Oracle customer trust issues 'will harm cloud growth'


Oracle must take steps to improve customer trust and address their vendor lock-in concerns to boost adoption of its cloud services.

That’s according to an open letter from the Campaign for Clear Licensing (CCL) to Oracle chief Larry Ellison, which states the firm must eradicate the “deep-rooted mistrust” of its customers to ensure cloud become a major part of its business.

The CCL wants to make it easier for end users to get their heads around the complex issue of software licensing by working with vendors to make their terms and conditions more transparent and easy to understand.

Ellison bullishly predicted last month, following the release of the database giant’s second quarter results, that the firm’s annual cloud revenue will exceed $1billion in 12 months’ time.

During Q2, its cloud services brought in $516 million, while the firm’s total revenue for the quarter topped $9.6 billion.

“With just five per cent of [Oracle's] revenue deriving from cloud services, you have a long way to go before cloud becomes a major part of your business, and we believe there are significant challenges to overcome along the way,” the CCL letter states.

“Not least of all is overcoming the deep-rooted mistrust of your core customer base as a result of your auditing and licensing practices.

“We fear if Oracle does not address these concerns then the company’s ability to meet its stated $1 billion cloud sales target next year, together with the longer term outlook for its cloud computing business, will remain in doubt,” the document adds.

This isn’t the first time Oracle has found itself in the CCL’s crosshairs, as the not-for-profit organisation published a report in November 2014 accusing the company of cultivating “hostile” and “mistrustful” customer relationships.

The letter touches on the contents of that report, and warns Oracle that if these are left to fester among its customers, the company’s cloud growth strategy could be scuppered.

“But there is time to change, and we applaud the levels of engagement we have already received from Oracle and in particular members of [its licensing management arm] who wish to address these already well-known issues,” the letter continues.

“We are writing this letter to further increase this engagement so that real change can be achieved to everyone’s benefit.”

Cloud Pro contacted Oracle for comment on this story, but a spokesperson said the company has nothing to add at this time.

Caroline Donnelly is the news and analysis editor of IT Pro and its sister site Cloud Pro, and covers general news, as well as the storage, security, public sector, cloud and Microsoft beats. Caroline has been a member of the IT Pro/Cloud Pro team since March 2012, and has previously worked as a reporter at several B2B publications, including UK channel magazine CRN, and as features writer for local weekly newspaper, The Slough and Windsor Observer. She studied Medical Biochemistry at the University of Leicester and completed a Postgraduate Diploma in Magazine Journalism at PMA Training in 2006.