First off, it is no surprise that Oracle uses sneaky ways to make money, however, they may have actually been caught legally this time. According to a recent article in The ITAM Review by Martin Thompson, “It is alleged that Oracle artificially inflated its cloud sales numbers by offloading cloud products to customers under the duress of audit or by offering heavy discounts to on-premises contracts.”
Although Oracle may have a lawsuit out for their actions of invalid information based on their cloud products, leading up to this, many clients experience money draining traps because of the false information Oracle tries to sell.
Throughout this ITAM review article, they asked Oracle clients to speak up about their experiences with Oracle’s sales tactic to threaten large penalties during an audit unless customers agreed to buy a cloud subscription.
This is what one of the long list of clients stated, “Oracle conducted an audit and found that we were out of compliance with regards to Database and some of the optional features. They proposed two options. The first was to true up at a certain discount. The second was to true up at a greater discount but also sign up for a six figure one-year Oracle Cloud Credits contract. We were not interested in this but looking at the 5-year TCO it saved us over $1M to sign up for the Cloud credits for 1 year.”
The ITAM Review also asked former clients if they have experienced Oracle selling them a discount on their Oracle products if they would buy a short term cloud subscription. Another fraudulent sales tactic for them to make money. However, here is what an Oracle client stated, “our company has been subject to this sale tactic to get a reduction on an important purchase. – Within the framework of our “Cloud contract”, we paid a “one-year Cloud subscription” for an amount of 78.000 €. – No, we didn’t complain to anyone. – After one year, we have terminated this contract, but we are curious to see the reaction of Oracle.”
This is not surprising to most because we have seen Oracle use sneaky sales tactics to make extra dollars, however, they crossed the line when they tried to show off to share holders about their cloud growth. Now this is considered fraud. So what’s next? The court would have to see Oracle’s records which would then cause them to receive backlash, so it is unlikely that Oracle will open those records to anybody.
The common theme for all of the testimonials we read was one thing – they paid too much to Oracle! Based on everything there, if those customers would have sought out help for audit defense, they would have paid far less or even zero.
While we wait to see what happens to them, it is important to plan for an audit now and to not go in on it alone. Now that we know how Oracle is pushing cloud, being careful with agreements is crucial. We can help, contact us today to plan now.
Articles Referenced: https://www.itassetmanagement.net/2020/01/29/damning-evidence-in-support-of-oracle-cloud-fraud/
