As of October, Oracle Corp. will take more of the Sun hardware renewal and support business direct.
While the computing giant will allow a handful of Sun VARs to continue to sell hardware renewals — a lucrative annuity for their businesses — it is ending the authorization for others as of October 15. It's unclear how many Sun partners will still be able to play in this business after that date. It is also unclear what the criteria are for making, or not making, the cut. Oracle would not comment for this story.
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Currently, a limited number of Sun hardware VARs are part of the Sun manager program. They sell and provide first-line support for Sun gear and make pretty good margins doing so. Another tier of partners resell Sun services that were provided by Sun itself.
A couple of Sun VARs said they had been contacted about the end of their deals. Others have heard nothing and so may have a reprieve, at least for now.
Oracle CEO Larry Ellison made it clear in a January call announcing completion of Oracle's $7.4 billion buyout of Sun Microsystems that Oracle would sell, service and support more Sun stuff direct. One Oracle partner pointed that out, adding that Sun VARs that were not prepared have no one but themselves to blame. Still, many hoped against hope that they would make the cut.
In truth, most of the biggest Sun hardware VARs have already been wooed by IBM and Hewlett-Packard and many have quietly started recommending competitive hardware to their Sun accounts because they don't see prospects of much future business in Sun hardware, whereas IBM and HP have targeted them—and their customers. "It's a matter of self preservation," said one East Coast Sun VAR.
Other Sun VARs that have not been hit with an October deadline are also bracing themselves.
One West Coast partner, who asked not to be identified, said the process of expediting Sun service renewal quotes from Oracle has gotten longer and more frustrating. "There routinely seems to be a lag of two weeks or more for even the simplest service renewal request," he said via email. Oracle says it is backlogged.
His theory is that there are two possible scenarios. "One, it could be that Oracle does not have a smooth process in place for Sun service renewal quotes for orders and so this is truly creating a delay and they are honestly backlogged. Two, Oracle is not all that compelled to help resellers sell Sun service renewal orders so they have devoted fewer resources than necessary to handle the amount of business in this area. It seems Oracle wants to move to a direct sales approach for renewals and so are making it very frustrating for resellers and customers to go through the reseller channel."
His best guess is that both scenarios are at play but that the second scenario is the bigger factor.