The Dirty Tricks They Play: Oracle’s “Coercive Sales Practices”

Oracle’s Coercive Sales Practices

Cloud ERP platforms are all the rage right now.

Or… are they? Is anyone actually upgrading, or would the providers just like us to believe they are?

It turns out that Oracle’s cloud platform (and revenues) might not have been quite as robust as we were all led to believe. So much so that Oracle went to extreme lengths in an attempt to achieve their goals.

In this series, we’re taking a look at some of the most common dirty tricks used by Oracle and SAP, and explaining what (if anything) customers can do about them.

Today, we’re looking at some of the more extreme tactics Oracle have used to “convince” customers to switch to their cloud ERP platform—tactics that were so shocking that even their own investors couldn’t stand idly by.

They Were Sued by Who?

Recently, Oracle’s use of dirty tricks has become so pronounced that even their own investors have taken action against them.

In a lawsuit filed in February 2019, Oracle’s investors claim the company’s management made “false and misleading statements concerning the business results and prospects of the Company.”

Oracle’s management, the investors claim, knew the company’s cloud revenues were partly driven by “…improper, coercive sales practices,” which included:

  • Threatening existing customers with ‘audits’ of their use of the company’s non-cloud software licences and levying expensive penalties against those customers, unless the customers agreed to shift their business to the [Oracle] cloud programs;
  • Decreasing customer support for certain… on-premises or hardware systems, in an effort to drive customers away from such systems and into cloud-based systems; and,
  • Strong-arming customers by threatening to dramatically raise the cost of legacy database licences if the customers chose another cloud provider.

Source: Rajiv and Sarita Chugh, Derivatively on Behalf of Oracle Corporation v. Jeffrey S. Berg et al. and Oracle Corporation

Oracle have two primary reasons for wanting to drive existing customers to adopt their cloud solutions:

  1. Oracle’s cloud solutions are subscription-based, which gives them another opportunity to lock customers into expensive contracts; and,
  2. Most of Oracle’s cloud subscription packages are bundled with support, making it difficult for customers to opt-out of the official support programme.

This is just one case of Oracle using questionable sales tactics to extract more money from customers and keep them locked into expensive contracts.

Anecdotally, many customers claim they have been threatened with audits or other consequences if they tried to leave Oracle’s support programme or take other action that could harm Oracle’s profits.

What Can You Do About It?

If Oracle threaten your organisation with audits — or any other negative action — the most important thing you can do it ask them to put it in writing. Doing so would place Oracle at severe risk of legal action, so clearly they will not be able to do so.

The second thing you can do is approach third-party support providers to ask for quotes. Many of the tactics Oracle use to get their way are related to price rises or other financial penalties, and having much lower quotes from third-parties will increase your bargaining power.


Don’t Stand for Dirty Tricks

If you’ve had enough of the dirty tricks Oracle and SAP use to keep you paying over the odds for poor quality support, we can help. Recently, we published a report on their most common dirty tricks and what customers can do to protect themselves.

In the report, we cover:

  • How SAP charge a small fortune for their official support programmes… but don’t even provide guaranteed response or resolution SLAs for most issues.
  • Why Oracle customers are suddenly being slapped with hefty, automatic annual price rises with no obvious explanation or warning.
  • What customers can do to protect their interests against the barrage of dirty tricks employed by Oracle and SAP—including how to save at least 50% on annual support contracts while receiving a higher level of service.

And much more.