Oracle's Hardware Business Has Been A Mess -- Here's Who Employees Blame (ORCL)

Oracle's acquisition of Sun Microsystems sent the company's sales organization into a tailspin.

Over the past year, "droves" of Oracle salespeople have fled the company.

We talked to about a half dozen employees in the past two months. Some came to Oracle from Sun. Some now work for Oracle resellers. Some are still there, hoping things gets better and fast.

For them, there is hope. On yesterday's earnings call, president Mark Hurd insisted that Oracle had now cleaned up its act saying the company had hired 500 new people in the past quarter and revamped sales territories. "Everybody has a boss, a comp plan and a territory," he said.

This better be true. Employees have told us a different story, one of executive greed, mismanagement and ugly scandals.

We reached out to Oracle to get an official counterpoint and Oracle refused comment.

Here's a quick run down of how Oracle's top execs made a mess of its hardware business.

Keith Block: The buck stopped with him.

Oracle's sales compensation plan got ugly after the company bought Sun. Several people we talked to blamed Keith Block.

Block was head of North American sales and was quietly ousted this week.

Software and hardware sales teams were not integrated. Software sales would often block hardware deals, too.

"My hardware solution might cost that software rep money in licensing and so that rep would be defensive and block me in the account from making that deal," one former hardware salesperson told us. Nevermind that the customer would actually spend more with Oracle as a result.

The company also made other bad decisions, like killing a popular "bronze-level" service contract and insisting customers buy service plans when they bought new hardware, we were told.

"Oracle had some of the worst sales leadership I ever worked for. Hardware sales leadership had no voice in the organization. They got ran over. Oracle software reps did what they wanted to do."

Mark Hurd, trouble and more trouble.

Employees we talked to had nothing good to say about No. 2 man, Oracle president Mark Hurd.

"Mark Hurd isn't a counter balance [to Larry Ellison]. He's like gas on the fire," one former sales person told us. "The sales engineering machine is almost broke, even though Oracle is still doing huge deals and its business is thriving. It's the Oracle brand that is able to drive that. I don't know how sustainable that is, but something has got to give."

Another said that Hurd wasn't really dangerous, he was inconsequential. "Mark Hurd is nothing more than a figure head at the company.  He has no power or influence and is mocked on almost a daily basis."

CFO Safra Catz: Obsession and greed.

One employee we talked to blamed Oracle CFO Safra Catz "and her obsession with Oracle margins."

This year Catz instituted a plan that "over assigns" quotas and bonuses, one employee said. So, to get their full bonus, sales consultants had to overachieve by 10%. This effectively cut their pay by about $30,000 apiece, this employee said

"Given that the majority of sales consultants have not had a raise in base salary in a decade or more and now are asked to take a $30,000 pay cut, I think you can see why they would head for the door."

Oracle also boosted sales quotes to "impossible" levels before they could get paid at higher rates which meant many salespeople were cut by $100,000 or more," the employee said.

"The issue at Oracle is not lack of leadership. It is simply executive greed. If you want to blame the right person, blame Safra," this person told us.

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