Oracle’s cloud growth hinges on overcoming “deep-rooted mistrust” of its core customer base.
That’s according to software-licensing pressure group, the Campaign for Clear Licensing.
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“If Oracle does not address these concerns then the company’s ability to meet its stated $1bn cloud sales target next year, together with the longer term outlook for its cloud computing business, will remain in doubt,” the group has written in an open letter to Oracle and its former chief executive Larry Ellison.
According to CCL press releases from last year, Oracle’s licensing practices are unclear and enforcement and audits are unhelpful.
The group published a survey in November claiming businesses view their relationship with Oracle as “hostile” and are “filled with deep-rooted mistrust.”
CCL has now followed that up with a series of seven steps in its open letter, which it claims customers want Ellison’s software giant to follow.
The top-most request is strategic focus – that Oracle focus on customer satisfaction and the “relationship” rather than pure audit revenue.
CCL's open letter also calls for greater clarity on audits with customers having had enough of getting passed around between individuals and departments inside Oracle at audit time.
The pressure group doesn’t say how or why Oracle’s cloud goals are at risk should the company not follow its advice; rather, the implication is existing customers would use the break in IT infrastructure provision afforded by the switch to cloud to pack up and move to new, online suppliers.
Competitors are arranged on the platform, application and infrastructure side of cloud – from Amazon and NetSuite to Workday and Salesforce.Yet cloud is Oracle’s fastest growing business – in spite of the supposedly poisioned relationships.
Cloud grew 45 per cent year on year to $516m in the second quarter, as reported in December, with cloud revenue spanning PaaS, SaaS and IaaS.
It’s sales of new Oracle software that’s really suffering – and hurting the company – falling 3.6 per cent year-on-year. Yet they still netted the company $2bn, eclipsing cloud income.
Customers are not totally out of love with Oracle on-prem gear: updates to existing licenses grew 5.6 per cent to $4.8bn.
Typically, Oracle takes a tough line on charging and licensing – not compromising unless you're a massive customer with the upper hand.
Oracle is no different to another big software provider. Its biggest business apps rival, SAP, is undergoing exactly the same transitional pain: fast growth but small numbers in cloud versus a massive, multi-billion-dollar core business that's floating. Neither is Oracle different to any other big software provider in terms of its approach to licensing and audits.
The question is whether Oracle will continue to uphold its traditional imperviousness to customers' fear and hatred of licensing and audits at this critical transitional time. ®