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Oracle whistleblower suit raises questions over cloud accounting
- suprgeek 10y agoSlightly relevant - about Oracle and its single-minded pursuit of money over all else: https://www.youtube.com/watch?v=-zRN7XLCRhc&t=33m https://www.youtube.com/watch?v=-zRN7XLCRhc&t=33m
- danielconde 10y agoBryan Cantrill is very passionate in the talk recorded in this video. Now I learned something about illumos.
- jlarocco 10y agoI don't understand Oracle hate. Yep, they're all about making money, but at the end of the day, that's what most businesses are doing, and the ones who say otherwise are bullshitting you with crap their marketing department made up. Only in start-up bizarro world can a company give away free products and have negative or zero profit margin and be considered "succeeding". It makes no sense to me to hear people working at for-profit companies complaining that other companies only exist to make money. It's inconsistent, at the very least. Open source is great, volunteering is great, sharing and giving stuff away is great, etc., but businesses and corporations only exist to make money for the people who own them and work for them.
- aryehof 10y agoCompanies are not only about making money. They are also about being good citizens in the markets and environments they are involved in. They have duties and resposibilities to customers, workers, shareholders, competitors, suppliers, regulatory authorities, the community and the environment - amongst others. To me, Oracle discounts and in some cases shows disdain for, being a good corporate citizen.
- mr337 10y agoSeriously? https://en.wikipedia.org/wiki/Oracle_America,_Inc._v._Google,_Inc https://en.wikipedia.org/wiki/Oracle_America,_Inc._v._Google.... Shall I go on?
- jlarocco 10y agoI'm not sure how that changes anything I said. FWIW, Google does it too: https://www.scribd.com/doc/40513712/Google-v-US-Complaint https://www.scribd.com/doc/40513712/Google-v-US-Complaint And I understand, the cases are not the same at all, but it highlights that Oracle is hardly the only tech company who will take to the courts to help themselves make money.
- Oletros 10y agoIs this a joke?
- pron 10y agoAre you aware of any company in Oracle's position that did not sue? Are you aware of any company that has ever done what Google did, at that scale, and was not sued?
- zippergz 10y agoI dislike Oracle because their products (at least the ones I've used) are horrible to use, and insanely expensive. Edit: I'm talking about the Oracle database products, not Java, the stuff they acquired with Sun, etc.
- jlarocco 10y agoThat's completely fair, but the parent poster commented about Oracle trying to make money and linked to a 5 minute rant about it.
- cneumuel 10y agoWorking for the man (and in DB dev), I am obviously biased. However, I'd be interested in what you actually find horrible to use and compared to what.
- shadowfiend 10y agoThe problem here isn't asserting that businesses and corporations exist to make money. It's asserting that they only exist to make money. Or that that is in any way natural. For a company to focus entirely on making money when they don't have enough money to operate is, let's say, understandable. But since companies are run by humans, and humans are quite adept at balancing different goals at the same time, it's not at all beyond reason to expect a company that is making money hand over fist to also focus on more than just that. It's not at all bad to judge them if they choose not to do that, nor to consider them worse than other companies that both make money hand over fist and choose to focus on more than just making more money. It is in no way inconsistent to work at a for-profit company and complain that another company only exists to make money. Even if you are the chief executive of a for-profit company that both makes money and has additional goals beyond that, you aren't being inconsistent. But if you aren't the chief executive? If you are an employee whose day-to-day job actually isn't directly to make money, even if it is, somewhere above you, being guided by that goal? That doesn't even come close to inconsistent, IMO. Most businesses are making money. That's not the same as being all about making money. Confusing the two is a really good way to discount the companies who manage perfectly well to make money without losing their souls to that goal[1]. [1] - I'm not really saying Oracle is one of these companies; I've never worked for them or interacted with them (though I've heard plenty of tales). I'm taking issue with the broader statement, because I think it's a fundamentally problematic lens to view the world through.
- pron 10y agoYou're right. I think many people in tech today are not used to Oracle's old-school style. They've become accustomed to companies like Google and Facebook that want to make money and collect as much private information about as many people as possible; they want money and unlimited power. Or companies like Google and Apple that want your money and your mind, that, like Big Brother, are not content just having power over you; they want power over you and your love. That a company would just want your money but not your love and allegiance, or that it wants your money without also trying to brainwash you or spy after you indeed seems strange these days. BTW, I agree with the idea that companies shouldn't only be about making money, but also care about other things, like the welfare of their employees. But companies like that are virtually nonexistent among America's tech giants.
- danielconde 10y agoYou have a good point. It's a spectrum. There are software companies that thrive by using different models. Some are based on open source, some are based on closed source and some even mix the two. Some other companies as listed elsewhere are ad-companies and give away software to bolster their eco-systems.
- gaius 10y agoOracle may be "evil" in many people's eyes but at the end of the day they just want to sell some products and services. Same with Microsoft, same with Apple. Compare and contrast that with Google and Facebook who make their money off your private data.
- jacquesm 10y agoBoth Oracle and Microsoft use some pretty creative means to inflate their income. See also 'free audits' by the BSA, which are nothing less than the setup for a shakedown. I've seen quite a few companies that waved the need for such an audit only to be presented with a bailiff and some guys in suits claiming to have received 'information' about illegal software being used on the premises. This can get ugly - and expensive - real fast because in a large enough corporation it is stupidly easy to miss a detail and this will then be used to put in a claim of a few 100K worth of extra licenses that you need to buy to make the problem go away. It's the mafia, only now with bits and bytes and weird licensing terms that only they know how to interpret. This is one of the main reasons why everything I do uses open source. The only time these companies still get some money through me is when I buy new hardware and MS levies their tax. If all Oracle and Microsoft wanted to do was to 'sell some products and services' that would be one thing. But really what they want is to extract as much money from companies that use their products as they can get away with and if they have to use strong-arm tactics on sufficiently locked in customers to get that they'll be more than happy to do so. The obvious defense - you don't have to do business with them at all - is one that is becoming a more and more viable choice. Twice now I have encountered a company that had transformed their internal applications to be web based using Apple products rather than Microsoft and licensing terms and costs were the main reasons given. I suspect this is going to be a trend of sorts and maybe this will be one backdoor that will allow 'linux on the desktop' to enter companies too (it would allow them to re-use the hardware they already have). Of course MS has a whole 'TCO' dog-and-pony-show to prove that you'll lose money that way, based on all kinds of funky reasoning which sounds believable to pointy haired bosses. It would be nice if 'the new Microsoft', Oracle etc. stopped waging war on their customers.
- ddorian43 10y ago
- ccrush 10y agoActually, companies exist to allow investors to put money up to finance a certain venture without liability for the actions of the employees and representatives of the company. So if you, for example, decided to invest in a company but do no work for that company, and then the company's employees use your money to buy a boat and attack other boats and steal their cargo and sell it for a profit then you could sell your shares in the company for a huge profit or get paid dividends once the company sells the pirated goods. And you couldnt be sued for their actions. Historically, corporations were invented specifically for businessmen to be able to invest in state-sanctioned piracy in the middle of the second millenium in Europe. Today, their purpose is pretty much the same, except instead of robbing sea-faring merchants, they're robbing their customers. In any case, making money is a side-effect of corporations. They could be losing money but growing tremendously and if they continue to attract investors then they are still technically a successful company.
- vmateixeira 10y agoSpot on
- a_imho 10y agoI would wager in some way it is more honest to state you are doing professional business and here for the money, than creating mottos about disruption and doing good (or not doing evil) etc. The surprising part is when customers of BigCo could be borderline labeled as fans - for me, at least.
- you_eeeeeediot 10y agoI hate Oracle with a burning passion. How that company has survived all these years is baffling to me, who is still paying their ridiculous maintenance contracts? Also, fuck Larry Ellison.
- tyler_larson 10y agoOracle whistleblower suit raises questions over Oracle accounting. FTFY.
- firebones 10y agoCan anyone with a finance/CFO background give a primer in how a) to detect such aggressive accounting in a cloud company's earnings statements and/or b) what aggressive means in this context? It would be nice to have a field guide to how to spot those without bathing suits when the tide goes out.
- foota 10y agob. Just from the article I think the aggressiveness in this case was probably doing something like assuming that current subscriptions continue for longer than they've received payment, and then counting that entire time as revenue.
- danielconde 10y agoFrom what's listed in the news story, we don't know that, but the point of the article is not to single out Oracle, but to realize that financial accounting for cloud software products is a grey area that affects many firms -- including those that sell it, and even the buyers, and having clearer standards will benefit everyone.
- vectran 10y agoa) All IFRS (International Financial Reporting Standards) compliant financial statements will have a accounting policies statement preceding the 'Notes to the accounts'. This accounting policy section will outline how revenue is recognised and how this is recorded in the financial statements. There is a trend for financial market regulatories to require auditors to provide a summary of 'key audit matters' in their opinion to the accounts - which details the key risk areas in the financial statements for an entity. b) Aggressive in this context likely means that revenue (and earnings) were being improperly accounted for in the current period. My guess in this context relates to revenue recognition. For instance if I sell SAAS product for $1000 setup and $100 per month and I expect the customer to stay on average 10 years - how do I recognise this revenue? The aggressive accounting would recognise revenue of $1000 (setup) and $1200 (subscription) in the first year. But it may be fairer (and potentially more appropriate) to recognise $100 (10% of the setup costs as customer expected to stay 10 years - apportion over this period) and $1200 (subscription) in the first year. On this simple alteration in treatment revenue could differ from $2200 to $1300. NB: This is an oversimplification and the actual recognition criteria depends on scenario, nature and company policies. Cloud accounting (read: SAAS) is still relatively new and very different to traditional licensing and the accounting/finance community is still grappling with the recognition and treatment.
- jondubois 10y agoIt's horrible how large companies always try to frame whistle-blowers as 'disgruntled employees' and use the media to publicly shame them and make them unemployable. An employee who was fired (for whatever reason) is always going to be much more likely to blow the whistle than a happy employee who is still receiving pay cheques from their employer. Just because someone was fired doesn't mean that there is no substance behind their claims. Also, 'poor performance' is highly subjective... Maybe Oracle was looking a very specific kind of 'performance' which was outside of the legal/ethical boundaries of that employee. Regarding the Oracle cloud sales not doing well, this isn't surprising. I am more surprised by the fact that Oracle shares are still performing well on the stock market. I can't think of a single Oracle product that the software engineers of today are actually excited about. The terms that come to mind when I think about Oracle are 'legacy', 'lock-in', 'expensive' and 'inflexible'.
- needusername 10y ago> I can't think of a single Oracle product that the software engineers of today are actually excited about. Java Mission Control. Yeah 'lock-in', 'expensive' and 'inflexible' all apply but it's quite amazing.
- toyg 10y agoDo you mean JRockit Mission Control? ;) a product Oracle bought, not developed...
- needusername 10y agoWell BEA bought it was well.
- cafard 10y agoAh, the disgruntled employee. Many years ago, I saw a notice on a company bulletin board stating that a couple of executives had been indicted based on testimony by a disgruntled former employee. It turned out presently that he was disgruntled because he had been caught by the feds and had done a plea deal. Within a few months the executives were off to Allenwood.
- deleted 10y ago[deleted]
- 6stringmerc 10y agoAhh, another example of "Creative Accounting" as I like to call it. Sort of like "Creative Writing," but instead of writing up a fictional story, it's about moving numbers and creating plotlines that aren't true but look pretty good on paper. My how I loathe it. On the flip side, I would like to think one of the most talented gentlemen in such a dog-shit-ethics-gutter, Mr. Andy Fastow[1][2], would be an excellent comentator on this subject. [1] https://en.wikipedia.org/wiki/Andrew_Fastow https://en.wikipedia.org/wiki/Andrew_Fastow [2] http://www.bloomberg.com/news/articles/2012-03-22/enrons-andrew-fastow-the-mistakes-i-made http://www.bloomberg.com/news/articles/2012-03-22/enrons-and...