Oracle Didn’t See the Data Reckoning Coming

Oracle Corp. has spent five years and billions of dollars getting really good at following people around the internet. Six acquisitions reportedly totaling at least $3 billion since 2014 helped make the database company a big name in the field of advertising software. That’s an inoffensive term for a suspect practice: scooping up personal data and selling it to big brands, letting them track customers’ browsing activity and connect purchases to social media profiles. But in the time it took Chief Executive Officer Mark Hurd to assemble this miniature panopticon, the panopticon business started to look a lot riskier.

Facing tough questions about its practices over the past year, Oracle’s advertising software division, known as Data Cloud, has implemented previously unreported dismissals. While Data Cloud has always been a small part of Oracle’s overall sales, Hurd, co-founder Larry Ellison, and other executives repeatedly cited it over the years as a bright spot in their otherwise humdrum business. That appears to be over. Investment bank Stifel Nicolaus & Co. estimates that Data Cloud delivered only about $500 million of Oracle’s $40 billion in sales last year. “What happened over the past couple years is, the nebulous concerns people may have had about what companies were doing with personal data all of a sudden became very real,” says Blair Hanley Frank, an analyst at ISG, a technology research and advisory firm. “The risk to Oracle in all of this is what seemed like a somewhat ignorable value-add business a few years ago could all of a sudden become a big scary bugbear.”