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Oracle tools up for cloud wars with sales re-org

'Half focus is no focus'

Oracle has shaken up its sales force to drive cloud business, multiple sources have told The Register.

The task of pushing Oracle cloud services, flagship database and middleware was handed exclusively to Oracle’s field sales operation. On-premise apps - eBusiness Suite, PeopleSoft, Siebel - have gone to the phone-based direct sales team. All new hires are going into the cloud units.

The organisational reboot is intended to create clear lines of responsibility, accountability and bonus allocation - and also to pinpoint who is to blame if sales targets are missed. It also means field sales and direct will no longer collaborate on sales.

Many Oracle customers have seen their long-time account reps suddenly moved away as a result of Oracle’s shake up, sources told us.

Earlier this year we reported that Oracle in Europe and the Middle East was hiring 1,400 to sell sales direct in Amsterdam, Cairo, Dubai, Dublin, Malaga and Prague.

Two sources with close links to Oracle sales reps and customers said the shake up is intended accelerate penetration of Oracle’s cloud services.

“This year, the cloud component of quota [of sales] is much bigger and more weighted than in the past," said one.

Field report

“Before, they [field and direct] worked together and passed deals between each other - based on the size of customer, the amount, the quote and credit. There was a relationship and the field sales team would send customer work to the direct person.”

Another insider said: “Half focus is no focus... If you make people responsible for selling cloud and that’s where their KPIs are based, then the success will be higher.”

“By reorganising their structure, it will make sure their focus is on cloud and telesales [will] focus on the lose ends in selling on prem.”

Oracle field and direct sales were characterised as having a “very different profile and mindset".

Direct is a remote, phone-based operation working through call lists, comprised of new hires and those straight out of education, individuals who are considered hungry but who have relatively little experience.

The phone-based team face the up-hill job of selling on-prem apps in world that is shifting toward cloud services - as evidenced by Oracle fiscal '16 sales reported in June.

The split between cloud and on-prem on sales reflects a deeper cultural shift inside Oracle, with R&D now shifting toward cloud wares at the expense of traditional on-premise software.

The new priority was highlighted by the recent release of Oracle’s 12c database that went to the cloud first, with a classic version set to follow at some point.

Sales of new software licenses fell 15 per cent (11 per cent in constant currency). New software sales made up 22 per cent of the Oracle business.

Oracle's cloud revenue growth of 36 per cent to $2.8bn (up 40 per cent in constant currency) was tiny compared to AWS, which turned over $2.6bn for Q1 ended 31 March, which was up 64 per cent year on year.

Microsoft is also in the picture - more akin to Oracle than AWS, in that it too is an enterprise IT player with a vast on-prem business that is trying to become a cloud services provider.

Microsoft was a relatively late entrant to cloud, but its Azure platform is regarded as second in size behind AWS by Gartner.

But financial comparisons with AWS are difficult as Microsoft folds revenue from ts Azure platform and Office 365 into separate business units that also contain other products.

Further, it doesn’t report those revenues separately on a constant basis.

It’s estimated Azure generated $800m for Microsoft in its most recent quarter, reported this week.

Oracle declined to comment. ®

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