On-prem product sales canned for Cloud Architects
From Oracle’s new fiscal year, starting June 1, each Oracle customer will have a single account manager – instead of multiple managers for each Oracle product they use.
The re-org has been described as Oracle’s biggest for a decade. From the start of June there will be one account manager for each of Oracle’s Pillar products – database, middleware, BI and hardware. Pillar sales engineers are, as a result, being chopped and will be replaced by a breed of Oracle employee currently in short supply – enterprise cloud architects.
The exact size of the cuts is uncertain, but one report has Oracle preparing to cut up to two-thirds of its current sales force as soon as this summer. Oracle has a total head count of 136,000.
One Reg source close to Oracle said he was unaware of cuts, but confirmed the re-organisation would take place after the current, fourth quarter closes on May 31.
Word on the street has it that sales of Oracle’s traditional on-premises products to customer accounts deemed “mid-sized” are being handed over to Oracle Digital – the rebranded Oracle Direct. Oracle’s measure of mid-size varies from country to country, but generally covers the 100-150 accounts outside its top 35.
Accounts in this 100-150 bracket have up to now been served by Pillar Sales. This will now change.
Oracle Digital has offices in Dublin, Amsterdam and Malaga.
The change will not affect the major 35 accounts, as field sales will continue to handle them – although a few more accounts will likely be swept into the “major” category following the change. Such accounts offer Oracle the largest potential in re-occurring revenue – between them, they each hand $5.45m-$10.9m (€5m-€10m / £4.24m-£8.47m) to Oracle over a five-year period.
In an attempt to win more cloud business, Oracle is also recruiting heavily from its competition. It’s plucking both sales and engineering support staff from AWS, Google Cloud and Microsoft Azure. These hires are being offered plum salaries: with a basic in the range of $87,000-$130,938 (€80,000-€120,000 / £67,000-£102,000).
Ahead of the changes, Oracle sales are rushing to close deals – even bending their own internal rules, our sources say. One Reg source, an expert on Oracle’s audits, revealed customers have been sold Oracle’s Proprietary Application Hosting Rights.
Proprietary Application Hosting Rights is Oracle’s way of letting customers run their own unbranded and proprietary software delivered as a service to lots of end users and hosted on an Oracle back end.
But it’s understood customers have been allowed to run branded, third-party software under Proprietary Application Hosting Rights – which is forbidden under Oracle’s rules. Customers seem to have been offered Proprietary Application Hosting Rights as a way to control OpEx.
Another Reg source said Oracle Sales have been initiating renewal discussions on licences that do not expire until 2018. It seems to be an effort to pull the revenue into the current year. Our source said: “That’s not normal. Either Oracle is having a bad quarter or the sales teams know they will not have that account next year.”
Like many others, Oracle is seeing its fastest growth in cloud, while its legacy on-premises business – the vast majority of its business – is experiencing ongoing, slow decline. Cloud, which accounted for 13 per cent of Oracle’s revenue in the third quarter, totalled $1.1bn – an increase of 62 per cent.
The lion’s share of Oracle’s business – 67 per cent – was on-premises software, products such as database and applications. That category fell three per cent in the quarter year-on-year to $6.176bn.
Oracle would not provide a statement without a background briefing: “And in light of the fact this is a global story.” ®