Business software maker Oracle Corp. posted fiscal third-quarter results below Wall Street's expectations on Wednesday, attributing much of its sales decline to a lackluster performance by its growing sales force.
Oracle said it has hired thousands of new salespeople who pushed out many deals from the third quarter to the fourth. The company said many of those deals have since closed.
In a conference call, Oracle's co-president, Mark Hurd, answered a question about sales from Heather Bellini, an analyst at Goldman Sachs.
QUESTION: Mark, you and Safra (Catz, Oracle's CFO and co-president) both highlighted sales execution as the reason for the shortfall this quarter, after posting a strong (second quarter). I'm just wondering if you can give us a sense of how long you think the transition looks like. Is it one quarter or two quarters? And as a follow-up, what does the ramp look like as execution improves?
ANSWER: Well, I'll just say we expected to be within the context of (the fourth quarter). So we saw many of the deals that we've described are closed. So we expect it to be relatively quick. On the ramp — and I think, Heather, what you mean is the ramp of the salespeople that turn into pipeline and turn into growth, if it's not, I'm sorry. But, that's the question I'm going to answer.
ANALYST: Yeah, that's it. Exactly.
ANSWER: Okay, all right. So I think it really is just about the speed of getting our conversion continuing to climb. So our pipeline is behaving — I wouldn't say linear to the hires but the way you would expect it to. You would expect a timeframe for a new hire to come onboard, get trained, get assimilated, get engaged with their management.
And I would say the pipeline is behaving roughly as you would expect relative to the ramp of those sales resources. When you hear Safra and I talk about the pipeline, we measure it very closely and we see it there. So it's just a question of how we convert. I won't go into the role of predicting revenue growth rates out several quarters, other than to tell you that we have a lot more coverage and we have a pipeline that's growing substantively.
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- Mark Hurd