Oracle, Sun Deal to Shine on Channel Programs?

While Oracle’s acquisition of Sun my have surprised a lot of people, the instant it was announced it made immediate sense to many. Oracle’s and Sun’s technologies and other strengths are complementary, not competitive, with each other. Database and applications get an operating system and hardware. The deal combines Oracle’s sales-led organization with Sun’s engineering focused organization. Not to mention that Sun is just a 20-minute drive down 101 South from its new owner, Oracle—combining two companies within the Silicon Valley venue and culture.

Sun’s Solaris is the most common operating system platform for Oracle’s database and applications software, according to the companies. And Sun’s efforts to win with cloud computing give Oracle something it needs—a competitive play against SAAS (software-as-a-service) application company Salesforce.com.

Sun’s partners will get a strong database and application play that they didn’t have before, while Oracle’s will get an OS, hardware and other software—plus all of Sun’s green, open-source and data center initiatives. Oracle has said that it plans to keep and continue to grow Sun’s hardware investments.

Indeed, the deal combines two technology giants and makes them more competitive in the data center and in cloud computing against the likes of IBM, Cisco and SAP, areas that are heating up even in this recessionary year.

“Oracle plans to engineer and deliver an integrated system—applications to disk—where all the pieces fit and work together so customers do not have to do it themselves. Customers benefit as their systems integration costs go down while system performance, reliability and security go up,” says Oracle President Charles Phillips in an open letter released together with the announcement of the deal with Sun.

But what about Oracle’s and Sun’s reseller channel partner programs? While both Oracle and Sun have gone through phases of being considered unfriendly to the channel, both companies also offer large reseller channel partner programs with thousands of partners.

Oracle claims more than 21,000 channel partners worldwide and has said that it targets between 40 and 50 percent of business to come from its indirect channel. Yet in North America much of the company’s revenues come from direct sales while indirect sales are stronger in other geographies. That’s not something Oracle has wanted to change, and it’s unclear what that will mean for Sun’s channel partners now that they will come under Oracle’s umbrella.

Sun, with more than 11,000 channel partners worldwide, has said that 70 percent of its revenues come from its channel partners—a much higher percentage than Oracle’s.

Oracle’s statements around the acquisition indicate that Sun partners will become part of Oracle’s larger channel partner program, and the companies say the deal will benefit partners of both companies. After the deal closes, Oracle says Sun partners will get access to the Oracle PartnerNetwork, a unified partner program, along with all its benefits and training options. Oracle also says that it will continue Sun education programs after the deal closes.

“Oracle and Sun partners are expected to benefit by working with a single vendor to address customer needs for enterprise systems,” Oracle says in a Q&A document about the acquisition of Sun.

“After the closing, Oracle partners are expected to benefit from improved access, support and training for Sun products and solutions. Sun partners are expected to benefit from Oracle’s increased support of Sun partners and increased investment in the combined solutions. Both companies’ partners are expected to benefit from the complementary solutions that provide an opportunity to increase business value and drive down the total cost of ownership through an integrated, standards-based enterprise product stack.”