What the Sun Oracle strategy means for Avnet and Arrow

A long time Sun solution provider in Canada posed a question that I did not have an answer for. And, after taking part in a five hours marathon Sun Oracle briefing session via Webcast I can’t say I heard an answer from Oracle either.

The question was what is going to happen to Sun’s top two distributors Avnet and Arrow now that Oracle wants to take business direct. Currently, Arrow and Avnet build Sun solutions for the channel.

Oracle president Charles Philips said that Oracle will be building complete systems with Sun technology in hand for larger customers.

Does this mean Arrow and Avnet are shut out?

I listened a Q&A session after the Webcast/briefing hosted by John Fowler and Judson Althoff of Oracle and was unable to ask this questions since it was just a listen only session. People in the room with the executives could ask questions, but no one addressed this scenario.

The other aspect that seemed troubling for distribution was Oracle’s decision to leave the X86 market except for grid computing and high performance computing. A lot of distributors ship these kinds of products with Oracle solutions on them. Althoff did say during the Q&A session that he expects to work with competitors such as HP and Dell and use their sales channel. “We do not expect to change a thing. In the volume X86 market it is business as usual,” he said.

Althoff added that Oracle understands co-opetition and will work with competitors for customer benefit. Let’s not forget that IBM is a large Sun service provider under an alliance agreement.

Company chairman Larry Ellison addressed the direct issue as well. He said that Oracle wanted to regain customer insight and felt that the best way was to sell direct and work directly with these accounts and their large user group associations. “If there is an issue with Sun or Oracle, customers can deal with us so we needed a direct relationship with customers and with user groups. This allows us to plan and improve our products. And, it will vary from industry-to-industry. For example, retail may think differently that banking,” Ellison said.

I think Althoff or Philips or Ellison have to address this issue with Arrow and Avnet and the channel partner base immediately. I understand that Oracle is going on a 70 city tour to explain the Sun Oracle strategy on a local basis and I think that is a good idea, but they need to answer these questions now.

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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