Oracle needs the channel, but it’s still direct first

Broomfield, Colo. – Addressing an audience of largely Sun Microsystems legacy partners at distributor Avnet Technology Solutions’ annual Summit conference, executives from Oracle Corp. (NASDAQ: ORCL) said they want and need the channel, but the company is and will remain a direct-sales first company.

If a partner specializes, defines their value-proposition and adds value, there is a place for them with Oracle. And Oracle does need the channel said Tom Wagner, Oracle’s global vice-president, North American alliances and channel sales. The biggest opportunity they see for the channel is tapping the 130,000 Oracle customers today that are greenfield to Sun and showing them the value of running integrated Oracle software and applications on Sun hardware, adding Oracle is working to ensure that integration is as compelling as possible.

“I know there’s a lot of uncertainty in the room and in the market about the value for you, and I know we maybe haven’t given you enough information about where we’re heading,” said Wagner. “But the opportunity ahead is incredible, and you play an important role in that. Trust me, we do need you desperately.”

While Oracle will remain direct-sales focused and Wagner doesn’t see major shifts in channel centricity, he does believe the size of the overall pie will grow substantially, creating a large business opportunity for partners.

In its named accounts, Wagner said Oracle will be looking to the channel to play a services role, and supplement Oracle’s direct team in areas it’s unable or unwilling to cover. For that business though, he said Oracle will be favouring those partners that have invested in specialization and certification.

“As long as you’re delivering value, there is a place for you to play,” said Wagner. “OPN (Oracle Partner Network) is the key and specialization is a big deal for us, and key to differentiating in the market.”

Wagner added he wants Sun partners to move down-market, and he also wants them to focus on the services play.

“A service delivery capability is key to maximizing your opportunity in the marketplace,” said Wagner. “We’re not going to compete with you in the services space. We need you to complete this equation.”Wagner added Oracle will also soon be introducing an incentive program, emphasizing that it won’t be a rebate program. It will be managed by Avnet and Oracle’s other distribution partners, and will revolve around Oracle IP and focus markets.

While there may still be some hesitation in the channel, Avnet sees strong opportunity for the channel and for itself working with Oracle, and is investing in growing that business said Mike Hurst, who was recently promoted to head Avnet’s Oracle business worldwide as vice president, global supplier business for ATS.

And for those partners that are still hesitating, Hurst said not getting onboard now would be a mistake.

“Our industry is maturing, and a handful of dominant players are emerging. They’ll marry hardware, software and services and to deliver integrated, end-to-end stacks, and they’ll influence how we all go to market,” said Hurst. “We believe Oracle will be among those three to five dominant players.”

What Oracle offers the channel, said Hurst, is a legacy install base 10x Sun’s, an aggressive sales and marketing organization and a compelling integrated technology stack that offers an attractive value proposition for the channel.That’s not to say it’s been all sunshine and roses. Jeff Bawol, president of ATS Americas, said he knows channel partners have been frustrated with the flow and speed of information from Oracle. He encourages them to keep pushing Oracle on that, adding Avnet will keep pushing too.

He also advises partners to take advantage of deal registration, and resist the urge to hide their prospects. If the deal is registered, Oracle can’t step in and take it direct, claiming they didn’t know the partner was working it.

However, Avnet believes such wrinkles will be smoothed-out and pale beside the opportunity that’s now on the table, which is why Avnet is betting big on the Oracle relationship.

“The Oracle/Sun combination is a good, strong combination. One of the best in the industry. We just have to figure out how to do this,” said Bawol. “That’s why Avnet is hanging around. We think we add value.”Part of that value includes Avnet’s “Under Our Wing” and “Value Master” programs, which assist partners in creating roadmaps to achieve Oracle specializations and build their solution-selling expertise. Avnet has also commissioned a white paper from IDC on the current Oracle channel landscape.

“While the impending changes will result in some near-term challenges, IDC believes they will also present opportunities to those partners that quickly adapt and unleash Oracle’s key tenets for channel partners – delivering solutions and providing value-added services,”wrote IDC’s Chris Ilg. “Avnet is well-positioned to work with Oracle during this period of change in the channel and assist Sun channel partners with their transition into the Oracle OPN channel program.”

Follow Jeff Jedras on Twitter: @JeffJedrasCDN

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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