Now that we are quickly approaching Oracle’s H1 fiscal end (Nov 30), the time is right to revisit Oracle behaviors that can impact your bottom line in ways you may not have thought of previously, or at least haven’t had to think about in a long time. With COVID-19, remote workforce issues, and the myriad of other distractions facing organizations now, it is easy to forget how we can slowly be taken advantage of by suppliers. One of these areas of concern is around the increased cost, hassle, disorganization, and general anger created by Oracle’s siloed sales team(s). With the multitude of competing interests from one company vying for your budget, there is only one winner: Oracle’s bottom line.
Who they are:
First, a bit of context on the Oracle sales organization:
- 36,000 out of 135,000 employees are sales and marketing or 27% (Oracle disclosures)
- $8.1 Billion is the amount spent by Oracle in fiscal 2020 on sales and marketing (Statista)
- Reps sell literally hundreds and hundreds of Oracle ‘products’ (Oracle A-Z)
- 21+ acquisitions since 2016 (NetSuite, Data Science, Iridize, etc.) (Acquisitions A-Z)
- Divided into several divisions around: Infrastructure, Application Development, Cloud, Industry (Banking, Healthcare, Retail, etc.), and Enterprise Applications.
- Work with 20,000 partner companies
- Operate in over 50 countries
While this may seem like Oracle’s brag sheet, it is really meant to illustrate all the competing elements within their own organization. Many of those divisions, geographies, and employees listed above have their own sales targets, year-end objectives, and leadership teams whose only common goal is to extract as much revenue from customers as humanly possible.
How they work:
Most of these product areas (Infrastructure, Cloud, etc.) are given their own quota and sales revenue numbers to hit both quarterly and annually. In turn, their associated salespeople (or specialists) are tasked with individual quotas. They hit the ground running to meet and exceed quotas, regardless of the conflict that may arise, or how it may negatively impact their customers. Almost all deals will be assigned a specialist that will have to be engaged at the onset of each new deal. Each of these specialists and their respective divisions have their own sales objectives and incentives.
As with any sales organization, compensation drives behavior. You can compensate people to be team players and respect customers’ organizational hierarchy, or you can pay them to relentlessly push products whenever and wherever possible regardless how it may sub-optimize customer spend. Given our experience, Oracle is more the latter than the former.
What’s it looks like:
Here are just a few examples of what the conflict might look like:
- Product: Database sales representative is selling his own product set and does not speak to or care what the Oracle cloud guy is saying, doing, or selling to the same account.
- Geography: Oracle reps in EMEA have their own quota and are not generally concerned with the quota of a rep in North America – even when it’s the same global company both are calling on.
- Sales Division: You may have regional sales reps selling into a small division of a much larger company who are unconcerned with what the customer’s global strategy is.
Where does this leave you – the customer:
Using an American football analogy, it’s akin to being on offense having just a center and a quarterback, facing a fully formed 11-person defense. You likely aren’t going to get very far and will be left cleaning up a mess. The mess in these cases take many forms:
- Duplicate products and licenses being purchased
- Products purchased outside of global/corporate agreements
- Overlapping product capabilities (i.e. we already pay for a different product that covers the same requirement)
- Paying for products ad-hoc that if bundled, would be much less expensive
- Regulatory and compliance risk as rogue operators set up shadow IT with competing supplier sales representatives
- Relationship problems when your assigned lead rep is powerless to control any of the above on your behalf
All the above amounts to increased cost, risk, and overall hassle that no one really needs in 2020. We have outlined the things to watch for when dealing with the myriad of Oracle salespeople and product specialists, but it takes a very disciplined supplier management governance process to mitigate all of it. In addition, you need to have an internal reporting structure that bubbles potential issues to the surface immediately so they can be addressed to eliminate exposure.
NET(net) has been working with our Clients to optimize Oracle spend since 2002, and we’re certain we can help you as well. Whether it is around any of the above issues or related to agreements, pricing, terms, audit issues, or really anything at all – we’re here to help. Contact us today to arrange a meeting with a subject matter expert.
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