Last Updated on March 21, 2021 by Shaun Snapp
- Oracle developed a program to push Oracle Cloud for startups specifically.
- We review the logic of this program.
Oracle came up with the idea to increase cloud sales by marketing to startups. This story illustrates both the disorganization within Oracle and a misunderstanding on the part of Oracle regarding Oracle Cloud’s capabilities.
Our References for This Article
If you want to see our references for this article and other related Brightwork articles, see this link.
Lack of Financial Bias Notice: The vast majority of content available on the Internet about Oracle is marketing fiddle-faddle published by Oracle, Oracle partners, or media entities paid by Oracle to run their marketing on the media website. Each one of these entities tries to hide its financial bias from readers. The article below is very different.
- First, it is published by a research entity.
- Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department.
Marketing the Oracle Cloud to Startups
We can still see Oracle’s Startup Ecosystem page.
Below, Oracle explains that they understand startups because they were once a startup.
Collaborate and Co-Develop with Oracle?
“We Get It. We Used to be a Startup. In the global marketplace, one size does not fit all. That is especially true for today’s vibrant, diverse, and competitive startup ecosystem. Oracle is reimagining enterprise and startup relationships through true partnerships that foster collaboration and codevelopment while inspiring global innovation.”
These terms at the end of the paragraph are key. They are collaboration and co-development. Just imagine co-developing something with Oracle?
There are several problems with this.
- Co-Develop with a Company That Cannot Itself Develop Products: Most people who know something about this consider Oracle primarily a marketing/sales organization combined with a law firm with a tiny technology component mixed in. Outside of its database, Oracle does not have a history of developing anything. Oracle lauds salespeople and attorneys while pushing down its developers. If you intend to co-develop with Oracle, you will be dealing with depressed and marginalized developers. Therefore, why is Oracle a good partner with which to “co-develop”? Oracle is a better partner if you want to learn how to sell products based upon false statements or how to sue companies, not if you’re going to develop a successful product.
- Trust and Expose Your IP to the Worst of the Worst?: Oracle is widely considered the least ethical technology company. Even their customers can’t stand them. How could any company reveal its IP to Oracle? Imagine who is going to walk away with the IP, you, or Oracle. With Oracle’s litigation capabilities, how do you win a case against Oracle for IP infringement? How much would that case cost to take even to settlement?
If Oracle is not evil, then what is the definition of evil? If you have to change the meaning of evil not to be called evil, you are probably evil. We could run a survey to get views on who is the evilest entity in the software industry, but what is the point?
Quotes from the Oracle startup program page continue…
“Startup Ingenuity. Enterprise Expertise. Global Resources.
Oracle’s mission is to build a thriving global startup community to drive the digital economy based on collaborative partnerships that enable next-generation growth, business development, and drive cloud-based innovation for startups throughout all stages of growth. The Oracle Global Startup Ecosystem works with startups at various stages, from founders in university-affiliated incubators to early stage to scaleups.”
No, this is false.
Oracle is trying to sell its Oracle Cloud.
Cut and dried.
Anyone who has worked for Oracle can tell you that the top leadership and most of the company only cares about money. It did not care about any of these things listed in this explanation. Oracle does not care about the growth of other companies.
We quote from Larry Ellison.
“It is not enough to win, all others must lose.”
Filed Under “Amazing”: Oracle Requires No Equity in Return for Customers Using The Oracle Cloud?
The fact that Oracle is not asking for equity is a selling point of the startup program. However, as we will see, the entire program is made up of highly suspicious promises. The program amounts to is getting startups to use Oracle Cloud in return for nothing, some empty promises to promote the startup.
See the quote from Oracle below.
“What Makes Oracle Different, We don’t take equity”
Considering how little Oracle did for startups, it would be very odd for Oracle to take equity. This would be like Home Depot declaring that they do not ask for equity for you to come and buy building materials from their store. Right. You shop at Home Depot, and they don’t take equity. In the common vernacular, this is called being a customer.
Run by Oracle’s Global R&D Team?
Oracle tries to promote the idea of access to its R&D team.
“The program is run by our global R&D team
Oracle sales will most likely run the program. Oracle’s R&D team has enough problems and lacks the bandwidth to support such a program, and if we know Oracle, they will not give the R&D team more resources to support the program.
Oracle Has a World Class Product?
Oracle claimed on the startup program page to offer the following…
Startups benefit from world-class product and partner ecosystems”
This statement regarding having a world-class product is strange because Oracle’s database is world-class, but it is not appropriate for startups and is described as follows.
“Oracle is kind of like an F1 racer – you need a full pit crew with years of training to keep it running at peak proficiency. Or you can just buy a Porsche (SQL Server).”
This is why startups very rarely use the database. It is simply too high in maintenance overhead. This is also often more expensive than open-source alternatives that can do almost everything that Oracle can do. Still, more importantly, it can do 100% of what virtually any startup needs.
Oracle promises the support of the Oracle partner ecosystem. But this is a promise on which Oracle, we predict, will never follow through. The Oracle partner ecosystem is self-serving; they exist to bill Oracle customers and have no interest in promoting startups for free.
Helping Startups Grow, Providing Access to Oracle’s 430,000 Customers?
Possibly Oracle’s most significant promise that we doubt will ever happen is access to its customer base.
“Startups gain from engagement opportunities with Oracle’s 430,000+ customers.
Exposure to global marketing, events and PR resources”
“And it offers engagement opportunities with Oracle’s 430,000+ customers in 175 countries—providing pathways to growing a startup’s business locally, regionally, and globally.”
“This is a multimillion-dollar investment with the global resources and expertise of our mentors, customers, partners, technologies, and more. Additionally, Oracle will further support startup ecosystems through active participation with global and local sponsorships, events, PR, thought leadership, and other resources.”
This is the promise that Oracle would help the startups grow by allowing startups access to Oracle’s customer base. Anyone who knows about Oracle knows that they are a poor fit for startups, and their cloud is not functional and entirely uncompetitive with AWS, GCP, or Azure. However, this is offering something that all startup need, and here Oracle promises some exposure to Oracle’s massive customer base.
You can get a sample pitch on the startup program from this podcast.
Free Oracle Cloud Credits?
A big selling point of Oracle Cloud for startups is that it would be free with cloud credits in the beginning.
Free Oracle Cloud credits
This is key.
Startups were going to need cloud credits to use Oracle Cloud. Using the cloud credits, startups could be claiming to use Oracle Cloud, and Oracle could count them as a customer. And Oracle needs to report customers for its cloud. But the cloud credits have been tiny…in the 5k to 10k range.
Oracle is continually offering free starter access to the Oracle Cloud. Oracle compensates employees for cloud sign-ups, they provide various goodies in return for signing up, but they have put the cart before the horse. You first have to build a usable product before free trials have any effect. This demonstrates how extreme the Kool-Aid drinking at Oracle has become. They cannot evaluate the capabilities of their products. This happens when executives with no product exposure don’t know what they are promoting. Even today, if you engage with Oracle resources on LinkedIn, they will tell you Oracle Cloud is good! And “you should try it!”
- Oracle resources persist in telling us to try Oracle Cloud before we judge Oracle Cloud, even on articles where we explain we tested Oracle Cloud.
- Most Oracle resources have ruined their credibility with us because they continually tell us things that we know to be false. No reality seems to penetrate Oracle.
And the problem with Oracles cloud credits has been brought up by Palisade Compliance.
“Under the “Monthly Flex” payment plan Oracle is pushing most aggressively, customers pay Oracle in advance for cloud services, which they may or may not fully utilize. Ask Oracle what happens to those services you don’t use.
Those same terms mean if you over-utilize, you will incur a penalty – much like overage charges on a mobile phone plan with limited minutes. Rather than getting a volume discount, the more you use the software over your cap, the more you’re going to pay.
You can pay more than what your contract appears to require. The rules on when discounts do and do not apply are complex and tend to result in customers paying more than they would expect, according to Palisade’s analysis.
Make sure you understand whether, in the process of adding cloud credits to your contract, Oracle will be adding or changing other terms of your existing licensing agreements for software not in the cloud.”
Cloud…..But Without Multitenancy, Self Service, or Flexible Termination?
All of these points discussed by Palisade Compliance are odd because one of the defining features of a real cloud is flexible termination. If one uses AWS or GCP, services can be shut down immediately, and billing ceased. Oracle offers none of this and is why (along with other reasons related to lack of multitenancy. One of which we covered in the article Why Oracle Cloud is Not Multi-tenant – and a lack of self-service capabilities) we have declared that Oracle Cloud and Oracle’s other cloud offerings are not clouds.
Those that are possibly lulled into getting started with Oracle Cloud should consider the quote from Mark Hurd.
“When a customer who is on-prem paying us support moved to the cloud, they pay us more money, They don’t pay us one to one, they don’t pay us two to one, they pay us more like three to one. In some cases more than three to one.” – Mark Hurd
Oracle (and SAP’s) Coercive Cloud
One should really consider this sentiment, as it is a problem with both Oracle and SAP and the cloud, and why both have been unsuccessful. Both Oracle and SAP (and Deloitte and Accenture, etc..) view the cloud to increase the cost of sales to customers. That is, they plan to, in essence, hijack the cloud, make the cloud inefficient, provide services that are not at all cloud, to further upcharge their customers. We covered the coercive aspects of this in the article How SAP and Oracle Coerce Customers into the Cloud.
SAP’s entire strategy for cloud services is now about up-charging other cloud service providers, as we covered in How to Understand SAP’s Upcharge as a Service Cloud. Companies should stay away from entities that view the cloud through this lens.
Migration Credits and Technical Support?
Quotes from Oracle’s website on the startup program continue.
Migration credits and technical support
The technical support that is promised is already severely lacking for current Oracle Cloud customers. All the entities that have used Oracle Cloud have reported to us up to this point. Oracle Cloud is unlike AWS and GCP in that you can’t set things up without reaching out to someone at Oracle. Oracle Cloud is not a cloud. It is hosting.
Oracle created several blog posts designed to promote the startup program, but they did not matter because Oracle Cloud does not work. Media like this can only be leveraged if your product works.
Thomas Kurian, Strategic Genius?
Thomas Kurian would have had his hands on all of the Oracle Cloud Startup Global Ecosystem programs before leaving Oracle and joining Google Cloud eventually. We hear a lot about how effective Thomas Kurian is as a leader, but this program appears to be doomed. It seems to be based upon the idea that Oracle has a usable cloud.
Who outside of Oracle thinks that is true? If one reads the Oracle message boards, Oracle Cloud is one of the most lampooned items in the enterprise software space.
Up to this point, Oracle Cloud and Oracle’s other cloud products like the ex-Fusion applications known as Oracle Procurement Cloud, Oracle Manufacturing Cloud, etc.. is that they don’t have to go beyond brochureware.
Oracle cannot develop applications, and Fusion required development, which outside of the Oracle database, is not something that Oracle can do (all of Oracle’s applications are acquisitions, which stagnate in development after the acquisition). The concept, or dare we say the strategy is to sell on-premises applications and the same application in “the cloud.” Then report the cloud sale while the customer uses the on-premises application. This is widely known in the Oracle community at this point.
Faux cloud has always been Oracle’s cloud strategy. Therefore, any program that moves towards customers using the cloud is not going to work. Oracle is a cloud company, but only for PR and Wall Street purposes.
In the movie, The Matrix Morpheus declared that…
“No one could be told what The Matrix is, you must be shown.”
Oracle Cloud is the opposite of The Matrix.
Oracle can talk about Oracle Cloud all day..
- Oracle can talk about how they are ahead of AWS and GCP.
- Oracle can promote Oracle Cloud with customers and Wall Street analysts.
…but the Oracle Cloud cannot be shown. (or should we say….should not be shown)
You can’t have a strategy where the customer uses Oracle cloud products. Thomas Kurian should have realized this. How could he have known? Well, he could have signed into Oracle Cloud and used it. We have to ask. As the head of Oracle Cloud, how many hours did Thomas spend using Oracle Cloud versus how many hours he spent in meetings with other Oracle executives? The previous quotation from Larry Ellison was that…
“We eat our own dog food.”
However, this does not seem to be the case.
What is the point of having such a fearsome reputation and being paid so much in yearly compensation if you can’t figure something like this out? Their top people are just not getting the job done.
Give us a call Oracle.
Problems with Oracle’s Startup Program
There are a few problems with the program that became immediately obvious.
- The Program is Anticompetitive: Oracle would gain users of its cloud by providing the lure of access to markets rather than based on the cloud offering quality. This is a tying arrangement. The startup gets something, in a completely unrelated field, for using SAP’s cloud. If this works, Oracle will report its cloud number to Wall Street as if the startups had selected Oracle Cloud without its relationship to accessing Oracle’s customer base. This was the thrust of the lawsuit filed by the Fireman’s Fund that Oracle did not make investors aware that many Oracle customers were coerced into the cloud, as we covered in the article Oracle Sued for Making False Claims About Cloud Growth.
- The Program Sells Out Oracle’s Customers: Oracle does not promise access to customers because they think the startups had a good product or a product that matched their customer’s needs. Notice the offer is made to any startup that signs up for the program. So no matter how poor the startup’s product, will it be pitched to Oracle’s customers if they use Oracle’s Cloud. This means that Oracle is selling out the interest of their customers to gain startup cloud customers.
- Oracle’s Disaffected and Disillusioned Customer Base: Oracle has many customers but few satisfied customers. Many Oracle customers already feel that Oracle takes too much money from them, with many customers mostly dodging their sales reps and hoping they don’t call. Many Oracle sales reps consider their unreturned calls on the part of customer’s rudeness, but there is a reason their customers don’t want to talk to them.
- The Program’s Perverse Incentives: This program creates an incentive to sign up for Oracle Cloud but not use the program beyond the credits. Oracle can’t convince even large companies with little focus on technology to use Oracle Cloud. Their ability to convince technologically savvy startups to use Oracle Cloud is far lower. But startups will sign up to use “something” if they could get access to Oracle’s customers.
- Oracle’s Customer Service and Bureaucracy: Anyone can begin using AWS or GCP immediately without speaking to anyone. Instances can be brought up or down without any human interaction. The Oracle Cloud does not work like this. Everything in the Oracle Cloud is manual, and you have to speak with an Oracle resource to get things done. Startups will not have the patience to deal with the high manual component of Oracle Cloud.
The Oracle Startup program looks exceedingly unappealing. First, the solution being offered is highly uncompetitive, and we very much doubt any of the enticement that Oracle is stating regarding helping startups to sell into Oracle’s customer base will come true.