Oracle Adds New Channel on March to Midmarket Success

Setting its sights on the small and midsize business marketplace, Oracle Corp. has called on three large distributors to build a channel to reach those customers.

The software giant also signed a reselling agreement with PC maker Dell Inc. to carry the Oracle E-Business Suite and JD Edwards applications.

The distributors are Avnet Inc., Ingram Micro Inc. and Tech Data Corp.. Oracle has charged the distributors with developing new channels and reseller partnerships aimed at bringing its complete product line to midsize businesses (which it defines as $25 million to $500 million in sales).

It is Oracle’s first significant move to a channel program for the market and part of the company’s larger strategy to land a stake in the market it has so far been absent from.

The Redwood Shores, Calif.-based company has been on a buying spree, scooping up companies—PeopleSoft Inc.
in January, Retek Inc. in April, ProfitLogic in July and Siebel Systems Inc. (announced for 2006)—to build a portfolio of midmarket products and solutions.

“We’re breaking the myth that Oracle is built for enterprise space solutions only,” said Judson Althoff, Oracle’s vice president of global platform and distribution alliances. “We’re making sure that we have products that are workable and scalable to the midmarket and a portfolio of reseller solutions that make it worthwhile to the market.”

Avnet, Tempe, Ariz., will work to create a focused cadre of resellers to deliver Oracle’s business applications, namely Oracle E-Business Suite Special Edition and JD Edwards Enterprise One offerings.

Ingram Micro, of Santa Ana, Calif., and Clearwater, Fla.-based Tech Data will tap their vast communities of resellers to create a high volume channel to deploy Oracle’s entire technology line, including Oracle database and Oracle Fusion Middleware, to the market.

The strategy is expected to yield hundreds of new VARs in the first year, Althoff said.

“We believe that with the investments made in technology over the last five to seven years, [businesses] made security, point solutions [and] backup a high priority, but ERP hasn’t really been addressed,” said Scott Abbott, Avnet’s vice president of Technology Solutions. “There is a huge opportunity for spending there. We believe that instead of having them go to three different sources—hardware, software, implementation, maybe another for advising—we’re taking a lot of things and consolidating them into a single-source, cost-effective, quick ERP solution.”

Rather than develop its own channel program, Oracle sought the distributors to leverage their partner contacts in a channel they are unfamiliar with and to help scale Oracle’s support programs to a high-volume channel.

Avnet is seeking a relatively small group of resellers willing and able to invest time, resources and manpower in the partnership. Full partners will need to dedicate sales and technical staff exclusively to the partnership.

The distributor also is seeking a second tier of VARs, called “opportunity identifiers,” to help develop and implement sales leads for commission. These VARs “may not have the wherewithal to step up fully, but they may have a role in the market to help bring the solution to customers and close deals,” Abbott said.

Avnet and Oracle expect to build an ecosystem of ISVs and VARs building solutions and selling Oracle to a community of buyers who will expand their systems using Oracle, Avnet and partnered VARs.

Avnet will also use its Managed Technology Center, a multimillion-dollar facility of servers and main frames in Tempe, Ariz., to host the applications for interested customers.

The partner program through Ingram Micro will be a high-volume channel, officials at both organizations said.

“We want to get the product accessible,” Althoff said. “We’ve been doing a lot of business in the midmarket, but there’s a class of resellers our competitors have been able to reach that has been out of reach to us. This broadens the access to the entire product line to a whole new community.”

Because the product line is new to most of Ingram’s 35,000 resellers, partners will receive extensive training, marketing and sales support from both companies, said Jodi Honore, Ingram’s vice president of vendor marketing. Ingram and partners will also employ the company’s data mining and customer profiling tools; pre- and post-sales technical support offerings; and financial services, such as financing and leasing opportunities, to facilitate sales opportunities.

Tech Data will provide new and existing Oracle resellers with pre- and post-sales and support including authorization assistance, quote and bid preparation, and order entry.