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Did Oracle Just Throw Their Salesforce Under The Bus?

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oraclethrowsyouunderthebus 150x150 Did Oracle Just Throw Their Salesforce Under The Bus? If you are a technologist I hope you love the great technology portfolio assembled by Oracle. It is really something to be admired. And the well engineered optimized configurations of hardware and software like the Oracle Big Data Appliance are so awesome I think most enterprises should get one.

But there are big roadblocks to adopting new solutions from Oracle. Like cost. The perception of many is that Oracle cares more about money than customer missions.  Another is what seems to be overly agressive, scary tactics by Oracle that can include launching lawyers at enterprise CIOs. Other impediments, at least from my outside observer perspective, seem to be that the sales force is given uncertain or at times ambiguous goals on how they will be rewarded for selling the more advanced hardware and software solutions.

When you add the above to the fact that the technology domain evolves very very fast it has created some challenges for Oracle success. Enterprise customers have lots of other options now, including building lower cost, highly scalable solutions using the Cloudera Distribution of Hadoop and the many related capabilities the community is providing.

Something else is interesting and makes me scratch my head a bit. According to Reuters (see below) “Senior management assured Wall Street on Wednesday that a worrying 2-percent slip in new software sales was mostly due to a sales force that lacked urgency”.

So, the problem in the minds of some at Oracle is not their high cost, and not the competition, and not their agressive tactics, but a salesforce that lacks urgency.

That may or may not be true.  But if you are in the Oracle sales force you may want to think about what a management attitude like that says about what is coming your way from HQ this quarter. Might be good to start thinking through your options now. I wouldn’t suggest you do anything rash in an employment market like this one, but you may want to keep your LinkedIn profile up and be sure you are connected to me there in case you will want to chat with me about options in the near term.

For more info see the following from Reuters:

(Reuters) – Oracle’s severe miss in quarterly sales, dismissed by management as a blip, amplified questions on Wall Street about the business-software giant’s diminishing clout in an industry moving rapidly toward cheaper Internet-based rivals.

Senior management assured Wall Street on Wednesday that a worrying 2-percent slip in new software sales was mostly due to a sales force that lacked “urgency”, something to be addressed this quarter. Many analysts agreed, describing the decline in software and hardware revenues as a speed bump.

Others say the dismal numbers highlight concerns that the strategy championed by the world’s No. 3 software maker, of integrating cloud software with its own hardware for greater efficiency, may not be enough to keep up with a growing number of rivals offering low-cost solutions.

Some worry that Oracle’s era of fast growth and lofty margins, when it could dictate prices because of its premier market position, may be waning.

Aggressive, fast-growing companies like Salesforce.com are now offering competitive products at prices that often undercut Oracle, said Cowen analyst Peter Goldmacher.

“For a long time they’ve held firm on pricing for maintenance, which is their highest margin business, and they’ve really stuck it to their clients,” said Goldmacher. “Now that you have an ever-growing raft of alternatives, more and more traditional customers are availing themselves of those alternatives.”

Shares in Oracle slumped nearly 10 percent on Thursday — their biggest single-day drop since December 2011.

Even though Chief Financial Officer Safra Catz said on Wednesday its salespeople are well on their way to signing deals they missed out on before the February quarter ended, some analysts believe the 35-year old tech company may face more serious problems as upstart rivals challenge its core business.

“Data base revenue, which has been the cash machine of the company, has changed. There are now alternative databases, as well as the cloud,” said Mark Moerdler, an analyst at Bernstein Research. “That pressure is still a tiny bleed, but it is out there and the question is – is it bigger than we think it is?”

An Oracle spokesperson declined to comment.

 Did Oracle Just Throw Their Salesforce Under The Bus?

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Bob Gourley writes on enterprise IT. He is a founder of Crucial Point and publisher of CTOvision.com

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