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According to Larry Ellison, one of the biggest problems that Oracle discovered when they acquired Sun was that sales compensation was based solely on the value

According to Larry Ellison, one of the biggest problems that Oracle discovered when they acquired Sun was that sales compensation was based solely on the value of the sale, with no requirement for the deal to make a profit. Their sales team had been merrily selling them to bankruptcy. [1] Geniuses with tech, but maybe not so good on the business side? https://www.barrons.com/articles/BL-TB-24039 https://www.barrons.com/articles/BL-TB-24039

tehlike 6y ago
Reminds of the saying: when a measure becomes a target, it ceases to be a good measure. Also a good read: https://www.atlasobscura.com/articles/hanoi-rat-massacre-1902 https://www.atlasobscura.com/articles/hanoi-rat-massacre-190...
- hassancf 6y ago
  Interesting. “But then there started to be curious sightings, all around town: Rats, alive and healthy, running around without their tails. It turned out the hunters would rather amputate a live animal’s tail than take a healthy rat, capable of breeding and creating so many more rats—with those valuable tails—out of commission. There were also reports that some Vietnamese were smuggling foreign rats into the city. And then the final straw: Health inspectors discovered, in the countryside on the outskirts of Hanoi, pop-up farming operations dedicated to breeding rats.”
slgeorge 6y ago
I'm sorry but first the majority of software companies focus their sales compensation on the contract value (TCV) rather than the profitability. It's not generally the sales teams job to evaluate profitability, that the product/commercial teams job by setting out the lines of discount. The reason is that for most tech companies you want to maximise your market reach. More importantly, I wouldn't trust a word that Larry Ellison says - particularly when the primary purpose of the article was to boost the Oracle share price by explaining that Sun would be additive to that quarters profits. I'm not saying that Scott McNeally or Jonathan Schwartz were great execs - I have no idea - but I think you have to look at the goal of the article.

tehlike 6y ago

Reminds of the saying: when a measure becomes a target, it ceases to be a good measure. Also a good read: https://www.atlasobscura.com/articles/hanoi-rat-massacre-1902 https://www.atlasobscura.com/articles/hanoi-rat-massacre-190...

hassancf 6y ago
Interesting. “But then there started to be curious sightings, all around town: Rats, alive and healthy, running around without their tails. It turned out the hunters would rather amputate a live animal’s tail than take a healthy rat, capable of breeding and creating so many more rats—with those valuable tails—out of commission. There were also reports that some Vietnamese were smuggling foreign rats into the city. And then the final straw: Health inspectors discovered, in the countryside on the outskirts of Hanoi, pop-up farming operations dedicated to breeding rats.”

slgeorge 6y ago

I'm sorry but first the majority of software companies focus their sales compensation on the contract value (TCV) rather than the profitability. It's not generally the sales teams job to evaluate profitability, that the product/commercial teams job by setting out the lines of discount. The reason is that for most tech companies you want to maximise your market reach. More importantly, I wouldn't trust a word that Larry Ellison says - particularly when the primary purpose of the article was to boost the Oracle share price by explaining that Sun would be additive to that quarters profits. I'm not saying that Scott McNeally or Jonathan Schwartz were great execs - I have no idea - but I think you have to look at the goal of the article.