“Whistleblower” accuses Oracle of cooking its cloudy revenue books

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A former Oracle employee is taking the database giant to court, claiming the company fired her for refusing to inflate its cloud-based revenue figures.

Svetlana Blackburn claimed in a whistleblower lawsuit filed in San Francisco on Wednesday that her dismissal from the company last year was due to her refusal to artificially inflate the figures. Her dismissal, which took place on October 15, 2015, came just two months after she received a positive performance review from her employer, Reuters reports.

The filing alleges that Blackburn, who was a senior finance manager at Oracle, was told by her bosses to “add millions of dollars in accruals to financial reports, with no concrete or foreseeable billing to support the numbers, an act that plaintiff warned was improper and suspect accounting.”

Blackburn also alleges that senior executives at Oracle padded cloud revenue figures on several occasions despite her objecting to it. After she threatened to “blow the whistle” on what they were doing, bosses told her she was “irritating”, and a few weeks later she was dismissed, the lawsuit claims.

Reuters says that Blackburn refused to cooperate with her bosses because the company’s accounting techniques were at odds with the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Blackburn has now filed for whistleblower status, which if granted would guarantee her both immunity from prosecution and also a percentage of any fines levied against Oracle, if her allegations are proven true.

No doubt she faces a tough job to prove she is telling the truth, for Oracle’s well-oiled legal machine already seems to be gearing up for a fight.

“We don’t agree with the allegations and intend to vigorously defend the matter,” Oracle spokeswoman Deborah Hellinger said in a statement.

As is the case with many legacy software firms, Oracle has mixed emotions about the cloud computing revolution. While cloud is all the rage and Oracle has belatedly accepted that, it still makes the bulk of its profits from traditional software license sales. However, those sales are on the wane, and its best growth opportunities lie in the cloud, which means the company needs to show its investors it’s doing everything it can to pursue them.

In its most recent quarter, Oracle’s profits were 14 percent down from one year before, but cloud revenues were a bright spot – up 58 percent from the year before, with software-as-a-service (SaaS) and platform-as-a-service (PaaS) revenues adding up to $583 million.

That’s assuming Oracle’s figures can be trusted anyway.

One circumstantial factor in support of Blackburn’s claims is that several industry analyst firms have previously raised concerns about how tech firms are reporting their cloud numbers. For example, Gartner Inc. issued a report last January saying that many companies have been artificially raising their cloud revenues. In the report, it called out Oracle as one of the guilty parties for counting some of its hardware leases as infrastructure-as-a-service (IaaS) sales.

Blackburn is asking for a jury trial, something Oracle may not be so keen on following the result of its most recent court case.

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