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Main article about the company: Oracle
- Oracle Cloud - Public Cloud
- Oracle Cloud Platform is a scalable application consolidation platform.
- Oracle Database Cloud Service
2021: Massive executive departures due to 'culture of fear'
In early June 2021, details were revealed about the attitude of the head of Oracle Cloud Infrastructure Clay Maguirk to his subordinates. Sources of Business Insider claim that Maguire's leadership style includes insulting, humiliating and suppressing colleagues and employees, and a culture of fear reigns in the cloud division.
Maguirk's leadership style was mentioned in a pair of lawsuits filed by former Oracle Cloud Infrastructure vice presidents against the company and its executive, including a claim that Maguirk once told an executive that his actions were "f * * * ing stupid" in front of all senior Oracle Cloud Infrastructure management. One of the former vice presidents who sued Oracle committed suicide in April 2021.
One of the sources in a conversation with Business Insider noted that the case mentioned in the lawsuit reflects reality rather gently. Maguirk preferred to insult employees in a large group, rather than in private, "adult men brought to tears." In an upset state, the head of Oracle Cloud Infrastructure could offend both personally and professionally.
In total, more than 10 current and former Oracle employees and executives said Oracle Cloud Infrastructure has what has been dubbed a "culture of fear." Maguirk is known for trying to get things done by "suppressing" employees emotionally.
In total, more than 10 thousand employees work in the cloud division of Oracle. On Maguire's leadership style, some workers agreed to speak on condition of anonymity over concerns that the remarks could negatively affect their careers. Oracle declined to comment on Maguirk's actions or the Oracle Cloud Infrastructure culture.[1]
2020
Oracle launches first data center in Chile
At the end of December 2020, Oracle launched the first data center in Chile, so that customers and partners of the company from Latin America received regional access to many Oracle cloud services.
 | The new data center will not only improve the quality of service for our customers, but will also have a positive impact on the country's innovative ecosystem and help stimulate the digital economy, said Luiz Meisler, executive vice president of Oracle Latin-American. |  |
Oracle chose Chile as a strategic region because the country was a pioneer in adopting public cloud services with high customer demand. Investment in Chile's cloud infrastructure is expected to grow 41% by 2024, much faster than in other regions of Latin America.
The new cloud region will provide Oracle Cloud services including Oracle Autonomous Database, Kubernetes, Oracle Cloud VMware solution, Oracle Cloud Infrastructure and Oracle Cloud Applications services. Many benefits will be received by customers working in highly regulated industries with restrictions on access to servers outside the national territory. In addition, the opening of the first Oracle data center in Chile will have a positive impact on other Latin American countries such as Argentina, Peru, Uruguay, Paraguay and Bolivia.
Oracle Chile Cloud includes several independent domains, which will allow customers to deploy high-availability applications, and is also connected to a separate site in Sao Paulo (Brazil) and other Oracle cloud centers through Oracle Cloud's private high-speed environment. This will enable organizations to deploy cloud services to multiple independent regions for disaster recovery, and to host and store all transactional data in that region.[2]
Oracle caught in coercion and bribery of customers to develop cloud business
In February 2020, the German asset management company Union Asset Management (their total size exceeds 359 billion euros) sued Oracle, accusing the American IT giant of "systematic coercion and bribery" of clients in order to develop its cloud business.
Oracle founder Larry Ellison, late ex-CEO Mark Hurd, head Safra Catz and former head of Oracle's cloud division for cloud technology Thomas Kurian appear as defendants in the lawsuit. Each of these people, according to the plaintiff, were "strongly motivated to fraudulently inflate cloud revenue with the help of rigged transactions (in order to artificially inflate the value of shares)." As a result, the company "deceived investors about the true sources of the critical cloud revenue stream, their nature and quality."
The authors of the complaint also say that Oracle was late with the sale of SaaS and IaaS solutions, so the company was under pressure from shareholders who wanted the rapid growth of the cloud business and the attraction of large customers.
Under this pressure, Oracle decided to resort to a strategy called Audit, Bargain, Close (ABC; Audit, Exit, Closing). The company installed its software in the client ecosystem with pre-activated settings, due to which the customer, without knowing it, violated the terms of the license.
| | After the customer fell into this trap, Oracle began auditing local software for license violations. When they were, Oracle began to threaten with large fines. The company then offered to reduce or cancel fines altogether in exchange for the client agreeing to purchase a short-term cloud subscription that he did not want to use, according to a 164-page court document. | |
The lawsuit also cites an internal email Thomas Kurian sent to other senior executives. The top manager complained about the Oracle Human Capital Management Cloud interface and asked to fix all the shortcomings as soon as possible so as not to lose customers.
| | I want to make sure that the entire HCM development team understands that your user interface is a shame, you need to admit it. I still get a lot of pressure from two CEOs and Larry Ellison, who say that the interface is illogical. The interface of the key product is terrible. Until you collectively recognize the mess that you made and the need to move quickly, we will just chat about nothing, "Kurian said in a message. | |
The then head of the cloud business said that Oracle lost a large client - the Dutch bank Rabobank - only because of the terrible interface.
Oracle says that the complaint is largely based on reports from the press and from analysts, and therefore it is "meaningless," and the company will defend itself in court.
Representing Union Asset Management, lawyers argue that Oracle should have disclosed its methodology, called ABC, under strict ASC 605-25 financial reporting rules. In addition, it is reported that Oracle management earned on the sale of shares at inflated prices, which were established due to investor misinformation about the performance of the cloud business.
The lawsuit was filed in federal district court in California, and this is the third complaint. The first two judges rejected, finding the evidence of the prosecution insufficient, but he retained the possibility of filing a new application when convincing evidence appeared.[3]
Oracle launches new data centers in 5 countries
In early February 2020, Oracle announced the opening of new cloud data centers in five countries. Data centers were launched in Jeddah (Saudi Arabia), Osaka (Japan), Melbourne (Australia), Montreal (Canada) and Amsterdam (Holland).
The company expects that by the end of 2020 its data centers will be located in 36 regions against 21 by February 4. In particular, it is planned to launch new data centers in Saudi Arabia and the UAE.
According to Clay Magouyrk, executive vice president of development at Oracle's cloud division, the new data privacy rules in the European Union and elsewhere suggest that many companies should store data in the country where it is created, so it is important to offer them a wide range of locations with data centers.
Oracle aims to have at least two "regions" in each country where the company operates (the geographic area of one or more data centers), one of which is the main and the second is the backup.
According to edition SiliconANGLE, Oracle, she became the first provider of public cloud services with data centers in Saudi Arabia. However, the cloud business of the American company is smaller than that of competitors. For example, Microsoft has data centers in 56 regions, Amazon Web Services (AWS) facilities cover 22 regions and 66 so-called "availability zones."
Amazon Web Services and Microsoft are the largest cloud service providers, accounting for roughly two-thirds of the global market, according to 2019 analysts at Forrester Research. Oracle's stake has not been specified.
Oracle is focused not only on expanding the geography of data center launch, but also on working with other cloud companies to provide a "unique multi-cloud interconnect," said Oracle Product Management Director Andrew Reichman. In particular, such an agreement is valid between Oracle and Microsoft.[4]
2019
How Oracle sells products that don't exist
In early December 2019, former Oracle cloud project manager Tayo Daramola sued the company, claiming that it sold non-existent or defective products as part of a cloud service designed for universities. Daramola, who reported the fraud, lost his job and is now trying to sue the American IT giant for compensation. Read more here.
Recruitment of about 2 thousand employees to expand the cloud business
On October 8, 2019, Oracle announced the recruitment of about 2,000 specialists for its cloud business. The new personnel initiative is global in nature and is designed to launch the American company's cloud services in countries where they were not previously available.
Oracle has created jobs related to business operations, software development, and cloud infrastructure maintenance.
| | Cloud computing is still in its early stages of development. So far, their penetration is less than 20%, and companies are just starting to use clouds for critical workloads, says Don Johnson, executive vice president of Oracle Cloud Infrastructure. - Our active hiring and growth plans are designed to meet the needs of our customers, ensuring they are reliable, productive, and secure as they migrate to the clouds. | |
The involved specialists will be engaged in the creation and launch of cloud services around the world. Oracle intends to open 12 new cloud regions in addition to the 16 that the company has by October 2019. By the end of 2020, it is planned to increase the number of such regions by 20 and bring their number to 36. They will be opened in Chile, Japan, South Africa and the United Arab Emirates, as well as other countries in Asia and Europe.
A region refers to a set of data centers deployed within a geographical area and interconnected by a dedicated regional network with a low delay. In other words, customers in a particular region can get faster access to cloud services than if it were carried out from data centers far from them.[5]
Integration of Microsoft and Oracle Cloud Services
On June 5, 2019, Microsoft and Oracle announced a tight integration of their cloud services. With this collaboration, the companies are looking to attract more large customers and confront Amazon, which is leading the cloud market. Read more here.
Why are customers afraid to switch to Oracle cloud services? Company forced to cut staff
At the end of May 2019, it became known about the layoffs at Oracle. The cuts could be due to the company's challenges in the cloud computing market. Customers would like to start using clouds, but are afraid to choose a competing product.
Users of Oracle products installed on computers would like to transfer software to the cloud infrastructure, but many of them are afraid to choose competing services and therefore postpone migration. Customers fear data loss during and after migration, server failures, hacker attacks, etc. However, most customers fear Oracle's "audit" if competing cloud services such as Amazon Web Services are used.
An audit refers to an audit conducted by Oracle to identify violations of the license agreement. If the manufacturer finds them, it can fine the client or completely prohibit the use of Oracle software.
This is stated in a study by Apps Associates, which is a partner of Oracle and Amazon Web Services. In different countries, 300 IT managers working in large companies were interviewed (their annual revenue ranges from $100 million to $5 billion) and using Oracle's non-cloud applications.
The terms of contracts with Oracle and other large IT vendors are often very difficult. Therefore, there was a whole consulting industry called software asset management. Providers of such services help companies conclude contracts with software manufacturers, avoid audits and fines.
58% of Apps Associates survey participants said that they are very or to some extent concerned about the revocation of software licenses if they use cloud services not from Oracle.
55% of respondents fear audit, and almost half of respondents fear the termination of Oracle technical support, which usually includes troubleshooting in case of failure, as well as providing updates and fixes for security bugs.
App Associates experts recommend that Oracle customers thoroughly study the terms of contracts and look for items on the use of other cloud services. However, the tech giant deliberately makes its contracts vague and difficult, which provides it with advantages when controversial situations arise, they note.
According to Business Insider, about 300 employees of the Seattle office, which serves as one of the main centers for cloud product development for Oracle, fell under the reduction. The layoffs were part of a massive personnel purge that affected several thousand workers, including members of cloud teams.
The elimination of working positions in Seattle turned out to be noticeable, since these specialists were heavily relied on in Oracle's work in the cloud market. Business Insider writes that Oracle's cloud division has a not entirely favorable working environment, as teams in Seattle and San Francisco are in conflict with each other. In particular, they are fighting to get the equipment they need to run cloud services. It takes weeks and sometimes months to supply this equipment, and the company also reduces the cost of it. In January-March 2019, equipment purchases from Oracle decreased by 14% compared to the same period in 2018.
Over the years, Oracle has announced its ambitions to compete with Amazon Web Services (AWS), Microsoft Azure and Google in infrastructure for cloud services, according to GeekWire. However, it did not make noticeable progress in achieving this goal and in 2018 stopped disclosing the indicators of the cloud business amid a slowdown in its growth. There is one important issue.
2018
How Oracle sellers earned $1 million in interest from cloud deals
In August 2018, new details of how Oracle imposed its cloud products on customers became known. Some sales managers were frankly brazen.
One of the sales people at Oracle, who worked for the company for several years, told Business Insider about the "proven" scheme used by employees to implement cloud services and receive rewards tied to these products.
Staff coerced customers into buying cloud solutions even if they weren't required. For example, customers were offered discounts, thanks to which the total value of the contract was reduced, even after unnecessary clouds were included in it.
It is noted that this was a common practice when products were sold in kits. Customers tested them for free and then could conclude full-fledged contracts. Moreover, other cloud providers did this.
| | Every week there were thousands of deals where customers were bought more than they needed, "the Oracle employee said. | |
There was another cloud sales stimulation method practiced at Oracle in 2014-2015. It could affect the company's fiscal 2018 results and be one of the reasons that prompted Oracle to stop making cloud revenue public.
This was told by former Oracle Vice President Craig Guarente, who by August 2018 heads Palisade Compliance, specializing in Oracle software delivery, license management services and technical consulting. Oracle earns three times more on support and license renewal services than on new product sales. The company binds customers to such its services through strict terms in contracts, Guarente says.
However, customers could opt out of often unnecessary (all or part of) support services. To do this, they were offered to buy cloud services in exchange for discounts on software. Contracts were typically for three years, and given the discount, customers paid less for them than if they used software and support services without buying access to Oracle's cloud infrastructure.
At first, Oracle sellers proposed replacing support services with cloud services in a one-to-one ratio. That is, for every dollar saved on software services, the client had to transfer one dollar to the account for using cloud solutions. Then the demands were raised: every dollar for technical support was equal to two "cloud," points out Craig Guarente.
If the client does not want to use Oracle cloud computing, then after the expiration of contracts, cloud revenue ceases to flow to the company's balance sheet. Moreover, according to Business Insider interlocutors, many cloud contracts signed under duress ultimately did not result in customers really starting to use cloud services.
In 2018, Oracle unexpectedly changed its financial reporting structure and combined revenues from sales of cloud services and traditional software installed on users' computers into one line. Thus, the company stopped publishing cloud revenue, which has become critical for the future American vendor, the newspaper notes.
Oracle co-chief executive officer Mark Hurd called the changes to the financial statements "paltry" and attributed them to the introduction of new accounting standards.
An Oracle employee in a conversation with Business Insider expressed confidence that the new reporting structure is designed to hide the fact that not all cloud revenue includes cash receipts from customers who actually use Oracle Cloud.
According to the employee, some sales specialists could earn $500 thousand and even $1 million by imposing unnecessary cloud services. As for executives, they often either didn't know when such deals were being struck or looked at them through their fingers. Craig Guarente said top executives "hated" such deals for obvious reasons.
At the same time, one of Oracle's workers claims that some executives, at the risk of their careers, forced their subordinates to make unfair transactions with customers in order to fulfill the plan. If they didn't agree to it, "their life could be hell." For example, unruly employees could be sent to other departments or divisions located in other cities. Or managers began to find a lot of fault with them when concluding contracts, as a result of which it became impossible to work at Oracle.
According to Business Insider, in August 2017, Executive Vice President Rich Geraffo, who is responsible for selling Oracle products in North America, sent a letter to his subordinates demanding that they stop unfair practices when selling cloud products.
Geraffo stated the need to "conclude contracts honestly" and outlined a long list of things that sales specialists categorically cannot do. They were allowed to sell only the software and services that customers will actually use. In addition, sellers were obliged to document all terms of transactions and justify discounts provided to customers.
Oracle said that the company prohibits the practice in which payments for software support were reduced due to transfers for Oracle Cloud services.[6]
Oracle sells cloud services through coercion and threats
In August 2018, Oracle shareholders filed a class action lawsuit accusing the company of providing deliberately false information regarding its business performance. The plaintiffs allege the enterprise software maker is imposing its cloud services on customers and lying to investors.
The statement of claim, sent to the court in San Jose (California, USA), says that, talking about the factors contributing to the growth of the cloud business, Oracle management pointed to "an unprecedented level of automation and cost savings" that allegedly provide the company's services.
In fact, the corporation used coercive and threatening tactics when implementing cloud products, resulting in an unsustainable business model that ultimately failed.
| | The use of such tactics hid the lack of real demand for Oracle cloud services, making growth unstable, and ultimately led to the loss of customers, according to the lawsuit, which was joined by several large investors, including the City of Sunrise Firefighters pension fund. - Among other things, the company threatened its customers with "auditing" the use of non-cloud software licenses and reduced technical support, unless they agreed to move their business to Oracle cloud programs. | |
The plaintiffs argue that the tactic was not known to investors, and Oracle itself vehemently denied using it. Top executives lied in their statements at investor conferences and during conference calls after the release of financial results, when they said that customers were rapidly implementing cloud products, and Oracle's revenue from this business was growing faster, the plaintiffs said.
Due to the use of unfair methods of selling their products, according to the authors of the lawsuit, investors lost money after Oracle published financial results and a forecast below expectations in March 2018.
Oracle spokeswoman Deborah Hellinger told reporters that there is no evidence on the merits in the lawsuit and the company will defend itself against these unsubstantiated allegations.
Until the fourth quarter of fiscal 2018, Oracle regularly disclosed revenues in various segments of the cloud market. After the company stopped publishing this data, its shares fell in price.
In June 2018, the Financial Times wrote that over the past year, the growth rate of Oracle's cloud business, which accounts for about 15% of the company's revenue, has halved. That led to a series of downgrades in earnings forecasts on Wall Street.
One of the chief executive officers of Oracle Safra Catz explained to investors that the company changed its financial reporting structure due to the transition to a new business model that blurs the boundaries between cloud computing and traditional software installed on customers' computers.
The corporation introduced the so-called practice of using its own license (BYOL). It assumes that customers continue to use the traditional software distribution model (making advance payments for licenses to products and then regularly paying for support services) and retain access to software through the cloud.
| | Right away I want to say that we do not hide anything... We have no bad news, "Katz said at a conference with analysts, answering questions about the cessation of publication of cloud business indicators, in June 2018. | |
She said that in March-May 2018, Oracle's cloud revenue reached $1.7 billion.[7]
Oracle to Trump: Pentagon cloud government contract sharpened for Amazon
In April 2018, it became known about a conversation between the CEO Oracle Safra Katz and the president USA Donald Trump about a multi-billion dollar cloud contract. Pentagon She complained that the tender was sharpened under. Amazon The head, states who has repeatedly expressed a negative attitude towards, Amazon promised fair bidding. More. here
Launching an accelerator for cloud startups in Israel
On January 16, 2017 Oracle , it launched a cloud development program startups in. Israel American The corporate manufacturer software plans to launch similar projects in other countries.
Oracle has formed an accelerator in Israel for startups developing or using cloud technologies. Start-up companies that become members of the program can expect six months of support from technical and business experts, access to advanced technologies and Oracle customers, partners and investors. The project is being developed under the guidance of a team of Oracle researchers and developers, the news agency reports. Reuters
The accelerator was created on the basis of a scientific and innovation center, built in 2003 together with the Israeli authorities in order to assist startups in the early stages of their development. A total of 36 companies were based in this center at different times, which accounted for more than $150 million in ROI.
The cloud start-up support pilot program was initially launched in India. In the future, Oracle is going to open a number of similar centers around the world. The corporation did not specify how much is planned to be invested in each such project, and only named the approximate amount of investment - several million dollars for each program.
| | The next 5-10 years of innovation and growth promise to be driven by new business ideas based on, "said Reggie Bradford, cloud computing senior vice president of product development at Oracle. | |
According to Thomas Kurian, President of Product Development at Oracle, the company is committed to creating a favorable ecosystem for startups around the world.[8]
2016
Ex-accountant's accusations of overstating cloud revenue
On June 1, 2016, former Oracle accountant Svetlana Blackburn sued the company, accusing it of illegal dismissal due to unwillingness to participate in rigging financial results in the cloud business, Reuters reports.
The lawsuit was filed in District Court in San Francisco. In her complaint, Svetlana Blackburn said Oracle executives required her to "insert square data into round holes" to improve the performance of the Oracle Cloud Services division. Read more here.
Cloud business growth claims by 36% to $2.85 billion
The fall in sales of traditional Oracle software and equipment at the end of fiscal 2016 contrasts with the strong growth of the cloud business. Its volume in 2016, according to financial reports, rose by 36% compared to 2015 and exceeded $2.85 billion. This includes the implementation of SaaS, PaaS and IaaS products.
In March-May 2016, the number of Oracle customers using the company's Solutions SaaS increased by 1,600. The number of PaaS users has increased by more than 2000, said Oracle CEO Mark Hurd.
Oracle Chairman Larry Ellison said that the "hypergrowth" of the SaaS and PaaS business, which took place in fiscal year 2016, will last in the next years, which will allow the company to become the first cloud company with revenue of $10 billion in the SaaS and PaaS market.
2015
Tenant eviction scandal for Texas cloud center
On December 23, 2015, former residents of the Lakeview Apartments 295-apartment economy apartment complex in Austin, Texas, USA, staged a protest against the illegal eviction that took place at the initiative of Oracle. The online edition PCWorld writes about this.
In December 2015, Oracle announced plans to build a completely new cloud development center with an area of more than 52 thousand square meters in Austin and buy out the Lakeview Apartments building, which is planned to be reconstructed to accommodate employees of the new campus. As part of this project, the corporate software manufacturer intends to increase its staff in Austin by 50%, largely to organize direct sales of cloud services.
However, the construction of the facility is accompanied by a major scandal. The fact is that back in June 2015, Cypress Real Estate Advisors, which owns the Lakeview Apartments building and places tenants on loan, notified them of the need to leave the apartments by September 30. In case of refusal, tenants were threatened with blackouts of electricity and water supply. As a result, about 100 low-income families by US standards were evicted.
Many of them have not yet expired their lease, and Cypress Real Estate Advisors refused to return the paid money. According to some Lakeview Apartments tenants, they can't find a new rental apartment at the same price as they were in the past - a difference measured in the hundreds of dollars. In addition, 225 children were forced to change school and kindergarten.
Disgruntled people took to the streets of Austin in protest. They ask for help from the Oracle and the city authorities. According to Texas Rural Legal Aid lawyers, it was not Oracle that was to blame for the incident, but the owner of Cypress Real Estate Advisors, who quietly agreed to sell the property and did not help his tenants find a new residence.[9]
Oracle imposes cloud products
In July 2015, it became known that Oracle is imposing sales of cloud products even to companies that do not need these solutions and do not want to purchase them. Its former employee Craig Guarente told reporters about the aggressive policy of the American company.
According to him, Oracle customers who want to make changes to the contract (for example, increase the number of license users or add new services) face a so-called audit of the contract, under which the American corporation can file a claim for non-compliance with the terms of the agreement and force them to purchase its commercial cloud products as punishment.
In case of failure, the client risks losing the ability to use Oracle software within 30 days. In many cases, switching from company decisions to others is very problematic, as it can take years. So the customer is forced to follow the conditions of the vendor.
It is noted that an audit of any actions that do not comply with the established requirements may cause dissatisfaction with Oracle. As a result, the manufacturer forces the guilty companies to conclude long-term contracts for Oracle Cloud products, even if the client does not work with cloud services and does not need them.
Oracle sales managers receive seven times higher deductions for such imposed contracts compared to other products, Guarente said. Oracle did not deny such a bonus scheme, but at the same time refrained from informative comments, limiting itself to the following phrase: "We have incentive reward systems."
Craig Guarente worked at Oracle for 16 years, during which time he rose through the ranks to global vice president in charge of contracts, business practices and audit issues. In 2011, he founded the firm Palisade Compliance, which provides advisory services in the field of Oracle software asset management.
Until 2015, Oracle was not highly active in imposing cloud products, Guarente said. In 2015, the company has already used this sales method several times, said its former senior employee, without specifying the names of customers who were forced to subscribe to the cloud offers of the manufacturer[10].
Plan to move most products to the cloud
On April 24, 2015, it became known about Oracle's plans to transfer almost all of its products to the cloud. Thus, the American company decided to change its business model to match the changes in the market.
"We are still investing in a large number of traditional products. At the same time, we are moving at incredible speed to move all these products available now to the cloud, "Oracle CEO Mark Hurd told Bloomberg.
As of the end of April 2015, about 65% of Oracle solutions are available in the cloud. By October of that year, the plan is to increase that share to 95%, Hurd said.
Oracle chief says 95% of the company's products will be cloud-based by October 2015
As noted in the publication of the publication of April 24, 2015, for many years Oracle built its business on the sale of contracts for its software installed in its data centers, earning from the support of this software. However, the company is increasingly turning to the scheme of selling products via the Internet, thereby competing with such fairly young vendors as Salesforce and Workday, as well as eminent players, including Microsoft and IBM.
According to the results of the third fiscal quarter, which ended on February 28, 2015, Oracle's cloud business, which takes into account the sale of SaaS, PaaS and IaaS solutions, brought the company revenue of $527 million, which is 29% more than a year earlier. By comparison, Amazon's Web Services division provided Amazon with $1.57 billion in revenue in the first calendar quarter of 2015.
"Our cloud business is growing much faster than I expected," said Oracle Chairman Larry Ellison during a March 2015 conference on the company's quarterly earnings.
In 2015, Oracle will be able to earn more from selling SaaS and PaaS products compared to Salesforce.com., Ellison said.
Safra Catz, who took this position with Mark Hurd after Ellison resigned as head of Oracle, says that by 2020 the company will be able to receive $5 million from each $1 million in PaaS sales.[11]
Cloud Market Success Statements
In mid-January 2015, Tech Pro Research published a note in which observers talked about Oracle's success, strategy and plans in the cloud market.[12]
According to journalists, the main tactic of running Oracle's cloud business is to provide as many services as possible, including applications, platform and infrastructure. An integrated approach, also practiced by an SAP competitor, is bearing fruit.
For the first half of fiscal year 2015, which ended on November 30, 2014, Oracle's cloud business approached $1 billion against $719 million a year earlier. In the SaaS and PaaS segments, the company's revenues grew by 36%, and sales of IaaS solutions jumped by 42%. The total number of cloud applications from the vendor exceeded 600.
An important role in this rise is played by acquired assets. Oracle has absorbed useful firms such as PeopleSoft and Siebel. One of the largest purchases dates back to 2014: then the supplier of information systems for retail and hotels Micros Systems was bought for $5.3 billion.
Later that year, Oracle announced the acquisition of Datalogix, a developer of technologies linking consumer spending at traditional points of sale to digital marketing. Using this deal as an example, Oracle showed how its cloud strategy functions.
Oracle uses all its tools to work efficiently
The company is committed to using all of its tools to make the most of the product - in the case of Datalogix, for the highest level of understanding possible for customers using digital and traditional channels based on what they do, what they say and what they buy.
Oracle President of Development Thomas Kurian, during his speech at the Oracle CloudWorld forum in New York (January 13, 2015), described the company's strategy as follows: "To offer browser-based business applications to any partner, client and everyone in the world."
As of early 2015, three-quarters of Fortune 100 companies are using Oracle Cloud solutions. More than 62 million customers of the American company use its cloud services every day, performing over 23 billion operations, said Oracle Price, senior vice president of Oracle's cloud business, adding that the company does not intend to stop there.
According to Price, Oracle is going to maximize customer demand for consulting services, as well as make it easier to deploy clouds and interact with the company during the entire collaboration period.
2012: Plan to get into the top three cloud software suppliers
Oracle wants to become one of the top three cloud software vendors in the world. This was stated by the head of the company Larry Ellison in early October 2012, speaking at the Oracle OpenWorld conference.
According to Larry Ellison, the company is facing systematic organic growth in the cloud application segment, because Oracle has been actively developing and will continue to develop this direction in recent years.
So about 80 transactions for the purchase of other companies totaling more than $50 billion were closed. And the result of these acquisitions was segment revenue of $31.6 billion in the first quarter of fiscal 2013.
Larry Ellison said in an interview with US channel CNBC that "over the next few years, senior management right down to individual programmers and sellers is targeting one thing: sales of applications, platform and infrastructure in the cloud."
This priority of the Cloud segment is due to the fact that, according to the president of the company , Mark Hurd, global data volumes will grow by more than 50 times by 2020, and most of them will be processed in the cloud, Reuters reported on October 3, 2012 . And having time to take a more significant share in this rapidly growing segment is important for the company. Considering this, Oracle's active developments in the direction of mobile applications, as well as applications for small and medium-sized businesses, the statement about the imminent entry into the TOP-3 of cloud software suppliers, which Ellison expressed, looks natural. Moreover, according to CFO Safra Katz, even if the company abandons its classic sales and moves only to providing cloud services, Oracle's net profit will not fall below $1 billion.
Safra Katz on October 5, 2012, at a meeting with analysts, said that the company plans to grow organically in the next 5 years by 20%, mainly through the provision of cloud services. However, analysts consider such a forecast too optimistic. So Bloomberg analysts are confident that a more realistic plan will include growth in the next 5 years no more than 10%.
The company also announced that in the near future it will focus on increasing dividends to its shareholders. However, despite cooling interest in M&A deals, according to Safra Katz, the company will not refuse an interesting offer if one appears on the market.
See also
Notes
- ↑ Oracle insiders say there's a 'culture of fear' in a key cloud unit, and executives are leaving
- ↑ Oracle opens first Cloud Region in Chile
- ↑ Oracle Sued for Allegedly `Systematically Coercing and Bribing` Customers
- ↑ Oracle opens new data centres in 5 countries, targets 36 by end-2020
- ↑ Oracle will hire 2,000 new workers to bolster cloud infrastructure business
- ↑ An Oracle insider explains how some salespeople gamed the system to sell more cloud
- ↑ Software giant Oracle accused of defrauding investors
- ↑ Oracle opens start-up accelerator in Israel for cloud innovation
- ↑ Oracle asked to help low-income residents evicted for its new cloud campus
- ↑ ixzz3hE0hw4Ib Oracle is using an ugly'nuclear option' to boost cloud sales, says consultant
- ↑ Oracle CEO Hurd Plans to Lift Almost All Products Into Cloud
- ↑ Briefing: Oracle's cloud strategy and the points to ponder
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