Below are direct quotes from a Reuters article recently written by Noel Randewich . This is PRICELESS!
SAN FRANCISCO (Reuters) – Oracle Corp blamed its rapidly expanding salesforce for a severe miss in third-quarter software sales and warned that its ailing hardware business will lose more ground this quarter, driving its shares 8 percent lower on Wednesday.
The world’s No. 3 software maker projected a 1 to 11 percent rise in new software licenses and Internet-based subscriptions in the May quarter – an indicator of future performance. But investors focused on a 2 percent slip in the February quarter that badly missed Wall Street’s targets.
Oracle’s February quarter revenue miss, which executives blamed poor sales-force performance, was its worst since the November quarter of 2011.
“What we really saw was the lack of urgency we sometimes see in the sales force, as Q3 deals fall into Q4,” Chief Financial Officer Safra Catz told analysts on a conference call.
Since we’ve been adding literally thousands of new sales reps around the world, the problem was largely sales execution, especially with the new reps as they ran out of runway in Q3.”
Wall Street remains concerned about tepid spending by governments and corporations in an uncertain global environment, but Catz dismissed those fears.
I’m totally at a loss for words as I begin this post. Is sales execution the ONLY reason why Oracle badly missed their number? One would assume this by reading the article. I was in IT sales for my entire career and I am totally on board with quarterly pressure on the sales team to make numbers. I’m also fully aware that many times sales execs are asked to bring in true 4th quarter deals into the 3rd quarter. Ask any CIO and they will confirm that. In fact many times smart CIO’s will wait till quarter end to make a deal. However to blame the sales force, and of course sales management because they “ran out of runway” in the 3rd quarter is quite a stretch at best! There is definitely a limit to how much business you can move forward. Additionally, a seasoned sales exec knows when he can accelerate a transaction into the current quarter or not. Some deals are not fully “baked” and therefore it is not good business to pressure a client too far in advance. Depending on the relationship you have with your client, the sales exec would know how far he can push. And more importantly, if the sales team is constantly asked to bring deals in a quarter ahead of schedule, at some point in the future you WILL have a dry quarter. This is simply common sense and not specifically related to sales activities. There is only so much business you can get out of a territory in a given amount of time. You don’t want to keep robbing Peter to pay Paul.
How about the CFO’s dismissal of the fact that governments and corporations might not be spending as much because of the uncertain global environment? He said absolutely not. Giving the impression that the 3rd quarter miss was strictly sales related.
What about the fact that Oracle’s sales opportunities are diminishing because of the move by many companies to cloud computing? Perhaps the fact that servers and storage systems are being consolidated is significantly reducing new licensing for Oracle. If the sales force has less opportunities to sell perhaps that might be a contributing factor?
Does Oracle really believe that reduced IT spending in general combined with the fact that reduced licensing opportunities due to cloud computing are NOT the reason for a downward trend in revenue and profits. They want us to believe that the sales force is to blame.
I have a question for the Oracle CFO. When Oracle was the darling of Wall Street and when they could do no wrong, how much credit was given to the sales team? Did the CFO on his conference call make a quote something like this—“ if it weren’t for our professional sales organization we wouldn’t have blown out our numbers” OR “ our sales team continues to execute flawlessly even in the face of more competition and reduced market opportunities” OR “ our sales execs manage the pipeline correctly so we consistently hit our quarterly objectives”
You see if you are going to throw the sales force under the bus when you don’t reach your quarterly objective then PLEASE give them the credit when you do.
Is that too much to ask?
One of the reasons I wrote the book; “What They Don’t Teach You In Sales School”, is to make it clear that sales can be an awesome career PERIOD. To this point ‘Universal Sales Truths”, (UST) is dedicated to this reality. It turns my stomach when senior management looks to blame sales for poor revenue production. Many times it is only a weak excuse. It is simply the easy thing to do.