Oracle Shows What Happens When Sales Runs the Show

CIO — Most IT companies are led by engineers. Oracle stands out as the one large-scale IT firm run by a sales executive, and it has historically been very successful. The upside to this approach really comes down to being very aggressive and willing to engage in battle, not to mention being very good at these fights.

The downside, which is becoming more obvious of late, is that sales-driven organizations tend to be overly focused on compensation—good salespeople know to focus on what pays the highest commission, after all—and not that focused on customer satisfaction or product results. In short, they want your money, and everything else is secondary.

They also tend to be a bit loose with financial reporting—numbers aren't as inflexible to salespeople as they are to engineers or accountants—and also a bit loose with the facts, since closing the deal can have priority over telling the truth. This is why we have so many unfavorable stories about door-to-door, car and many other types of salespeople.

Commentary: Oracle Prepares to Enter PaaS Wars

In short, the very things that make for a great salesperson, in terms of placing financial success over customer loyalty, can make them a dangerous CEO both to competitors and their own companies. That's why we don't see many CEOs like Larry Ellison.

Creative Advertising May Get Oracle in Trouble

Truth in advertising is one problem area for the company. Oracle has been chastised not once, but twice, for misleading or false advertising. The first time the company was caught claiming its systems were twice as fast as IBM's, and the second time for claiming they were 20 times as fast.

It isn't what Oracle claimed that showcases the problem but, rather, how the situation escalated. Most companies would have either held off for an extended period before making the claim or made sure that future claims could be properly supported. Oracle actually went in the other direction and found a creative way to increase the claim.

Rather than change its bad behavior, the company pushed harder. This is the combative sales nature taking hold. Unfortunately, Oracle doesn't seem to realize that it's not really being combative with IBM but, instead, with the National Advertising Division. Behavior like that can lead to government sanctions for false advertising.

News: Oracle Pulls Exadata Ad Claims After IBM's Complaint

Even if it doesn't face sanctions, it is increasingly unlikely that IT buyers would believe the first claim, and certainly not the second, given Sun's recent history against IBM. While these efforts may seem to Oracle to be in IBMs face, they simply obliterate any appearance of honesty. Buyers typically don't like to do business with companies they don't trust, and Oracle—at least in the years when Ray Lane wasnt running the company—has traditionally had a trust problem with customers. This kind of behavior just makes it worse.

Continue Reading