Channel News and Analysis - Channel Insider
Empowering the next generation Channel
 

Bull’s Eye Awards
Nominations Open for Channel Insider 2009 Bull’s Eye Awards
Nominations are now open for the Channel Insider 2009 Bull’s Eye Awards, which recognize excellence in customer service, technology prowess, business acumen, channel leadership, communications and community building, and innovation among vendors, solution providers, distributors and channel services companies.



Sponsored Links
  • Control VM Sprawl, What You Don’t Know Can Hurt You
  • FREE Sophos Encryption Tool: Encrypt, compress and share files easily
  • LSI 6Gb/s Portfolio Expands to Include SATA+SAS HBAs
  • Reduce the cost of managing your mobile workers.
  • Find out 7 Ways to Drive Data Center Efficiency
  • SonicWALL breaks through network and email gridlock
  • Save up to 40% on calling costs with Avaya Aura™



  •  

    Oracle's Two Faces of the Channel

    in Channel News and Analysis


    Article Rating:starstarstarstarstar / 2
    Article Views: 1927

    Rate This Article:
    Add This Article To:
    The database giant often shows two conflicting sides to its channel partners.

    Even as Oracle trumpets its expanded and improved channel partner program in the weeks ahead of its OpenWorld Partner event, the company's percentage of indirect sales has actually declined by 5 percent over the past few years.

    It's a tale of two Oracles. One has expanded programs for partners and hired partner-friendly executives. Another readily admits that the 5 percent decline is not a concern and the company is not looking to increase its percentage of indirect sales.

    Doug Kennedy, senior vice president of alliances, admitted the decline during a recent interview with Channel Insider. One of the reasons Oracle is unconcerned is that total dollars coming from the channel have gone up, as have Oracle's total revenues. Channel sales just have not grown as quickly as direct sales.

    Oracle's percentage of revenue from indirect sales fell from 45 percent in fiscal 2005 to 43 percent in fiscal 2006 and then to 40 percent in fiscal year 2007.

    "We are fine with that 40 percent," he said. "Forty to 50 percent is where we'd like to be."

    Kennedy said that Oracle's analysis of the decline in the percentage of sales from the channel revealed that much of it is due to the integration of the company's many acquisitions. Several of the acquired companies, he said, had weaker channel programs than Oracle, so integrating them has hurt Oracle's indirect percentage.

    But at least one partner believes the strength of the acquired companies' partner programs has improved Oracle's own channel offering.

    Resource Library:
    "The infusion of personnel from Oracle's acquisitions has helped the channel," said Bradley Brown, CEO and chief architect of TUSC, an Oracle Certified Advantage solution provider partner based in Chicago. "Many of those people are much more channel-oriented than the old guard at Oracle."

    Read here about Oracle's attempt to woo SMBs.

    He also gives credit for Oracle's channel improvements to Rauline Ochs, a former channel executive at BEA Systems and IBM who joined Oracle in 2003.

    "[She] is the force behind the improved channel," Brown said, adding that Ochs has received a lot of support for improving the channel from senior executives at Oracle. And Brown is not alone in his assessment of Och's influence.

    Tiffani Bova, research director of IT channel sales, programs and alliances for Gartner, said Ochs has been "more embracing of the channel."

    "Oracle is a different Oracle than it was in the past," Bova said. "It has taken awhile for [Hewlett-Packard] to build a solid channel program, and like HP, part of what Oracle has been doing is getting the infrastructure in place to support channel business, getting employees to support the channel business."

    Page 2: Oracle's Two Faces of the Channel

    But not everyone agrees that Oracle has mended its channel-offending ways.

    "It has never been a partner-friendly company," said Michael O'Neil, founder and CEO of Toronto-based analyst firm IT in Canada. "Oracle has been successful finding a strategy that values a direct-sales-driven culture and has taken out a lot of competitors by acquiring them."

    Oracle currently employs a deal registration program to minimize channel conflict between the company's direct sales force and its partners, Kennedy said.

    "Partners are still free to go ahead and compete," Kennedy said. "We look at whether it is a green field opportunity or whether it has been on Oracle's radar. If it is on Oracle's radar, we look at who is in the best position to close it in the most expeditious manner. And it depends on the situation. We are trying to lower overall cost of sales."

    O'Neil said that companies that have traditionally followed a direct-sales model often have trouble converting to support a channel-friendly structure. It is coded into their DNA, he said.

    "There's a feeling in some parts of the industry—not pointing a finger at Oracle or anyone else—that 'real men sell direct,'" he said, calling it a part of the corporate culture.

    Oracle first made the 40 percent number public during a prerecorded Webcast with Kennedy and Ochs offered to media outlets on Oct. 29. Kennedy did not mention the decline in channel sales percentage at that time. During the Webcast Kennedy touted Oracle's channel statistics from the past year—Oracle now has 19,500 partners, a 10 percent increase year over year; did 103,500 transactions last year through the channel; and now has 9,100 ISVs, up 7 percent year over year.

    Oracle also announced several improvements and expansions to its channel program during the recent Webcast.

    Among them were training partners to the same level it trains internal sales staff, expanding its solutions catalog to include more than 4,600 partner profiles, a simplification of support pricing for partner development and demos, ISV solution maps to increase the visibility of partner products in the market, the Oracle Partner Network Competence Center, and plans to launch a social networking platform for partners to interact with each other.

    Click here to read more about Oracle's Partner Network Competence Center.

    As growth in the large enterprise market slows and midtier enterprises show the most promise for growth, Oracle has had to adjust its attitude toward the channel, which usually sells into those midsize businesses.

    "Oracle at some point has to face up to a real challenge in dealing with the midmarket in how to expand beyond its big enterprise stronghold in the marketplace," said O'Neil. "Partners are important to that, but making products available for sale is different from selling them. Over time you win together and you lose together."

    That's not an approach that Oracle has traditionally followed and is one the company still needs to learn, he said.

    "Microsoft is not ideal in all circumstances but understands that it relies on the ability of its partners to structure its value propositions inside customer organizations," O'Neil said. "That's not something that is clear to companies that deal with direct-sales tactics."

    Sharon Linsenbach also contributed to this article.



    Discuss Oracle's Two Faces of the Channel
     
    You have a few things right in the article however you could do some further digging...
    >>> Post your comment now!
     

     
     
    >>> More Channel News and Analysis Articles          >>> More By Jessica Davis
     


     


    [ci] feeds
    XML
    Add Channel News, Product Reviews, Trends and Analysis to your RSS newsreader or My Yahoo!


    HTML PLAIN TEXT

    Keep on top of news for VARs and Resellers with CI's Weekly Newsletter and Alerts.

     


    CHANNEL RESOURCE CENTER
     
     
    Enterprise Mobility Zone
    The Enterprise Mobility Zone (EMZ) blog is a tool designed to help senior IT executives discuss, create and deploy next-generation mobile strategies in their organizations.
    Go beyond yesterday's tactical approach to mobility!
     
    Build A More Efficient Data Center
    Demands are growing but budgets are not. Solve your pressing IT issues using the resources you already have. Determine which technologies can help you drive efficiencies and how they are applied. Gain a quick ROI on new initiatives
    Find out how
    Let Enterprise TechBrief do the work for you. Aggregated content, tech news, product reviews, vendor updates, how-to’s—all you need to boost your efficiencies and cut costs, all from one place.
    enterprisetechbrief.com