Scam" goes into this is great detail - https://goodjobsfirst.org/gajs/

Abbott claws back from the population all the time but will never touch businesses. I don't know they received monetary compensation to move here, but they did tear down affordable housing and a few apartment complexes to build their campus here so that sucks.

The linked article says, in reference to Oracle relocating its HQ to Austin:

> Oracle, which was founded in Santa Clara, Calif., in 1977, later had its headquarters in Redwood City. The software giant, at the time of its move to Texas, said that relocation was to allow a more flexible approach to its workforce

> The company had neither asked for nor received economic incentives from Austin to relocate, said city officials. Nashville pledged $175 million in incentives and the state of Tennessee $65 million to help build the Oracle campus in 2021

So it would be technically correct to say that Oracle has not returned any tax incentives to Austin.

>Hopefully TX officials were smart

You sure asking a lot from the Texan politicians down here....

Especially true for the ones that govern Austin.

> This is what happens in a race to the bottom.

Are you saying the states should have no fiscal autonomy and everything should be decided in DC? Which, I don't doubt it, would magically happen to settle on the highest tax rates possible.

Is this the world we should strive more? Ever bigger, ever more centralized state (the US, the EU, China) pushing for ever more taxes?

What you call "race to the bottom" is competition and it allows to keep some of the states who'd be tempted to go all-in on socialism in check.

I don't want to see what happens when there's no tax competition anymore anywhere in the world. I know how it ends and it's not going to be nice.

What does headquarters even mean these days? A building with a logo on it and an update of address on a website?

The Oracle campus in Austin is huge and beautiful and mostly empty. What's the point of actually making a building?

Are there stats somewhere about headcount in their different offices and how much they plan to move? I usually assume things like this are symbolic or tax related without actually resulting in a massive move. Maybe it’s answered in the article - I don’t have access.

Oracle is working its way to some Washington suburb. Somewhere in Northern Virginia. Returning home.

https://archive.is/no1cS

Oracle founder Larry Ellison announces plans to move world HQ to Nashville

https://news.ycombinator.com/item?id=40148604

To be fair, Oracle Austin HQ was on the worst part of Austin (East Riverside).

Yeah that's definitely why they moved /s

Perhaps, they keep Austin TOO weird.

Reply on news.ycombinator.com