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The CEO of Google Cloud told his former employees at Oracle that its cloud software was 'considered atrocious' and 'a disgrace,' according to an investor lawsuit

Feb 24, 2020, 23:52 IST
  • Veteran tech executive Thomas Kurian had led Oracle's cloud business before his surprising switch to Google two years ago where he is now CEO.
  • He apparently had a rough tenure as head of Oracle cloud where he berated executives who reported to him for work that he called "awful" and "atrocious," according to a shareholder lawsuit filed against Oracle.
  • "I continue to get extraordinary pressure from our two CEOs and LJE himself," Kurian said in an internal email disclosed in the lawsuit, referring to Safra Catz, Mark Hurd and Ellison. "The core product UI [user interface] is awful. Until you all collectively accept the mess you have made and the need to move quickly we are talking past one another."
  • Oracle rejected the suit's claims. "The suit has no merit and Oracle will vigorously defend against these claims," spokesperson Deborah Hellinger told Business Insider in an email.
  • Click here for more BI Prime stories.

Veteran Silicon Valley executive Thomas Kurian surprised the tech world two years ago when he suddenly left Oracle to become CEO of Google Cloud.

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The reason may have just gotten a bit clearer. Kurian apparently had an unhappy tenure as head of Oracle's cloud, according to a lawsuit. He felt pressured by top management, including Oracle founder Larry Ellison. And he clashed with his people at Oracle, berating execs who reported to him for work he considered "atrocious" and "awful," the lawsuit alleges.

The suit, filed on behalf of a group of investors led by Union Asset Management Holding AG, a Frankfurt-based investment firm, accused Oracle's top executives of painting an upbeat picture of the tech giant's cloud momentum in 2017 to 2018, even though they knew the company was falling behind in the cloud wars.

The suit was originally filed in 2018. The amended suit, which was first reported by the Register, was filed last week.

Kurian's email was part of a shareholder lawsuit before a federal court in California which claims that Oracle had misled investors on the state of its cloud business.

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Oracle rejected the suit's claims. "The suit has no merit and Oracle will vigorously defend against these claims," spokesperson Deborah Hellinger told Business Insider in an email.

Google could not immediately be reached for comment.

'A disgrace'

The suit cited Kurian's email in which he also told Miranda that Oracle's cloud software "was considered so atrocious" that it was simply "a disgrace."

The suit also cited an unnamed vice president in Oracle's cloud business who said that in some meetings, Kurian indicated that "potential customers were not buying Oracle's cloud products because the quality of the products was so poor." The suit also alleged that "Oracle's use of coercion and 'financial engineering' to boost its cloud revenues was highly misleading to investors."

The suit claimed that Oracle's misleading claims had an impact on the company's stock price. The suit said Oracle shares rallied 24% based on "Oracle's purported success in building a healthy cloud business." But the stock began sliding when "the market started to recognize that Oracle's purported cloud success was not genuine." Oracle shares have been on a rollercoaster ride since early 2018, but it was last up 10% since early 2018.

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'Critical strategic error'

The cloud, now the major trend in enterprise tech, allows businesses to set up their networks on web-based platforms, making it possible to scale down or even abandon private data centers. It is a fast-growing market now dominated by Amazon, Microsoft and Google - and one which, experts say, other traditional enterprise tech giants, including Oracle, missed.

That view was echoed by the suit which said: "In a critical strategic error, Oracle dismissed the cloud for years."

Oracle has been fighting back, and has said that it is on track to become a cloud powerhouse. But the shareholder suit essentially accuses Oracle leaders of lying about how its cloud counter-offensive was going.

"Having dismissed cloud technology for so long, its cloud-based offerings were inferior and its business lagged behind competitors, forcing Oracle to scramble to play catch up," the suit said. "Oracle's senior management was well-aware that the Company's cloud product was riddled with serious flaws, was not competitive with alternative cloud products, and was generating poor demand."

Read the Federal Shareholder Suit vs. Oracle

Got a tip about Oracle, Google or another tech company? Contact this reporter via email at bpimentel@businessinsider.com, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.

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