Oracle blamed the slowing economy, saying its customers were putting software purchases on hold at the last minute. With the lack of revenue growth, it's going to be difficult for them to get that kind of savings. Oracle will announce third-quarter earnings next week. For one thing, Oracle has outsourced much of its lower-margin business to systems integrators, Shilakes said. Still, that does leave hundreds of millions of dollars of savings attributable to e-business applications.
Customers also file their bug reports online, and complete their own orders for products.
Reorganizing IT, procurement and human resources generated 45 percent of the savings in 2000 and will account for 28 percent of the savings this year. The company cut IT staff by 250, or 17 percent, and eliminated 2,000 servers, which will be auctioned off using Oracle's own e-business exchange software. Oracle reduced its overall head count to 41,000 from 43,000. Oracle provided financial incentives to overseas managers to fall in line with the reorganization. Oracle also consolidated ERP applications.