SAN FRANCISCO -- From the time Oracle acquired Sun Microsystems three years ago, the company has been working hard to build integrated and optimized hardware and software systems, drumming home the message "Hardware and software, engineered to work together." Looking for broader market penetration in businesses outside of the most complex or large enterprises, Oracle needs channel partners who are up to the task of conveying the breadth and depth of the company's mantra.
In a Q&A with SearchITChannel at Oracle's PartnerNetwork Exchange here this week, North American Channel Chief Thomas LaRocca talked about Oracle's direction and the partners who do business with Oracle. LaRocca has been with Oracle for 18 months and has served as senior vice president of North American alliances and channels for the past three months. In his new position, he's responsible for Oracle's commercial and public sector channel revenue and for supporting the company's
Here's how Mark [Hurd, Oracle president] explains [the midmarket]: 'There are 5,000 banks out there, and we only cover 25 or 35 of those banks; who is going to cover the other 4,965 banks?'
senior vice president of North American alliances and channels, Oracle
Describe Oracle's partner landscape.
Thomas LaRocca: The majority of our partners are good at selling into the data center -- hardware, servers, storage, networking, interconnectivity. We also have a fair amount of partners selling Oracle solutions. Then there are the partners that are specialized in selling software, but they don't sell hardware. And in the middle you have a convergence -- and that's Oracle's strategy -- selling our software on top of our hardware.
That's the crux. We've engineered both to work together. Now we have a product like Exadata, which is a culmination of engineered software in a box with our hardware designed to work together to fit the customer's solution.
There are some partners that can sell Exadata. But for hardware guys who want to sell Exadata, we have to move them up the stack and train them how to lead with a software conversation that culminates in an Exadata solution. Then with the software guys, we're helping them move down the stack so when they're having the software conversation and it leads to Exadata, they can also have that conversation [about hardware], and they're confident that they can deliver that solution. This is where we think the market is going.
So we have to enable more partners to deliver the 'Oracle on top of Oracle' message and have the value conversation with customers. When partners can have those conversations, there's a whole new level of expertise they're bringing. If they can't have it, someone else is going to come in and have that conversation.
So let's sum it up: Who is an Oracle channel partner today, and what's your ideal Oracle channel partner?
LaRocca: Today, we have a lot of hardware partners that are good at delivering an infrastructure solution in the data center. I have a lot of partners that are great at selling middleware and applications. Partner nirvana for me is [a] partner [that] can go in and sell an application all the way down to the disk and sell everything in between; he can sell the entire 'red stack.'
I don't have enough partners that can do that. I need to take the partners that we've got and expand their competencies. So I'm trying to get partners trained to go up the stack and get partners trained to go down the stack. I also want more partners who can sell cloud solutions.
What is the market for your partners?
LaRocca: We have a set of very top customers that we're focused on from a direct sales standpoint -- we're in there wide and deep, where there's a lot of platforms running a lot of solution. Oracle Direct covers these accounts.
Once you get below that set of customers, there are still big customers, a ton of customers that we just don't have the capabilities to get to all those buying points. So that's where partners create a lot of value for us. They're an extension of the Oracle sales force.
We're training them; we're enabling them to make sure that they can deliver the right solutions to make sure that they can represent us in the fashion that the customer needs … to drive solutions into the midmarket, and even getting down to the smallest customers.
[The] midmarket is a big market. Here's how Mark [Hurd, Oracle president] explains that market: 'There are 5,000 banks out there, and we only cover 25 or 35 of those banks; who is going to cover the other 4,965 banks? I need partners who are going to cover those banks. There are 8,000 hospitals and I only touch 50; who is going to cover those hospitals?' I need partners engaged with those organizations.
These are just examples, and we can extend this thinking to other vertical industries.
Oracle is going to cover the very top level of those markets, and even inside those top accounts there are partners that deliver unique value that we go to market with, but we mostly have these covered. It's the ones below these top accounts that we just can't get to, and there are thousands of them, very large customers that we simply need partners to go after.
So what is Oracle doing to encourage its partners to make the investments with Oracle?
LaRocca: We have specific trainings for partners who want it. We'll train them, we'll go to them, we'll do webinars, we'll do face to face, we'll get them certified so that Oracle has confidence that they can deliver the right solution to the customer, to the customer's satisfaction.
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For some partners, it's about cash flow. We'll make an investment with them. We have an investment program; some call it MDF [market development funds], some call it demand generation. Basically, we're making targeted investments. We'll go in and say, 'This is how we can help you. This is where we think the value is, the solutions our customers are looking for. And we want to train you on these competencies. If this sounds interesting to you, then we're willing to help you.' But the partner has to make a commitment because this is not easy. The partner has to be willing to stick with us on going down this path, get the resources trained, engage them into their sales force, engage them into their accounts, have the conversations, and we'll get specialists in from our product groups when the partner needs them for any deal or conversation.
I've doubled the technical expertise on my staff in the last three months to do go out and do this. We're going to teach [the partners] how to fish so that after a doing this a few times, they do it for themselves.
How is this strategy working out?
LaRocca: The challenge is that the partner has to understand what the commitment is on their side -- and that's sticking with us. It's not easy to bring on another competency. It's not like we're going to teach the partner who sells notebooks to sell printers. We're going to bring a competency that adds a lot of value that solves a lot of problems at a customer site. We're going to make a lot of intellectual property available to that partner and teach them how to use it to drive and deliver a solution.
The farther up the stack that a partner wants to go, the more investment Oracle is willing to make with that partner, because they become more attractive to Oracle. And we know that for every layer the partner adds on, the closure rate goes up.