After acquiring 47 different companies that helped create a portfolio of more than 9,000 products, Oracle is turning to the channel more aggressively than ever to help drive sales in its new fiscal year.
But the question that remains unresolved is just what the Oracle channel may ultimately look like once it goes through a period of extended contraction that is going to be brought on by the very mergers and acquisitions that Oracle ignited.
Oracle laid out a channel strategy this week that is designed to push partners to sell a broader array of products. To facilitate that effort, Oracle is creating a partner enablement program that hinges on a three-tier training strategy that adds free third-party training and free access to online training as a complement to the current Oracle University program.
Partners will still need to gain certifications through the official Oracle University program. But the Oracle channel team is hoping that partners will sell more Oracle products if they find it easier to learn how to initially support them.
As part of this effort, Oracle has also revamped its channel Web site by adding social network tools that will facilitate more partner-to-partner networking. The company hopes social networking will bring partners together on projects that result in more Oracle products sold and installed.
The issue at hand is that following all these mergers and acquisitions, Oracle has a large number of partners that only sell a limited number of Oracle products. For example, partners that sell Oracle database products typically don’t sell a lot of security or business intelligence products. To help resolve that issue, Oracle is encouraging partners to specialize in business intelligence, service oriented architecture, security and collaboration technologies. On the applications side of the house, Oracle is encouraging partners to sell software-as-a-service applications such as CRM, which they forecast will pass on-premise CRM software revenue for Oracle sometime in 2009.
Oracle also said it would restructure its sales organizations to create a model where it relies on partners to sell into accounts where customers have less than $50 million in revenue. Oracle sales teams will then focus on $50 million and above in conjunction with partners and Oracle’s direct sales force.
As part of its efforts to increase sales, Oracle is also putting a premium on recruiting independent software vendors. Historically, Oracle has tended to fare well with accounts that have dedicated database administrators, while Microsoft has tended to win the day with developers that build applications on top of SQL Server. Oracle is now trying to cut into Microsoft’s base by recruiting application software vendors that can pull other Oracle products through the sales cycle.
To oversee its expanding focus on the channel, Oracle has also created a new National VAR team that will help solution providers work with Oracle sales people across multiple geographies and specialties.
Right now, Oracle executives said the channel contributed about $1 billion of revenue in its fourth quarter. But in order to meet aggressive sales goals for this year, the company needs a more programmatic approach to managing the channel.
They also made it pretty clear that Oracle salespeople will favor solution providers that have more expertise in Oracle products. That only stands to reason because salespeople are always looking for the most rewarding path of least resistance when it comes to making a sale. And at the end of the day, Oracle wants its salespeople and channel partners to sell more high-margin products that wrap around the Oracle database in a way that makes it difficult for the customer to replace the Oracle database with lower cost offerings.
That simple issue should conspire to push solution providers to broaden their portfolio of products. Some of them may choose to do that by investing in organic growth. But many solution providers will find that emulating Oracle is the best path to finding the most profit and channel support from Oracle.
As Oracle President Safri Catz said when she told the partners they could expect more acquisitions from Oracle in the future. “The strong get stronger in this type of environment.”
The core question for the partners then becomes are they going to be buyers or sellers given the current environment.
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