Just met with a friend that was privy to high level executive planning sessions. New targets are based on doing nothing more than driving stock price. A few years back like Q4 FY14, FY15 the biggest revenue generators were the top of the enterprise stack. These customers were touted as the Strategic Industry Verticals by MH (healthcare, finance and telecom) and he created the Strategic Industries group to service them.
Analysis showed that these biggest customers were the place to target the sales effort. It paid handsomely. Diving deeper into Oracles biggest customers paid nicely.
What is driving the stock price however is cloud revenue. These same customers are now getting the stiff arm from Oracle for two reasons. The first is they are heavily regulated and not able to quickly move to the cloud, the second is they now have a "containment" strategy in place to curb Oracle spend. Many are claiming they no longer wish to renew the universal license agreements in place. For these reasons sales to these big customers have diminished considerably over the past several months.
What is holding back Oracle is a host of regulatory requirements around security and networking. Specifically a big pipe between the Oracle data centers and the customer data centers. Oracle acquired Dyn in November of 2016 to resolve many of these issues. Oracle is also building out its core capabilities to integrate everything together with the new IAAS offering. In short there is much work to be done before it can get its bread and butter enterprise customers to move to cloud.
It should come as no surprise that Oracle execs have no love for sales reps. Now an eye is cast upon the core enterprise sales team, which is for all intensive purposes, nothing more than useless overhead until this gets sorted out. Discussions on how and when to do the layoffs are underway. Expect sharp reductions in short order.
This goes counter to the annual sales team cuts, as the enterprise sales numbers clearly show there is no reason to wait. The spreadsheets are ready for the Sept 14th Q1 FY18 earnings call. So is the list of sales reps and sales support to get whacked. My friend has no details as to the exact time of the enterprise sales team layoffs, only that its coming soon.
Again the discussion on the loss of business continuity and talent has no bearing. Its a new ball game and the execs believe this requires new sales talent. No reassignment of the existing enterprise sales force is deemed necessary. You wont get a job elsewhere inside Oracle sales. Enterprise sales is about to shrink dramatically Sales reps, business development, sales engineers to be let go in short order. Almost all the sales for cloud is coming from small to mid market customers, and that is where the focus is.