Oracle Accused of Defrauding Investors On Cloud Sales Growth (bloomberg.com)

An anonymous reader quotes a report from Bloomberg: Oracle is named in a lawsuit alleging the company's executives lied to shareholders when they explained why cloud sales were growing. The investor leading the case, the City of Sunrise Firefighters' Pension Fund, claimed Oracle engaged in coercion and threats to sell its cloud-computing products, creating an unsustainable model that fell apart, according to the suit seeking class-action status and filed Friday in San Jose, California. The Florida-based firefighter pension fund and other investors lost money when Oracle's stock plummeted in March after reporting a disappointing earnings report and outlook, according to the lawsuit.

The suit claimed that Oracle's executives lied in forward-looking statements, which are never guaranteed, during earnings calls and at investor conferences in 2017 when they said customers were rapidly adopting their cloud-based products and cloud sales would accelerate. The firefighter pension, which manages about $143 million for 235 participants, alleged that Oracle used software license audits and weakened existing maintenance programs to compel customers to buy the cloud products.

Comments

Re:So, business as usual then

[bungo]

No, this is worse than their normal business practices.

What they are doing is cannibalising their traditional on-premisis installations, where the customer runs everything on their on servers and have their own local staff, and forcing their customers to be locked into their cloud offerings, using Oracle's servers and Oracle's staff.

Oracle are giving huge discounts to customers to migrate to their cloud, and they are also giving huge commissions to their VARs and partners to sell cloud licenses. The customer initially has a lower cost, as they have a discount for a specific period, but after that, they are hit with the full cost forever.

This kills off all on-premisis servers, operations. Companies no longer need their skilled technical staff, and trust Oracle to do everything for them. No different from normal complete IT outsourcing, except they are trusting a corporation that has been proven in court to lie, cheat and deceive. Oracle will screw over anyone, from it's own staff, to it's VARs and customers to make a buck.

What is going to happen in the longer term is that they will run out of customers using on-premisis systems, so their cloud growth will stop. The Oracle technical staff will migrate to other technologies as their Oracle related careers disappear. When new database related projects come up, there will be no internal staff recommending Oracle, but other alternatives, such as postgresql, etc. Oracle's market share will continue to decline.

All for chasing the short term growth in the cloud services, playing catch up with the big boys like Amazon.