Oracle Rallies Exadata Software Partners, Launches VAR Incentives

Oracle President Mark Hurd says Oracle will triple Exadata’s installed base in fiscal year 2012 -- to roughly 3,000 installs. How will Oracle potentially achieve that goal? The apparent answer comes from Oracle Channel Chief Judson Althoff, who today launched the Exastack software partner initiative. Moreover, Althoff unveiled a new OPN Incentive Program designed to motivate VARs and VADs (value-added distributors) to sell specific Oracle solutions. Here's the update.

So far, roughly 50 software companies have tested their applications on Oracle’s Exadata platform. Going forward, Althoff says, Oracle will strive to certify dozens of software partners as either:

  1. Exastack Ready, meaning that the application is tested to work with Linux or Solaris; Oracle’s database; and Oracle’s WebLogic middleware.
  2. Exastack Optimized, meaning that the application has completed hands-on lab tests that prove the application runs best on Exadata and ExaLogic.
Oracle’s strategy is rather simple: Unlock the full power of applications on Oracle and Sun hardware. “The idea is to write once and deploy many; on premise; as your own SaaS model; or working with hosters who are deploying applications in the cloud,” said Althoff in an interview with The VAR Guy at Oracle’s headquarters on June 27. Althoff will follow-up the interview with Oracle PartnerNetwork FY12 Kickoff -- a series of global webcasts to partners on June 28 and 29.

Big Bet on Exadata

As part of Oracle’s fiscal Q4 2011 earnings release last week, Hurd predicted Oracle would roughly triple Exadata’s installed base. The Exastack ISV strategy is key to that. “It really is,” confirmed Althoff. “We went through internal reviews [at Oracle] to see if that goal was really achievable or was [CEO] Larry [Ellison] just cracking the whip. We can achieve those numbers  with help from ISVs.”

Still, some skeptics allege the Exadata and Exalogic integrate proprietary Oracle hardware and software into a single box, locking customers into Oracle’s product portfolio and returning customers to the age of the mainframes. “Yes and no is my reaction,” said Althoff. “Yes, it’s integrated and yes it’s all optimized and yes it does deliver more value. But no, there’s no lock-in. It’s Linux [or Solaris]. It’s a database. It’s Java. We’re talking about industry standard stuff. “

Meanwhile, some folks – including The VAR Guy – wonder if the Exastack strategy is designed purely for Oracle's global 2000 customers. Althoff says that’s not the case. He says channel partners and midsize customers can begin to see Exadata’s benefits by starting with a quarter-rack solution vs. a 16-processor HP blade environment. “The TCO pays dividends in the first year, and it grows dramatically over the next five years,” he added.

OPN Incentive Program for VARs, VADs

To help ensure VARs promote and sell integrated Oracle hardware-software solutions, Oracle has introduced the OPN Incentive Program -- a new piece of the Oracle PartnerNetwork partner program. The program relies on value-added distributors like Arrow, Avnet and Tech Data for administration, but there are transparent rebates for the VAR community.  Partners can qualify for Oracle rebates when they register deals that don’t involve Oracle’s top 2000 target customer accounts.

The new VAR partner program efforts have four goals for Oracle’s fiscal 2012, Althoff notes:
  1. Define target markets;
  2. Pinpoint the value proposition: Make sure software VARs and hardware VARs understand Oracle solutions are engineered to optimize hardware and software performance;
  3. Simplify the operational aspects of the partner program; and
  4. Deliver the right economic model to be competitive.

Oracle Won't Expand Services Organization

Going forward, Oracle will publish a list of roughly 2000 global accounts that the company will target directly – though partners are free to target those customers as well. Oracle will be “emphatic” in its efforts to focus partners on implementation services.

“HP and IBM are all about services,” said Althoff. “But our services headcount is relatively flat because that’s our partner opportunity.”

Partners drive 40 percent of Oracle’s annual revenues and roughly 80 percent of sales transactions. Althoff expects those figures to rise a bit as Oracle software VARs increasingly sell Oracle hardware.

“FY11 [fiscal year 2011] was a solid, great year for us while we were battling every set of odds we could have taken on,” said Althoff while describing the difficult task of acquiring and integrating Sun’s business into Oracle. “We’re done playing defense. We’re going to play some offense. We’ve got an incentive program. And we’ve got the highest performance environment anyone can certify to right now. Even SAP has to certify to Exastack because it’s the best.”

Hmm... The VAR Guy will be watching to see if Oracle channel partners agree.

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