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Oracle's Aggressive Sales Tactics Are Backfiring With Customers (lightreading.com)

An anonymous reader shares a report: Oracle's aggressive sales tactics are turning off customers, setting a roadblock in the company's race to catch up with Amazon Web Services in the cloud, according to a report on The Information. [Editor's note: the link may be paywalled; alternative source]. Oracle is threatening customers of its on-premises software with potentially expensive usage audits and strongly suggesting those customers could solve their problems by moving to the cloud, The Information says. But the tactic is backfiring. "Several big Oracle customers, including oil and gas exploration company Halliburton, toy maker Mattel and electricity provider Edison Southern California, have recently rejected big cloud services deals proposed by Oracle, according to an Oracle employee with knowledge of the situation," the publication reported. "Oracle representatives had suggested the customers strike the deals to avoid expensive audits of how they were using Oracle software, according to the employee. Instead, that approach to selling cloud is irritating customers," it added.

30 of 232 comments (clear)

  1. When did software geeks become the Mob? by JoeyRox · · Score: 5, Interesting

    Shakedown tactics like demanding payment for protection are straight out of the Mob's playbook.

    1. Re: When did software geeks become the Mob? by Anonymous Coward · · Score: 3, Informative

      Oracle does this to government agencies all the time. It works quite well. All of them cave to demands to buy more licenses or face audits.

      It's racketeering.

    2. Re: When did software geeks become the Mob? by PolygamousRanchKid+ · · Score: 4, Insightful

      It's racketeering.

      Then it's time to hit Oracle with a RICO Act . . .

      . . . if Oracle hasn't already paid off the district attorneys . . .

      --
      Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
    3. Re: When did software geeks become the Mob? by Anonymous+Brave+Guy · · Score: 5, Insightful

      No, they couldn't. The provisions in the enterprise schemes that Oracle and other large IT organisations set up in return for offering deep discounts to their biggest customers almost invariably contain significant obligations around audits, which will be expensive and disruptive regardless of whether anything contravening any terms is actually found.

      The correct solution is probably to respond in kind. "Nice Oracle deployment we've got, and quite lucrative for you guys over many years now. Be a shame if the relationship broke down and we had to spend that money migrating our whole infrastructure to [competitor] instead."

      --
      If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
    4. Re:When did software geeks become the Mob? by Billly+Gates · · Score: 5, Interesting

      I am not a Gnu zealout by any sense of the means but being addicted to proprietary file formats is evil.

      We all hate Microsoft for doing this but Oracle and IBM have been doing this long before MS rise and in my eyes is less evil than Oracle today. Microsoft at least gives you the bone if you go to Azure and Office 365 by including other features and tools vs buying a copy.

      It is no different than ransomware once you are hooked. If your customer data or a MUST HAVE mission critical app has an Oracle dependency using proprietary PSQL your choices are to pay the ransom to Oracle, get sued, or shut your company down. Take your pick?

      Halliburton probably figured it would be cheaper to fight in court then pay the ransom as they have lots of money and I would guess seat licenses that Oracle is drooling to charge.

      Meanwhile IT costs keep going up even though technology should make them go down. They just lay us off and replace us with Indians and pay Larry Ellison the difference.

    5. Re:When did software geeks become the Mob? by DogDude · · Score: 3, Funny

      We all hate Microsoft for doing this

      Do you have any evidence of this? We've been using Microsoft enterprise-class software (not just Office) for years, and we've never been threatened with an audit.

      --
      I don't respond to AC's.
    6. Re:When did software geeks become the Mob? by giggleloop · · Score: 5, Insightful

      It's about the same as an IRS agent approaching you and saying "It'd be a real shame if you got audited. I hear some agents are being very, very thorough these days. No stone unturned. Oh! On a completely unrelated note, I need a favor from you..."

    7. Re:When did software geeks become the Mob? by Anonymous Coward · · Score: 4, Funny

      One
      Raging
      Asshole
      Called
      Larry
      Ellison

    8. Re: When did software geeks become the Mob? by hackingbear · · Score: 5, Insightful

      Because once the application are written to one flavor of SQL and the large amount data stored into that database, it is prohibitively expensive and disruptive to migrate out, so the vendor has an upper-hand to the existing large paying customers (who typically have under-trained developers.) This strategy would only backfire in attracting future customers once the stories spread out.

    9. Re: When did software geeks become the Mob? by Anonymous+Brave+Guy · · Score: 3, Interesting

      Because once the application are written to one flavor of SQL and the large amount data stored into that database, it is prohibitively expensive and disruptive to migrate out

      It's probably expensive, yes, but whether it's prohibitively so depends entirely on your circumstances. Maybe you can afford to hire enough smart people to get the job done if the alternative is being forced to migrate to some new cloud/subscription mess, which itself comes with a lot of risk and with unknown stability and uncertain future costs.

      --
      If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
    10. Re:When did software geeks become the Mob? by slickwillie · · Score: 4, Informative
    11. Re: When did software geeks become the Mob? by Darinbob · · Score: 4, Insightful

      You get stuck with the sunk cost problem. You're spent tons of money rolling things out to support Oracle. Now the yearly cost is high, but it's still a lot smaller than starting from scratch, so the companies stick with it. Never mind that the IT staff that are trained in Oracle and don't have experience in anything else have a vested interest in keeping Oracle lest they get replaced at the same time that Oracle is replaced.

    12. Re: When did software geeks become the Mob? by StormReaver · · Score: 5, Interesting

      When they approched out business we switched to postgresql

      I'll skip the details, but we, though our circumstances were not so dire, switched out all Oracle instances under our control to PostgreSQL because we got sick and tired of every aspect of Oracle's database (the software, the sales and marketing departments, the piss poor customer support, etc.).

  2. They didn't... by YuppieScum · · Score: 4, Insightful

    What happened was that accountants and MBAs took over the running of their companies, and all they know is that the purpose of any and all companies is to maximise shareholder value.

    --
    This sig left unintentionally blank.
    1. Re:They didn't... by Billly+Gates · · Score: 4, Informative

      Oracle was always expensive as hell. They just were slightly cheaper than IBM's DB2 and didn't require an expensive IBM mainframe contract back in the 1980s. Larry's answer always was I had payroll to meet for my developers back then.

      A company's goal is always to raise the shareprice forever with never an end in sight. The rest of the world is making money by selling to China in the past 20 years. Oracle unfortunately can't do this as Chinese do not pay for software so they need a new creative way to bump up the shareprice.

    2. Re:They didn't... by rhadc · · Score: 4, Informative

      In business school, they taught me to value the customer relationship over its lifetime. They also taught to think of all of the folks involved in the lifecycle of the product, including impacted non-customers, as important stakeholders. Oracle's approach has always been shortsighted, but it's painting with too broad a brush to treat all of the business educated as dollar chasing world breakers. Oracle's faults are Oracle's. Their shortsightedness is the result of *not* listening to sound advice, including that of MBAs.

    3. Re:They didn't... by hackingbear · · Score: 3, Interesting

      Not sure how this news relates to China. But Oracle has a huge presence in China and earn a lot revenue from there. Don't get brainwashed by Western media.

    4. Re:They didn't... by thegarbz · · Score: 3, Informative

      In business school, they taught me to value the customer relationship over its lifetime.

      The value of the customer relationship is not fixed. Either you're not doing the lifetime cost assessment or you went to one of those crappy business schools that preach "the customer is always right". Screwing over a few customers for money at the expense of losing some of them may be a right business choice. ... Especially when you have vendor lockin on your side.

  3. Wake me when they switch DBs by Ungrounded+Lightning · · Score: 3, Interesting

    "Oracle representatives had suggested the customers strike the deals to avoid expensive audits of how they were using Oracle software, according to the employee. Instead, that approach to selling cloud is irritating customers,"

    But are they irritated enough to bit the bullet, port their mission-critical processes to a non-Oracle database and kiss Oracle goodbye? (If not, they've knuckled under and are going to be locked in to Oracle's products and pricing forever - or at least until a later generation of their own management.)

    If Oracle is already pressuring them to port to a different DB (their cloud product) they've got a golden opportunity. Yes it might be more effort to port to some other DB then Oracle's own "other DB". But much of the work to absorb any differences - the port, the testing, and the dual-DB cya period - will be the same in either case. So it's only an increment, rather than the whole price of a DB port, to go to a different DB.

    --
    Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
    1. Re:Wake me when they switch DBs by Billly+Gates · · Score: 5, Insightful

      "Oracle representatives had suggested the customers strike the deals to avoid expensive audits of how they were using Oracle software, according to the employee. Instead, that approach to selling cloud is irritating customers,"

      But are they irritated enough to bit the bullet, port their mission-critical processes to a non-Oracle database and kiss Oracle goodbye? (If not, they've knuckled under and are going to be locked in to Oracle's products and pricing forever - or at least until a later generation of their own management.)

      If Oracle is already pressuring them to port to a different DB (their cloud product) they've got a golden opportunity. Yes it might be more effort to port to some other DB then Oracle's own "other DB". But much of the work to absorb any differences - the port, the testing, and the dual-DB cya period - will be the same in either case. So it's only an increment, rather than the whole price of a DB port, to go to a different DB.

      ... and switch to? The only thing equal is MS SQL Server which is also expensive and could do the same shit Oracle did.

      No MySQL and PostGreSQL are not options unless you serve web content and do simple database stuff. People who buy MS SQL Server and Oracle use their AI, financial, and advanced reporting tools. Business Intelligence APIs are HUGE right now and it is also possible it is not them but their other software they purchased is using Oracle as a requirement.

      In the old days when software was made in house you could avoid these problems. But the MBA's love packaged software for savings RIGHT NOW and this is what you get.

    2. Re:Wake me when they switch DBs by Anonymous Coward · · Score: 4, Interesting

      The thing is, you don't switch from Oracle (say, Exadata boxes) to something comparable as there is nothing directly comparable. What companies do is rethink their approach to BI, reporting and such and move to SaaS solutions, while simplifying greatly. The old days, where Fortune 500 companies would invest double digit millions in 1x and millions in ongoing spend in BI tools are gone.

      I am an enterprise architect, worked for a few very large companies and currently am CIO-1 in a 50bn company. We ditched Oracle and moved serverless all the way, and are reaping double digit million savings. Not to mention we don't have to run this shit.

      Oracle, in the meantime, is on a mission to push existing customers to their weird and overdue cloud thing. It started about 4 years ago, and their tactics started with stripping their own salesforece of commisions on on-prem solutions. Then price hikes. Now, I hear, auditing. (We've since cancelled all our licenses so luckily that's not one of my problems anymore).

      As to why people stick and swear by Oracle - Exadata offers support for insanely bad queries and still manages to make a pretty good job running them. This is a good solutions for companies with incompetent, outsourced dev teams that don't mind paying for the licenses. But the number of such companies is going down and Oracle must see the writing on the wall - they are going the IBM way of being relegated to niche solutions, US gov't contracts and the like. And by looking at IBM numbers, it's not exactly a pleasant place to be.

    3. Re:Wake me when they switch DBs by TheDarkMaster · · Score: 3, Interesting

      But you're actually talking about applications that use Oracle as a base, not Oracle database itself. For example here in my company we create PostgreSQL-based applications on a daily basis, we create complex analysis tools, BI, reports, graphs and etc, everything our customers may need we develop and we do not depend on any tool that requires the use of Oracle.

      --
      Religion: The greatest weapon of mass destruction of all time
  4. 3rd paty database by Teun · · Score: 3, Interesting

    Halliburton is regularly audited by the oil companies they work for and I assume they don't like the idea of having their sensitive information stored in a 3rd party database that is hard to audit.

    --
    "The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
  5. Re:Oracle Auditing by JustAnotherOldGuy · · Score: 5, Interesting

    I received an email a couple of weeks ago detailing how we are going to migrate everything to SAP (so it might be worse, I wouldn't know).

    Oh shit, now you're really fucked. I mean barbed-wire-wrapped-baseball-bat-in-the-ass fucked.

    I have had more exposure to SAP installs/systems than I ever cared to, and in each and every case the whole thing was a tremendous clusterfuck from start to...well, I would say "finish", but a SAP project is never finished. NEVER. It's never completed and so the money flows steadily out the door like a river...forever.

    Run like the wind, brother. Run and don't look back.

    --
    Just cruising through this digital world at 33 1/3 rpm...
  6. Re:Not new.. by ngc5194 · · Score: 4, Interesting

    This is similar to the question I've been asking: Are there any happy Oracle customers? My (limited) research suggests that the vast majority of Oracle customers have one of three characteristics: (1) They don't know any better, (2) They have more money than time/expertise for converting, (3) They're locked in.

    Are there other reasons? Is there anyone who would choose to do a new implementation using Oracle these days? For all I know there may be a lot of people who would, but I've never knowingly met any of them.

  7. Re:Oracle Auditing by serviscope_minor · · Score: 4, Funny

    I have had more exposure to SAP installs/systems than I ever cared to, and in each and every case the whole thing was a tremendous clusterfuck from start to...well, I would say "finish", but a SAP project is never finished. NEVER. It's never completed and so the money flows steadily out the door like a river...forever.

    The company I work for switched to "concur" by SAP for travel stuff. It's sort of like they decided to combine the worst bits of paper forms with the worst bits of computer based forms, then dizzle a fine layer of dog poo over the top.

    --
    SJW n. One who posts facts.
  8. Re: Oracle and Microsoft... by saloomy · · Score: 4, Informative

    Oracle has some pretty draconian tactics. I used to work for an Oracle EBS customer, and let me tell you, they are just like the mob. First, their fees are partially calculated by business revenue, which is absurd. Secondly, they failed to inform us of various software licenses on the technology side we would need to acquire which was only disclosed once we were partially through implementation. Turns out some ancillary oracle software we purchased wouldn't work without yet more oracle middleware to integrate back to the EBS suite.

    Then, once they purchased Sun, the performance / processor license vs the cost of said licenses basically incentivized us to invest in slower, bulkier servers through absurd processor core multipliers which differ based on the kind of CPU you used.

    Oracle sales are the mob, for sure!

  9. Re:Oracle Auditing by thegarbz · · Score: 3, Funny

    What are you talking about SAP is the best thing you can do for your business.

    You'll lose track of finances and accounts owed and your business expenses dramatically decline as a result.
    The trick is to work with suppliers who also use SAP and then they'll lose track of the fact you haven't paid their bills.

  10. Re:Oracle Auditing by JustAnotherOldGuy · · Score: 3, Funny

    Are you talking about the project, or the operational use?

    Yes.

    --
    Just cruising through this digital world at 33 1/3 rpm...
  11. Sounds familiar.... by erp_consultant · · Score: 3, Insightful

    I recall being on an implementation one time where Microsoft had given the client a sweetheart deal on SQL Server. Basically gave it to them for free. So right in the middle of the project they decide that we are switching from Oracle database to SQL Server database. In the Enterprise Software game this is a big deal.

    Since Oracle also owns the application software, as well as the database, the SQL is written optimally for Oracle. While they support other DBs like SQL Server and DB2, the bug fixes arrive earlier for Oracle. We had to tune every line of SQL, every query, every report. Reports that took 30 seconds to run in Oracle were taking 5 minutes to run in SQL Server. We got it done in the end but it was basically a nightmare.

    I see others on this thread saying just switch to Postgre SQL. If it's not tied to back end applications that are also from Oracle then sure, it might be a viable option. When you are running Enterprise software that is essentially running your entire business (HR, Payroll, Financials, Inventory, Logistics, etc.) then it is going to be a very tough sell trying to convince your CIO or CEO to switch to a different database platform. The risk is simply too great. Most likely you are going to be told to suck it up and make it work.

    Oracle, of course, knows this and that is what allows them to get away with these strong arm tactics. I suspect this is a large part of the reason they got into the Enterprise software business in the first place. It gets their hooks further into the client and makes it all that much more difficult to exit. It is also part of the reason that they are taking the threats from Workday and other cloud vendors so seriously. It is one of the few ways that companies can escape the clutches of Oracle and still run their business without undue risk. Now, cloud software presents risks of its own but that's another discussion for another day :-)