Oracle Partner Program: Heavy Lifting Is Done, Fine-tuning to Come

Most of Silicon Valley is focused on the Oracle Java vs. Google Android lawsuit. But inside Oracle’s headquarters in Redwood Shores, Calif., it’s business as usual for the Oracle (NASDAQ: ORCL) channel team. Group VP Lydia Smyers (pictured) is gearing up for an annual partner kick-off initiative. Andy Bailey, senior VP of strategic alliances, continues to engage systems integrators. And even Oracle President Mark Hurd has channel partners on his mind these days, while Channel Chief Judson Althoff continues to tour the world. Here’s the update — reported from inside the walls of Oracle.

First stop: Lydia Smyers, group VP for worldwide alliances, channel programs and communications at Oracle. Smyers is among the key people planning Oracle’s annual kick-off event for channel partners. The fiscal 2012 kick-off, which occurred in June 2011, involved heavily lifting and a major push toward Oracle PartnerNetwork (OPN) Specializations for VARs, MSPs and ISVs. In stark contrast, it sounds like the fiscal 2013 kick-off, expected in June 2012, will involve fine-tuning the OPN effort rather than dramatic changes.

The Current Fiscal Year In Review

To understand where Oracle is going, it’s important to rewind to the fiscal 2012 kick-off in June 2011. At the time, Althoff, Smyers and the Oracle channel team focused on four key partner priorities:

• Ensuring Oracle had a product value proposition that partners understood.
• Ensuring an efficient operational model was in place.
• Ensuring a defined target market was clearly communicated.
• Ensuring there was an economic incentive and the proper infrastructure in place for partners to make money.

So what did Oracle do to meet those goals and objectives? Smyers offered a few examples:

• Oracle developed “stronger roadmaps” for former Sun partners. Also, Oracle clearly articulated that it was going to sell direct to Global 2000 accounts. “We don’t need the channel selling into those accounts,” said Smyers. “We were black and white about it.”
• Oracle moved hardware ordering online. Now, over 80 percent of orders are fulfilled electronically, a significant milestone considering Oracle’s products are not commodity consumer offerings.
• An incentive program rewarded partners that registered deals with support attached to the engagement.
• Smyers says accepted deal registrations are now up 60 percent.

What Are Partners Selling?

Leading up to the 2013 partner kick-off, Oracle is seeing strong partner demand for the Oracle Database Appliance (ODA), says Smyers. ODA, introduced in September 2011, is an x86-based server that runs Oracle Linux and Oracle’s database, scales to 24 cores, and supports up to 12 terabytes of storage.

Customers license Oracle’s software based on the number of ODA cores they use, so it’s a cost-effective platform upon which to consolidate Microsoft SQL Server customers onto Oracle’s databae, Smyers said. During a separate briefing at Oracle’s headquarters, several Oracle executives said 91 percent of ODA sales involve channel partners and distributors like Arrow ECS and Avnet Technology Solutions.

Oracle and Systems Integrators

Next stop: Andy Bailey, senior VP of strategic alliances at Oracle. Like Smyers, Bailey suggests that Oracle’s journey with partners is “the same journey we’ve been on for quite some time now; our partner strategy is aligned with our corporate strategy and we’re feeling great.”

Bailey focuses on Oracle Diamond Partners and strategic systems integrators that add value to Oracle’s software platforms and engineered systems. Names like Accenture, Deloitte, Cap Gemini and IBM come to mind. Even as Oracle competes with IBM’s database team, Big Blue also has about 10,000 to 12,000 people who “wake up every day and think about selling and support Oracle solutions,” notes Bailey.

Oracle’s Diamond partners typically have repeatable offerings built atop Oracle’s software. Plus, Oracle and the Diamond partners typically engage jointly during customer sales cycles to demonstrate and promote the integrated solution.

“In the partners I’m responsible for, we want more mind share; we want to become even more important,” said Bailey. ” If those partners are successful around Oracle that means we’re selling more product. My discussions really don’t involve a channel program for the big SIs. It’s more a collaborative conversation. We’re seeing the Diamond partners put more of the Oracle stack together using our engineered systems proposition.”

A prime example: The Accenture Foundation Platform for Oracle (AFPO), a pre-built, tested reference platform for Oracle’s Fusion Middleware 11g product suite, notes Bailey. Accenture claims AFPO can cut customers’ development times and costs by 30 percent.

Moreover, Diamond partners are typically multi-pillar specialists across multiple Oracle offerings (apps, middleware, database and/or systems).

While Oracle continues to grow its direct sales team focused on Global 2000 accounts, the company is quick to note that none of its 90-plus acquisitions have involved IT services companies. “On the whole, our partners are growing their businesses and they are secure in our actions,” said Bailey. “We stated to the market that Oracle consulting is decreasing as a percentage of our revenues. That’s reassuring to systems integrators.”

Final Stop: Oracle President Mark Hurd

Hurd addressed The VAR Guy and several dozen industry pundits during the Oracle Industry Analyst World conference on April 18.

Hurd covered a range of topics: Everything from engineered systems to Oracle’s $5 billion in R&D. Asked about the Oracle channel partner strategy, Hurd expressed enthusiasm for the “right” partners — particularly value-added distributors that have application expertise in vertical markets.

In this video from the briefing, Hurd explains why Oracle needs the right types of partners in vertical markets such as health care and financial services — rather than commodity partners that simply resell product:

The Bottom Line on Oracle

Overall, it sounds like Oracle’s channel partner program is in good shape heading into the Fiscal 2013 partner kick-off (June 2012).

The VAR Guy still wonders if Oracle can truly grow the Sun hardware business. And our resident blogger also wonders if Oracle Linux and Oracle VM can pay dividends.

Some skeptics think there’s no saving the Sun hardware business over the long haul. But engineered systems, Oracle insists, will ultimately address that challenge.