Business Insider/Julie Bort
Oracle CEO Larry Ellison
Oracle will report its quarterly financial results at the close of the stock market on Wednesday. Analysts are expecting flat revenues but we're hearing that there could be a couple of bigger items of interest:
- A reorganization of the U.S. sales force, which may be announced only internally, not publicly.
- A big new agreement with former-partner-turned-bitter-rival, Hewlett Packard.
Both of those tidbits come from Wall Street analyst Pat Walravens, director of technology research for JMP Securities, one of the analysts who closely follows Oracle and breaks a lot of news about the company.
Walravens tells us that the reorg could be taking place in the current quarter and that people inside Oracle expect to be called into a meeting "to announce the change later this week." There may also be news about a restructured hardware business.
Oracle declined comment when reached by Business Insider.
Most analysts are expecting less-than-stellar financial results from Oracle. The consensus is 67 cents a share on sales of $9.2 billion. That's flat revenues from the year-ago quarter, and slightly improved profits.
Walravens expects software sales to be flat, and hardware revenue to be worse than expected, diving 13%. Oracle has said hardware revenue will be down 1% - 11%. Oracle's hardware sales have declined heavily for 11 quarters in a row.
So a reorg of the North American sales force could be good news.
As we've previously reported, Oracle president Mark Hurd has been systematically overhauling the sales force for more than two years, but so far, his changes haven't sparked the kind of growth analysts would like to see.
When he began, we started hearing stories about how some of the company's more experienced salespeople were quitting because the atmosphere had become too cutthroat and stressful.
A few weeks ago, we talked to one salesperson who quit the company less than a year after joining. This person told us that, under Hurd, the sales territory was less than 20 square miles of a metropolitan area and included so few companies that it would have been very difficult to earn the quota Oracle expected, about $2 million in annual sales.
"My territory was extremely small. The amount of business I could call on, I exhausted that in the amount of time I was there. They wanted you to keep calling those same companies. I'm not the kind of sales rep that's going to call on the same company over and over," this person told us.
Walravens is hearing similar stories. As he reported in his research note, an Oracle reseller told him that in one territory alone Oracle had "16 reps just [selling] on the database. I don’t know how they make a living."
We're told that the North American sales teams to be restructured report to Matt Mills. These could be the teams that included top North American sales guy Anthony Fernicola, who moved to Salesforce.com. (Correction: The story originally said Mills took over for Fernicola. We've since been told that this is not correct.)
On top of all that, Oracle may have patched up its relationship with HP.
Walravens understands that HP has signed a $150 million contract to renew its Oracle licenses, a contract that may or may not be announced. HP has always been a big Oracle customer, and for decades was a close partner who helped sell Oracle technology. But their relationship went south after Oracle bought Sun and started competing head-to-head in the hardware market with HP.
Oracle also hired Hurd after HP asked him to resign as CEO, which lead to a lawsuit that was ultimately settled. Then Oracle said it would stop making its database software for HP's flagship Itanium computer servers. That lead to another lawsuit, which HP won.
Given its lack of overall growth, Oracle may have decided it needs HP again. Given Oracle's lackluster hardware sales, HP may have decided that Oracle isn't much of a threat. "Sun is a lot smaller than when Oracle bought it," Walravens points out.
But that's just speculation at this point. Sources close to HP tell us that they haven't heard about a new contract or partnership with Oracle.
HP also had no comment.
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