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Oracle-Sun Microsystems deal delays take toll

Barbara Darrow, Senior News Director

The longer this Oracle-Sun Microsystems deal stretches out, the worse it is for Sun partners.

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Many of these VARs see the situation as an ordeal that offers no best option. They were not crazy about the prospect of Oracle ownership, having survived rocky relationships with the database kingpin in the past. But even some of those partners preferred Oracle ownership to a buyout by IBM, which they thought would endanger Sun's Solaris and Sparc legacies.

Now that the European Commission has expressed its view that Oracle ownership of MySQL is not good for database competition, the partners fear an even longer, drawn out dispute during which loyal Sun customers may opt for alternative hardware providers.

Few doubt that the deal will get done, citing a "What Larry wants, Larry gets" philosophy. Oracle CEO Larry Ellison's acquisitive nature, after all, brought PeopleSoft, Siebel Systems and BEA Systems into the fold over the past few years.

The question is timing. The EC has until mid-January to vote yea or nay on the buyout. If it says no, there's an appeal process. By that time Sun will have been in limbo nearly a year. (IBM launched a buyout offer in early April 2009, and Oracle swooped in a few weeks later.)

Sun VARS: Not enamored of Oracle but still want deal done

That delay has hurt Sun and its partners badly. "It would certainly be better to be finished than not. The longer this drags out the more Sun hurts," said John Murphy, executive vice president of Denver-based Advanced Systems Group. "Many of our Sun customers have delayed purchases. It's not that they're flocking to IBM or HP -- some have but not many. But at some point they can't wait any longer to upgrade and that's a problem."

Sun fields a cadre of select hardware partners that have done well selling what they say is higher-value, higher-margin hardware than Sun competitors. They want the deal to be done and then hope that Oracle will see their value and not launch into a direct-selling attack on their business. Oracle has an aggressive direct sales force and a reputation for tolerating -- perhaps even fostering -- channel conflict

These partners tend to have strategic relationships high in the customers' organization.

"We are deeply involved with the customer in their data center. We've been the steady force, even more than Sun Direct out there for the last five to ten years. In that time, Sun has had maybe seven reps in that account. Hopefully, Oracle will see that as a reason to nurture this channel versus competing with it," Murphy added.

"The wild card is that Sun is trying to say to Oracle, 'We've got a great channel and you need to carry it forward. Oracle is saying the right things but has a history that is disconcerting," said Mike Shook, director at Consonus Technologies Inc., a Sun VAR based in Cary, N.C.

It doesn't help that a number of well-known Sun execs have left the company either as part of layoffs or on their own. Tom Wagner, former vice president of Sun's vice president of North American sales, is now at Agilysys, for example.

Randy Seidl, a Sun sales exec that many Sun partners respected, now heads HP's North American sales for storage, servers and networking. One Boston area Sun VAR said Seidl had been instrumental in protecting channel roles in even the biggest Sun accounts. He hopes Seidl will do the same at HP.

Sun's field sales and channel teams have been decimated in many regions and that has hurt sales, according to both Sun partners and customers.

Said the CTO of a large Chicago Sun shop: "Our entire Sun account team has been laid off or quit over the past six months and have all resurfaced at various resellers and integrators."

The Boston area partner said his company did more HP business in the past year and expects that trend to accelerate. "I'm both a Sun and an HP partner but more business is going to be HP simply because Oracle is not a good partner. Oracle is fundamentally un-channel-friendly. The fact that Safra [Catz] and Larry [Ellison] don't go to channel events is all I need to know."

Shook said a combined Oracle-Sun makes a compelling pitch into data centers and that in the past year it's been

Sun partners that have been maintaining those key relationships as the Sun field fell into disarray. "I think this deal will come to fruition. It's unfortunate it's not sooner, but Sun has 60,000 customers and Oracle has 350,000 -- Ellison will package up solution sets on Sun hardware and that's a compelling sale," Shook said.


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