The market is getting wise to Oracle. Analysts expected additional acquisitions and investment in infrastructure with strong cloud growth expectations from the September 14th earnings call. Instead they got "organic growth" and a "machine learning autonomous database" pitch from LE. SC tossed up some guides and cautioned lower earnings.
They wanted to hear a story of charging ahead to the cloud. Instead they heard the stark reality of several seriously disconnected executives with pipe dreams of $80.00 per share. No plan, no strategy just "organic growth" to Oracle cloud by customers with no investment. No one buys this, stock tanked 7% in short order. With out a vision and a strategy behind cloud the market will not invest and the window to move enterprise customers to the Oracle cloud is shrinking.
SC seemed surprised that on premises revenue was slightly higher than last year. The answer is obvious with the Oracle RDBMS 12c R2 and host of new features that not one executive is aware of or speaking about. What should be a surge in demand is basically a modest bump. Oracle still gets over 50% of revenue from its RDBMS which they continue to ignore.
What is predicted is some serious cloud washing of support revenue streams and a continued strategy of what got them to this place (before the earnings call). Cut costs, hype cloud, convert support to cloud credits. Instead of learning and adapting, the exec team will focus harder on delivering what is killing the company.
Its the cut costs part that affects the layoff. Those who have high connections are whispering rumors. Enterprise cloud architects are not seen as effective. Enterprise everything is not seen as effective. Customer support, sales and now development is seen as a cost. The executives believe that smart software will win the cloud, machine learning and efficient utilization of resources will make the Oracle cloud better. Everything else is seen as a waste on the development side.
Massive cuts to sales, support and development to roll out amid a sour Q2. December 1st will mark the holiday season of layoffs. When the stock tanks amid good growth numbers you have to realize that there is a problem. The problem is this "magic cloud" that organically grows itself with no investment in people, processes,hardware infrastructure or technology to make it happen. Instead, the executives plan to cut in those areas....