American software giant Oracle Corporation recently announced that the company is moving its corporate headquarters to Texas, the US from Redwood City which is in the Silicon Valley region of California. The business software maker has now joined the ranks of other tech giants that recently announced its departure from the region due to its higher operational costs and hefty taxes. Silicon Valley, which is located, in the Northern part of California in the US has been home to many tech companies such as Google, Apple, Adobe, and Netlfix for decades. Regarded as the global centre of technological innovation, it also one of the most expensive cities in the world in terms of house rents that harbours several billionaire entrepreneurs.
The tech companies' exodus from Silicon Valley is also due to financial uncertainties caused by the ongoing COVID-19 pandemic. While announcing its shift from the region, Oracle had said that a bulk of employees could choose their office location, or continue to work from home part-time or full-time. "We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work." Ahead of Oracle's announcement, Phil Mahoney who is the vice chairman at major commercial real estate advisory firm, Newmark said in an interview that there's no birthright that says Silicon Valley has to get all the great tech companies of the country. However, he had added that the area has a "special sauce" that no other place has been able to replicate.
Earlier this week, electric car-maker Tesla's Elon Musk also said he relocated from California to Texas, though his companies including SpaceX still maintain their major operations in California. Another major tech corp, Hewlett Packard Enterprise that split from the HP Inc in November 2015, has also announced its plans to shift headquarters to Houston, Texas. It has been based in Silicon Valley since the company's founding in 1939. Notably, American data analytics software company Palantir Technologies moved its headquarters Palo Alto, California, to Denver, Colorado earlier this year. In an interview with Axios in May, Alex Karp Palantir, Technologies CEO, said that he was against the "increasing intolerance and monoculture of Silicon Valley," - indicating his decision to shift operations out of California.
Drew Houston who is the CEO of cloud storage firm Dropbox is also reportedly moving to Houston, Texas; however, the company is still based out of the Silicon Valley region. As companies decide to move to Texas that is led by Republicans from the Democrats-led California, it also adds a political tinge to the situation.