Oracle seems to be depending on aggressive sales tactics to boost revenues in its cloud computing sales, trying desperately to sever its dealings with on-premise software license sales, a complicated soup of various legal agreements tied to their products and services.
Of course, this tactic isn’t necessarily new, even for Oracle, but its sheer aggressiveness has been notable by the news-hungry tech media lately. Business Insider reportedly spoke to a consultant for Oracle who also was a sales executive at the software giant. The CEO seems to be in full support of this new creative and aggressive way of handling the software sales by getting full attention of the salespeople that peddle its cloud offerings to those that don’t even need or want them.
Oracle is using a “breach” method according to sources. Business Insider referred to it as the “nuclear option” in its new sales tactics. Bonuses and commissions are directly tied in with this new strategy as well. It involves paying higher bonuses and incentivizes the sales of Oracle’s cloud services.
The company took the method an aggressive step further by breaching out of contracts with enterprises that do not get cloud licensing over the on-premise. Even in a hybrid model, companies will choose to renew their agreements with the software company, rather than face the disastrous possibility that they would need to swap over to a new system. With an enterprise client, it isn’t an overnight process. It may take years.
Oracle has reportedly not been making the mark in quarterly reports for earnings and sales, but its cloud business is growing and they are trying to turn the tides by pushing their sales force into negotiating new contracts with cloud services that often aren’t desired or needed for the enterprise clients. It’s reported that for every million in cloud sales will be worth $10 million over a lifecycle of the service for each customer. One time sales net only around $3 million. Thus the focus on using license disputes to hammer the client into submission with the new license agreements.
Fortune reported that Oracle had once before pushed hardware sales quotas over software. It has also been reported that last month, Oracle began using software audits to push more cloud. They reportedly have been using the legal notice of breach notices that mandate contractual terms that, if not complied with, can render the software non-usable under license from Oracle.
High pressure sales will likely play a huge role in Oracle’s cloud strategy until things pick up steam at the company for their shareholders and investors.
