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Posted by Mark Bartrick on March 25, 2014
Oracle has missed revenue expectations for three quarters in a row now as its Q3 results fell short of market expectations. The company blamed currency fluctuations and the strength of the US dollar for this latest miss.
The company reported third quarter earnings of $2.6 billion on revenue of $9.3 billion. Wall Street expected to Oracle to report fiscal third quarter revenue of $9.36 billion.
To be fair, Oracle did deliver some good data points. For instance, hardware system product revenue for the third quarter was $725 million, up 8 percent from a year ago. Software license and support revenue was up 5 percent to $4.6 billion and new software licenses and cloud subscriptions were up 4 percent from a year ago to $2.4 billion. Oracle says its outlook for the fourth quarter was solid. Safra Catz, Oracle co-president, said revenue growth in the fourth quarter will be between 3 percent and 7 percent.
Oracle won’t want to miss Quarterly earnings expectations again and will expect their sales teams to outperform in the next couple of months. All of which bodes well for an exciting run up to Oracle’s fiscal year end on May 31st.
Here are three quick tips to bear in mind as you prepare to negotiate with Oracle:
1. If you have an Oracle contract up for negotiation this quarter, then you should leverage the pressure Oracle sales are under to hit market expectations by squeezing an extra point or two of discount in return for a signed contract.
2. If you have a support renewal coming up, remember you have a choice now and third parties like Rimini Street, Spinnaker Support and Alui can give you real leverage at the negotiating table.
3. If you have neither a new software deal in the works nor a support renewal looming then watch out for either your Oracle sale rep getting creative with an unexpected year-end ‘special’ deal for stuff you may or may not need, or for Oracle’s audit team to come knocking looking for some quickly billable non-compliance.
Whatever happens, if you are negotiating with Oracle this quarter then remember Forrester can offer you independent advice that could make a real difference to your negotiation efforts.
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