would think of adding SUNW to that list.
I'd sure as hell pick SUNW over ORCL -
Complaints over Oracle sales tactics are swelling
By Noam Levey
Knight Ridder Newspapers
SACRAMENTO, Calif. — Under fire for pushing California to sign an enormous and costly software contract, Oracle has defended the deal as a bargain and insisted it would never mislead such a valued customer.
But California is not Oracle's only dissatisfied major customer. From Georgia to Canada, public officials and private companies are complaining the Redwood Shores, Calif., software giant misled them, too.
Georgia forced Oracle to renegotiate a major software deal after state officials concluded they would not save as much money as Oracle had promised.
In Toronto, city officials are trying to shed a deal that they say burdened them with thousands of database licenses they don't need.
In Ohio, state officials pulled the plug on an Oracle deal after they decided Oracle had inflated the state's need for software.
Last week, an Ohio jury ordered Oracle to pay $13 million to an auto-trim company for selling software that didn't work.
Oracle, which remains a popular software vendor nationwide, declined comment. It is working with California to void the state's deal. Oracle representatives have said the company wants to satisfy California officials.
But as company officials prepare to testify in two weeks before a legislative committee investigating the state's multimillion-dollar deal, Oracle is being forced to defend its sales practices.
Technology analysts warn software buyers to exercise care with Oracle and its famously high-pressure sales teams.
"Oracle has a long tradition of aggressive sales and pricing tactics," said Betsy Burton, an analyst with Gartner, the Stamford, Conn., market-research group, which has been critical of Oracle. "But the fact is that today, they are losing business to Microsoft and IBM because of their tactics."
California assemblyman Dean Florez, the Bakersfield Democrat leading the legislative inquiry, said last week he plans to take testimony from other states that have had run-ins with Oracle.
Software to track data
California for decades has relied on Oracle database software to track data from criminal-justice records to payrolls. But the company's efforts last year to sell the state on consolidating its software purchases have come under increasing scrutiny since a San Jose Mercury News investigation last year.
In April, the state auditor concluded the $95 million to $123 million contract, initially promoted as a way for California to save more than $100 million, could cost the taxpayers millions of dollars for unneeded software.
The auditor singled out Oracle for its "high-pressure sales tactics," particularly pressing officials to complete the deal before the end of Oracle's fiscal year.
The company's tactics came under further attack recently when e-mail released by the legislative committee investigating the deal showed that Oracle and another company plotted to hide information from skeptical state officials.
Oracle has vehemently denied it did anything improper. The company points to its own analysis of the contract, which shows that it could save taxpayers more than $100 million over the next decade.
Satisfied customer
Oracle also can point to other satisfied customers. Montana, which signed a similar, though much smaller, software deal with Oracle three years ago, is having no problems with its $5 million contract, according to Tony Herbert, the state's deputy chief information officer.
"It's worked for us, and we're sticking with it," Herbert said. "Oracle is aggressive in trying to sell its products, but we don't begrudge them that."
There are customers that do, however.
Last year, the state of Georgia, which signed a sweeping agreement with Oracle amid promises that the deal would save the state millions of dollars, forced the company to renegotiate after Oracle dropped the price of its software soon after the contract was signed.
The price cut, which the company had not disclosed to the state, significantly eroded the promised savings. The state recovered the savings after reworking the deal.
In Toronto, meanwhile, city officials are trying to unravel a $13 million deal with Oracle that officials say stuck the local government with thousands of database licenses it will never need.
Ohio cases
The state of Ohio also ran into problems with Oracle last year when the company pressured state officials to buy thousands of licenses before May 31, the end of Oracle's fiscal year, according to Cnet.com, an Internet tech-news site that also reported the problems in Toronto.
Ohio reportedly avoided committing the same mistake California did when it double-checked Oracle's projected savings and found that the company vastly over-estimated the number of licenses the state would need.
Cnet reported that the state found that Oracle's figures were 15 times higher than what the state estimated it would need this year.
But technology analysts have warned Oracle will continue losing business unless it changes its approach.
In August, Gartner issued a blistering report on Oracle's sales tactics. "The issue is a loss of credibility," it said, citing pricing strategies and other actions. "These missteps enforce the perception in users' minds that Oracle is difficult to work with and, worse, would take advantage of its customers when it is under pressure to increase revenue."
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