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Oracle OpenWorld highlights perks and perils for technology partners

Oracle OpenWorld showcased the good, the bad and the ugly of Oracle technology partner relationships.

SAN FRANCISCO -- The news out of Oracle OpenWorld -- new North American channel leadership, partner enablement tools and a customer support portal -- highlights the good, the bad and the ugly nature of being an Oracle technology partner.

Many longtime Oracle technology partners and value-added resellers (VARs) were happy to see that company veteran Ted Bereswill has taken on North America channel leadership, finally replacing Rauline Ochs, who departed late last year. Bereswill was definitely on the direct sales side of the database giant, but he knows and has worked with partners for years, several Oracle solution providers said at the show. John Tyler, group vice president of technology alliances and channels, and Tyler Prince, group vice president of applications alliances and channels, report to Bereswill.

At a panel discussion during the Oracle OpenWorld partner day kickoff, Bereswill brought on senior managers for Oracle's applications, commercial accounts, public sector, emerging technology and technology groups, and all of them made very partner-friendly noises -- which was a no-brainer given the audience.

Still, Mick Gallagher, managing director of LS Technologies, was impressed. "Those guys up there are the guys who run things," he noted.

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Among the highlights: 40% of Oracle's worldwide license revenue and, perhaps more importantly, 80% of its transactions involve partners. The 40% share has been static for some time, but given Oracle's growth in the past few years, that's 40% of a much bigger number. In North America, 49% of revenue goes via technology partners.

Quite simply, Oracle is a much bigger company with much more business than it had five years ago, by virtue of 50 acquisitions worth $34 billion in that time span. That buying spree has taken it from about 1,000 products to 10 times that many. And revenue has doubled from about $10 billion to $20 billion a year.

In that time, the direct sales force has also grown from about 8,000 to 17,000.

OpenWorld news: Good and bad for technology partners

Oracle's message to partners is that it cannot possibly handle all those sales, all those transactions, and needs partners to do so. At the same time, there are no plans to change compensation plans for Oracle direct sales people. That means many inside sales reps still see partner involvement as cutting into their own margins, and that means conflict.

Speaking with, Bereswill acknowledged that fact but also noted that "smart" Oracle reps know that they will do better serving customers and make more money in the long run by working with partners to expand sales rather than viewing a partner-involved sale as a 15% penalty to their own margin.

And Oracle's channel team is clearly trying to steer reseller partners into the company's "edge" products -- newer technologies that don't have as many salespeople behind them. They include business intelligence, the G-Log transportation management products, Demantra demand planning software and Agile product lifecycle management wares.

"From a market standpoint, it's a lot less crowded in that pillar. There are already a lot of partners and reps selling databases. I'd tell partners to look at these new things," Bereswill said.

Oracle's channel team is also touting cross-fertilization with BEA Systems partners. Oracle's buyout of BEA was completed in April.

In another high note Mike Cochran, vice president of North American emerging technology sales, said partners are critical to attacking smaller accounts. In fact, all sales of Oracle "technology" products (that means database and middleware) into companies with less than $50 million a year in revenue, will go through partners. "We're depending on partners to do this. We've taken our feet off the street," he said.

Oracle tightens direct customer support links

Still more news out of the show showcased potential tension between the vendor and its partner base. Oracle president Charles Phillips and executive vice president Chuck Rozwat touted a new customer support portal on stage Monday that will tighten links between the vendor and customer.

My Oracle Support converges the company's existing MetaLink customer portal and its software configurator.

"People can load their configurations so we know what you're running and can then give personalized experience, recommend patches. The more we know about you, the more we can do for you," Phillips said.

But partners don't get a peek into that window even when it's their own customers involved. And that is something they would very much like to do.

Scott Barnett, COO of Bluenog, a Piscataway, N.J.-based BEA and Oracle partner, is all for the better flow of information between vendor and customer, but he wants to be a part of it.

"It does allow Oracle to get much tighter with the customer, and I'm in support of that. It's a good thing if Oracle knows what customers are running and can be proactive about recommending patches and upgrades … [so] they have more up-to-date info. But what I would suggest is, if we close a deal with Acme Corp., then Bluenog should also be able log into that same portal," Barnett said. "If Oracle could open up their portal to let the channel view things about their own customers, it would be great for Oracle, great for the customers and great for the partner."

In his view, many customers would not use the portal, but the hands-on partner could use it on their behalf. "I can say, 'Did you know there's a patch available for the software we sold you last year?'" he said.

Scott Jenkins, CEO of The EBS Group in Kansas City, agreed that shared portal access would boost customer experience, which is best for all parties.

"It would be nice to have the same access to customer info that Oracle will have. We like to be proactive with our customers on patches and rollups and upgrades," Jenkins said.

To be fair, this is not an Oracle-specific issue. Microsoft and all software companies are trying to tighten their direct ties to customers to ease support and also to sell more products into existing accounts. In that climate, account control is a hot-button issue between these vendors and their technology partners.

Another perennial issue in Oracle partner relationships is the feeling that partner love does not come from the top. Oracle CEO Larry Ellison rarely acknowledges partner participation in the company's success. He has long opposed a compensation-neutral sales model where direct sales people get paid the same whether a sale goes direct or through partners. Phillips, who joined the company six years ago, is seen as the main partner advocate at the top.

Judson Althoff, group vice president of worldwide alliances and channels, acknowledged Phillips' role Sunday morning before laying out new partner enablement tools and strategies.

"Without Charles' support it would be difficult for us to do all this for you," Althoff said.

Any student of Oracle will tell you Ellison has a history of grooming capable successors, then jettisoning them. That leaves some partners wary.

Another issue is how well Oracle can integrate thousands of new partners from acquired companies into its existing technology partner rubric. While the company has retained key talent from BEA Systems, and Phillips has said that BEA partners are critical to continued success, there is some worry that the influx of new partners will lead to contention with existing Oracle technology partners.

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