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

Posted by BeauHD on from the head-in-the-clouds dept.

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.

10 of 65 comments (clear)

  1. So, business as usual then by imidan · · Score: 4, Informative

    alleged that Oracle used software license audits and weakened existing maintenance programs to compel customers to buy the cloud products

    I mean... isn't that just Oracle's usual business practice? Not just for cloud products, but for whatever product they're trying to push when they perform an "audit"?

    1. Re:So, business as usual then by bungo · · Score: 4, Interesting

      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.

      --
      "The best part? I became an ordained minister while not wearing pants." -- CleverNickName
  2. My company is leaving Oracle by Rosco+P.+Coltrane · · Score: 5, Informative

    We have an Oracle DB for our ERP and our CRM, and we're currently actively investing in a fast-track program to switch database provider for that exact reason: Oracle have been auditing the living daylight out of us lately, asking for tons of extra cash, threatening to drag us to court, and being generally extremely aggressive over features and number of seats they seemed okay to provide as part of our original contract up to about a year ago.

    All the other Oracle customers I know are in the same position: they got so tired of Oracle's shenanigans they're all leaving in droves despite the cost.

    --
    "A door is what a dog is perpetually on the wrong side of" - Ogden Nash
    1. Re:My company is leaving Oracle by jaredm1 · · Score: 2

      Same story with 2 of my former clients - Oracle's tactics worked before because they had a pretty solid monopoly and customers were willing to pay. Now customers are looking at cutting costs and attracted towards cloud competitors that charge fractions of what Oracle charges and aren't anywhere near as aggressive with audits and sales. Oracle can still succeed but it really needs to throw away its current playbook - otherwise it'll be repeating IBM's mistakes when the mainframe era was coming to an end.

    2. Re:My company is leaving Oracle by StormReaver · · Score: 3, Insightful

      Unfortunately there are no other choices besides Microsoft and Amazon's cloud DynoDB.

      There's your first mistake.

      No geeks Mysql is not the same thing nor close...

      The thought of using MySQL for anything even remotely important should be enough to get someone fired and/or prosecuted.

      ...so don't bother bringing that up as these large customers use financial and AI reporting tools and APIs and not just simple SQL statements.

      What do you think these reporting tools are sending to the database, if not SQL?

    3. Re:My company is leaving Oracle by Billly+Gates · · Score: 2

      Most people here say just use MySQL and are dead serious without realizing what enterprise needs are. This is slashdot after all and free software is somehow always superior over proprietary. Anyway Oracles tools tie heavily into generated code all proprietary PSQL and PeopleSoft APIs and other Java code using again more proprietary Oracle calls. It really would be a complete rewrite to leave them which they took out of Microsoft's playbook.

      There is a reason companies love their Microsoft Surface books while consumers use other tablets. It is because of the tie in with the ecosystem infrastructure which MS monopolized 20 years ago so they can't leave it.

      It's cheaper to just pay the bribe and stick with a thousand papercuts of pain than to cut off a limb and upset the company shareprice in excess spending.

      --
      http://saveie6.com/
    4. Re:My company is leaving Oracle by BLToday · · Score: 3, Funny

      Unfortunately there are no other choices besides Microsoft and Amazon's cloud DynoDB.

      There's your first mistake.

      No geeks Mysql is not the same thing nor close...

      The thought of using MySQL for anything even remotely important should be enough to get someone fired and/or prosecuted.

      ...so don't bother bringing that up as these large customers use financial and AI reporting tools and APIs and not just simple SQL statements.

      What do you think these reporting tools are sending to the database, if not SQL?

      You’re bringing back nightmares. I remember dealing with MySQL back 1999 when the company I worked for tried to migrate to MySQL to save money. The horrors. Plus, MySQL is own by Oracle now. So it’s like going from the Oracle’s left pocket to Oracle’s smelly feet.

  3. gambling by bigtreeman · · Score: 3, Insightful

    Investing in the stock market is speculation
    AKA gambling
    don't complain when the house takes your money

    --
    Go well
  4. Re:For every company that leaves, two will join... by Billly+Gates · · Score: 2

    Companies did the offshoring. Some like Chevron still are while there is a big fight now back to in-source.

    All the companies that did this last decade lost money, had outages, had terrible experiences, and couldn't integrate their processes into their own as they did things their own ways and was a separate entity.

    You get what you pay for. After the CIO or CEO calls and gets someone in India asking if to restart his home PC or they loose $2,000,000 in outage to save $40,000 in salary they quickly reverse.

    --
    http://saveie6.com/
  5. First hand experience with Oracle extortion tactic by Anonymous Coward · · Score: 5, Informative

    Posting as an AC for obvious reasons.

    Long time ago someone at a company I worked for made a decision to use Oracle DB. That was the most expensive mistake in the history of the company. Here is the most recent episode of extortion.

    A couple of years ago one of our DB admins accidentally enabled Advanced Data Guard on all of our DB hosts. Oracle intentionally does not make it easy to discover when you enable features that you don't have licenses for. It was enabled for a few months and not used. We really did not use ADG and could prove it. We had to undergo an Oracle audit for an unrelated reason. The audit discovered these feature being enabled. In a reasonable world one would imagine that we would be asked to turn off the unnecessary feature and maybe pay something for it. But no. Oracle demanded that we licensed ADG for all our hosts. They did not care that we had no use for it. On top of that they forced us to buy they shitcloud. We ended up spending a lot of money buying useless ADG licenses and their good-for-nothing-cloud. And you know what, we never ever used it after we paid for it. We never even logged into their trashcloud. But the scumbags undoubtedly reported this racket as a legitimate sale.

    If you ever end up on an uninhabited island and need to use a database to get back home and Oracle being the only vendor there offers you its DB for free, use flat files instead. These people are despicable scum. Crooks. Never ever touch anything with Oracle label on it. Yes, it includes Java and MySQL.

    Don't take me wrong. Oracle DB, MySQL and Java are fine technologies. They are just owned by a company which is run by scum.