Oracle's Hardware Business Has Been A Mess -- Here's Who Employees Blame

Larry Ellison

Photo: Asa Mathat | All Things Digital

Oracle’s acquisition of Sun Microsystems sent the company’s sales organisation into a tailspin.Over the past year, “droves” of Oracle salespeople have fled the company.

We talked to about a half dozen employees in the past two months. Some came to Oracle from Sun. Some now work for Oracle resellers. Some are still there, hoping things gets better and fast.

For them, there is hope. On yesterday’s earnings call, president Mark Hurd insisted that Oracle had now cleaned up its act saying the company had hired 500 new people in the past quarter and revamped sales territories. “Everybody has a boss, a comp plan and a territory,” he said.

This better be true. Employees have told us a different story, one of executive greed, mismanagement and ugly scandals.

We reached out to Oracle to get an official counterpoint and Oracle refused comment.

Here’s a quick run down of how Oracle’s top execs made a mess of its hardware business.

Keith Block: The buck stopped with him.

Oracle's sales compensation plan got ugly after the company bought Sun. Several people we talked to blamed Keith Block.

Block was head of North American sales and was quietly ousted this week.

Software and hardware sales teams were not integrated. Software sales would often block hardware deals, too.

'My hardware solution might cost that software rep money in licensing and so that rep would be defensive and block me in the account from making that deal,' one former hardware salesperson told us. Nevermind that the customer would actually spend more with Oracle as a result.

The company also made other bad decisions, like killing a popular 'bronze-level' service contract and insisting customers buy service plans when they bought new hardware, we were told.

'Oracle had some of the worst sales leadership I ever worked for. Hardware sales leadership had no voice in the organisation. They got ran over. Oracle software reps did what they wanted to do.'

Mark Hurd, trouble and more trouble.

CFO Safra Catz: Obsession and greed.

One employee we talked to blamed Oracle CFO Safra Catz 'and her obsession with Oracle margins.'

This year Catz instituted a plan that 'over assigns' quotas and bonuses, one employee said. So, to get their full bonus, sales consultants had to overachieve by 10%. This effectively cut their pay by about $30,000 apiece, this employee said

'Given that the majority of sales consultants have not had a raise in base salary in a decade or more and now are asked to take a $30,000 pay cut, I think you can see why they would head for the door.'

Oracle also boosted sales quotes to 'impossible' levels before they could get paid at higher rates which meant many salespeople were cut by $100,000 or more,' the employee said.

'The issue at Oracle is not lack of leadership. It is simply executive greed. If you want to blame the right person, blame Safra,' this person told us.

Larry Ellison, taking his eye off the ball.

Oracle employees view Ellison with a mix of pride and dread.

He is a big, charismatic leader obsessed with winning. So the sales culture at Oracle has always been competitive. But with Sun came a whole new world of selling hardware and a level of frustration that employees never had before, they told us.

'I think if Larry Ellison actually paid attention to how the company is running he would make some adjustments fast ... he is the only one that can call the shots and right the ship,' a former Oracle person told us. 'Has anyone noticed the growth rate of Oracle alumni on LinkedIn?'

Another said, 'Hot mess. Larry's asleep.'

Ray Lane, still causing trouble from afar.

Although Ray Lane left Oracle way back in 2000, he still affects Oracle's hardware business.

Lane took the job as HP's chairman right before the board fired then HP CEO Mark Hurd. Ellison snatched up Hurd. Lane got HP to hire one of Ellison's most despised foes, Leo Apotheker, former CEO of SAP. This lead to lawsuits that revealed damning e-mails including some messages of Keith Block slamming Mark Hurd and Sun hardware.

Charles Phillips, a BIG fall and fail.

Charles Phillips was Ellison's No. 2 guy (and acquisition mastermind) when Oracle bought Sun in the first place in 2009.

'Charles Phillips was the Wall Street guy that developed an acquisition strategy which propelled Oracle through the last tough time,' one employee told us.

Then Philips was publicly disgraced in a sex scandal involving billboards and Phillips mistress. He was all over the headlines. He admitted to the affair but his image at Oracle was badly hurt.

Philips left his job at Oracle. Hurd moved into it and the rest, as they say, is history.

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