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https://www.bloomberg.com/news/articles/2018-08-10/oracle-accused-of-defrauding-investors-on-cloud-sales-growth
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...The suit claimed that Oracle’s executives lied in forward-looking statements, which are never guaranteed, during earnings calls and at investor conferences in 2017 when they said customers were rapidly adopting their cloud-based products and cloud sales would accelerate....
When I was at Oracle working for a proof of concept in June 2017, at Verizon, MH himself offered 50 cents on a dollar in support reduction to the SVP shutting down a data center to move to the cloud. The SVP at Verizon wanted a dollar for dollar reduction. MH said no and the deal vanished in a puff of hot gas.
A year later they signed a deal with Verizon. I don't know what the support reduction was but I do know it was at least .50 for every 1 dollar spent. And... that is what MH was prepared to offer... it was approved by executive management given to all sales people as a way to sell cloud back in 2016 - 2017.
You have witnesses to this, and can easily track it down.
It was all a smokescreen to make it seem like oracle had a cloud business
The PAAS/IAAS has been a complete disaster. If they were trying to "out Amazon" Amazon that was a big mistake. I wonder if the execs are surprised by the results.
I don't know, Salesforce and Workday seem to be doing fine in SaaS alone. Agree that this is where Oracle should have targeted in the first place, and not the hundreds of millions of me-too spending in building up the Seattle PaaS/IaaS group (includiing that bare-metal-cloud dunghill) and rolling out stodgy datacenters, and in effect, leading shareholders and analysts down the wrong path.
@UB6TehT-1ssd Oracle has way too much cash on the balance sheet and it too widely owned by instituations to hit $10 per share any time in the next 24 months at a minimum. I expect the decline will be more like the decline over the past quarters. Still very painful however.
In general Oracle will need to re-spin their cloud story. Clearly Oracle is never going to be a player in PAAS or IAAS. The story will need to more along the lines of software company that provides software via both SAAS and on-prem. Not a very good story given the way the industry is headed, but probably the best they can do.
This could cast a dark cloud (sorry) on Oracle Openworld, coming up in October.
Should also be an interesting ORCL shareholders 2018 meeting, when will that be, November?
You would think this would start the decline of the share price to where it belongs, like $5-10 per share
So I wonder if this suit is going to force the analysts to start doing their job by doing further investigation and asking difficult questions at the earnings conference calls. Certainly if other institutional investors join the suit they will have no choice.
The number of suits may increase post Q1/Q2.
“Concealed the lack of demand for oracle cloud” right on! Looks like they learned a thing or two before filing the lawsuit.
Does it mention the coercive audits which had the effect of “converting” on-perm revenues to coerced cloud revenues - it should. That was a key mechanism to make it happen
You mean Oracle doesn't have a line for "revenue from threats and extortive tactics" in their earnings reports? :)
City of Sunrise Firefighters’ Pension Funds Are the ones pushing the lawsuit. Go Firefighters!! Get them!!
Here is the telephone number for the administrator of the fund. 954 730-2068 i am sure anyone has any info they would love it for their case against Oracle.
Having worked at O for a few years it was astonishing the level of corruption which existed. I on occasion would even report my peers to our internal attorneys because their tactics where highly unethical.
It’s about time someone forces the curtain open at O. I would almost bet money investors and analysts read this site.
““In truth, Oracle drove sales of cloud products using threats and extortive tactics,” the filing reads. “The use of such tactics concealed the lack of real demand for Oracle’s cloud services, making the growth unsustainable (and ultimately driving away customers).” These tactics weren’t known to investors and were “expressly denied by the company,” it added.”
Gig is up. It's the beginning of the end. The end of Oracle pretending to be a cloud company.
Everyone sees the real Oracle clown strategy. Only real bozos will invest.
Cloud revenue was anything in the cloud bucket.
Forget about forward looking statements, sue for misrepresentation on reported financial statements - where did all the “cloud” revenue come from!
cat's officially out of the bag.... anyway, too late too little... a small fund controlling 143M?? peanuts, most probably big O will put to rest everything with some pocket money.
real unbelievable thing is how investors still are investing in ORCL given everything that is known. no need to wait for a lawsuit to know that Oracle cloud is a fraud for the investors.
this is for example a couple of the latest report on real cloud share ww:
https://www.channele2e.com/channel-partners/csps/cloud-market-share-2018-aws-microsoft-google/
https://www.datamation.com/cloud-computing/cloud-market-share-cloud-leaders-and-followers.html
even if slightly different (depending on what you consider a "cloud"), as expected Oracle has been surpassed by IBM and Alibaba, and we are now not even in the first 5 vendors.
given that one of the most confirmed market law says that only the first 3 will survive long term, I would say Oracle cloud is not even a fraud, it's just not existant.
These investors are stupid. All they had to do was some simple poking around to find out the truth.
Discovery should be interesting.
It's funny how so much of the basis for the claims in the suit are the same things that have been posted to this site for over a year. The suit is being brought by a relatively small pension fund. iIt will be interesting to see if any other institutional investors join in the fun.
Oh yea. Many investors and analysts are calling them out on the rug. The demise is nearing.