An Oracle insider explains how some salespeople gamed the system to sell more cloud
- A year ago, Oracle's massive salesforce received an email asking them to work with "integrity," setting out a long list of no-no's for salespeople.
- An Oracle insider and a former Oracle vice president explained some of the tricky things salespeople were doing to sell more cloud and make big commissions.
- It's hard to say what impact these deals had, if any, on Oracle's fast-growing cloud business, but the company did change its financial reporting in June to no longer break out cloud revenues.
- The whole situation gives us a detailed, inside look at the enterprise software sausage factory.
In August, 2017, Oracle's massive salesforce received an email from Rich Geraffo, Oracle's executive vice president responsible for North American sales.
In it, he told the 35,000-strong sales team to essentially quit gaming the system in the way they were landing cloud sales, according to the email viewed by Business Insider.
He discussed "winning with integrity," and set out a long list of no-no's for salespeople. The items included things like only selling products and services that customers will really use, putting all terms in writing, and justifying discounts offered to customers.
Some 10 months later, in June, Oracle surprised the financial world by changing the way it reported cloud revenue, blending it into its traditional software sales, which essentially hid cloud revenue from view. Oracle didn't wait until the fiscal year ended. It made the change to the fourth quarter results, which ended in May. That meant it did not report the full year's final cloud performance, even though cloud has become critical to the company's future.
When concerned Wall Street analysts asked if this change was an attempt to hide problems in Oracle's cloud business, Mark Hurd, one of Oracle's CEOs, called the change a "nothing burger," and attributed the change to adopting new accounting standards.
However, an Oracle salesperson who's been with the company for several years told Business Insider that the change could reflect something else: that not all of the cloud revenue was from customers who were really using Oracle's cloud.
It's not clear that there's a connection between the email from Geraffo asking salespeople to only sell products and services that customers will really use and Oracle's decision to stop reporting cloud revenue separately.
But the change in reporting does give us a reason to explore the tricks of the trade that may have helped Oracle jump start its most important new business.
'Cancel and replace'
One of the ways Oracle's sales people beefed up cloud sales - and their own commissions, which were heavily tied to how much cloud they sold - was a tried-and-true method, according to the salesperson. It involved including cloud credits on a customer's contract even if the customer didn't want the cloud product, this person said.
The customer would get discounts on the products they did want for ...
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