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Oracle to play partner favorites in pillar technologies

Oracle plans to pick go-to partners for content management, identity management and other tech pillars and to erase the $1 billion line separating direct from partner sales.

As Oracle prepares for its annual sales kickoff, the software giant is tweaking its partner program again, this time with plans to differentiate its highest value-add partners and to designate go-to partners for select technologies, several sources said.

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Specifically, it plans to identify 75 partners nationwide that will have specific credentials in "pillar" platform technologies including Stellent's content management, security and identity management. Sources expect it will take several quarters for Oracle to identify and train all of the partners.

Nuking the $1 billion line of demarcation

On the technology side -- technology refers to Oracle's database and middleware as opposed to applications -- the company will erase a long-running line separating partner and direct sales. Before now, technology sales into companies with less than $1 billion in annual revenue and that were not already Oracle prospects, were earmarked for partners. Oracle is now erasing that limit with partners fully able to sell into bigger companies.
While that may sound impressive, several partners said in reality it is not a big deal.

"Theoretically, companies with under $1 billion were designed for partners …. But we could sell into bigger companies, but without protection of [Oracle's] deal registration program," said one long-time Oracle technology partner. "Most partners didn't care about that anyway because the deal reg system is very kludgy and most partners viewed it as a mechanism for tipping Oracle direct sales off on new deals so they didn't use it anyway."

He and other VARs also said the deal registration system, which is supposed to protect partner-led deals, can't prevent customers from shopping for better deals after the VAR scoped out the implementation and provided a price quote.

That scenario has sparked howls from Oracle VARs over the years who say they lose deals they've spent months building to last-minute under-priced bids from CDW and Dell. Those two big Oracle partners often give away the software in order to win the hardware deal. Other Oracle partners do not have that luxury.

Pick of the litter Oracle VARs for ECM, identity, security

Some other partners were very interested in the idea of go-to partners in new technology areas which, they said, can carry higher margins than the bread-and-butter database business.

One of these partners said Oracle plans to focus on select areas of operational efficiency, including process optimization, Enterprise 2.0, and business intelligence.

The idea here is to build demand and channel for potentially higher-margin license sales and services businesses built on foundational technologies Oracle has acquired in the last few years. In that time it's bought Stellent for content management and Agile Software for product lifecycle management.

On tiering partners, Oracle appears to be ripping a page out of Novell Inc.'s playbook. Novell pioneered the stratified partner model with highest-value service-oriented partners at the Platinum level, followed by Gold and Silver partners.

Currently, the Oracle Partner Network (OPN) includes Partner, Certified Partner and Certified Advantage Partner levels, but the meaning of those designations is not very clear to many of the partners themselves.

The highest level Platinum partner will have to invest more in that designation -- the big question is how much more an investment a current high-level partner company will have to make than it is now. In theory, that investment would be more than offset by fatter margins coming in.

Another partner said the devil, as always, is in the details. "Higher-level partners will pay more to Oracle. In theory, that's not a big deal, because you'll then turn around and have more business and better margins. So the additional fee is a moot point. But that's only if the program works," he said.

"What happens if we jump through all these hoops, pay this money, and the sales aren't there? Bottom line: We have a very short fuse with Oracle, based on past experience."

Said the West Coast partner: "Is this a real revenue generator for the partners, or is this just a way for Oracle to generate more revenue by taking more money from the partners?"

Partners are typically informed of upcoming changes at the sales kickoff event in two weeks. In a nod to the recession, the event, usually held in Las Vegas, will be virtual this year, Oracle sources said.

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