In June 2020, Oracle released their fourth-quarter financial reports. We were very interested; once again wondering if Oracle are still neglecting their core customers to prioritise focusing on Cloud?
Traditional licencing and support seems to be stagnating
In Q4, revenue for Oracle’s Cloud services, and license support – their most significant profit margin – reached $6.8 billion, up 1% year-over-year. For the full year, Cloud services and license support revenues were $27.4 billion total, up 3%.
Evidently, large portions of the ERP market are still relying on Oracle to support them. Meanwhile, recent reports from Oracle suggest that many organisations are currently delaying modernisation projects because of the pandemic. These organisations will continue to pay support fees for their ‘legacy’ systems, but while they’re unable to upgrade, those fees are going to Oracle with very minimal return.
One thing that does stand out though: 1% is only a small increase to their support revenue, considering Oracle apply a 4% automatic increase to their customers. Does this mean that Oracle are losing customers? Or are Oracle putting those numbers elsewhere – like into their Cloud business?
Cloud figures seem to be soaring
Fusion ERP, Fusion HCM, NetSuite ERP – the Cloud revenues are all up, by at least 25% each.
While these figures are clearly indicative of Oracle’s escalating Cloud-focus, we’re still taking these results with a pinch of salt. Oracle have been known to waive licence audit fines, if the organisation in question instead pays a discounted price on a Cloud-based solution.
And, more recently during the pandemic, Oracle are offering Unlimited Licence Agreements for a one-year term, rather than the usual three years. The catch, however, is a Cloud lock-in clause when the term finishes.
We recognise that Cloud figures are rising, and organisations are modernising their estates to the Cloud environment. But even so, not all of Oracle’s Q4 Cloud figures are necessarily from regular sales – something that Oracle keeps getting into trouble for…
Are Oracle caring for their customers?
As Oracle move into their next financial year, they need to think about how they’re helping their customers, and more specifically, which type of customers they’re helping.
We’ve already seen evidence of Oracle neglecting their core, ‘legacy’ customers, to focus on their Cloud development; and now we have the Q4 figures to back it up.
It seems Oracle expects their customers to join them in the Cloud; or face rising support fees on products which are either out of support or heading that way – regardless of how well they are working for their customers.
What should be your next step?
Oracle would have you believe that their support model is the only way of keeping your systems supported – but it’s simply not true. You can move to a third-party support provider, like Support Revolution.
We’ll take care of your support and maintenance needs, instead of Oracle doing so, cutting your support costs by at least 50%. Plus, with our expert account managers and experience in consultancy, we’ll help you make the most out of your existing systems. Unlike Oracle, we’re here to help you meet your business goals, not your vendor’s goals.
If you’re fed up with Oracle’s practices, don’t put up with it any longer. Contact us and see how we can help you.