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Oracle hardware may be a hard sell

Sun partners see challenges ahead in selling and supporting Oracle hardware. And they're not sure Oracle will get the hardware supply chain.

SAN FRANCISCO -- Oracle is now a hardware company. But adjusting to that business won't be easy, said Oracle and Sun Microsystems partners at Oracle OpenWorld 2009.

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In the past few years, Oracle Corp. has successfully incorporated huge software companies -- including PeopleSoft, Siebel and BEA Systems -- into its business. The feeling in the channel is that things may not go so smoothly with the Sun Microsystems acquisition.

"If you want to download software and get a license, it's 20 minutes," said an executive with a large Oracle and Sun distributor who requested anonymity. "The hardware supply chain is significantly different. A large customer wants this thing on my dock on Wednesday, colored purple, and, 'I want 47 of them. Oh, and I don't want to pay for them till I deploy them.'

"Oracle doesn't understand that. Oracle understands that you download the database and pay for it. Oracle does not get what the supply chain does in adding value, especially for the large customers they typically take direct."

Oracle hardware appliances on the horizon

Despite the best efforts of IBM and Hewlett-Packard to convince companies otherwise, no one seems to think that Oracle will dump Sun's hardware. Java and Solaris aside, and in spite of Sun's own attempts to rebrand itself, Sun is a hardware-oriented company. Oracle CEO Larry Ellison's statements about preserving or even building on the SPARC franchise are of some comfort to Sun hardware partners.

Instead, most Oracle partners foresee the launch of several high-value, special-interest appliances for vertical industries. Oracle just launched the Intel-based Exadata box that will run on Sun hardware and be sold by both Sun and Oracle partners. Oracle president, Charles Phillips, mentioned last spring the possibility of vertical industry appliances, but there has been little subsequent discussion since.

When push comes to shove, there is worry that Oracle partners will add Sun hardware certifications to their mix and start competing with Sun partners, which could cause angst. Another potential problem for the channel: Oracle would likely preload software -- from operating systems and middleware to applications -- on these machines.

Will that steal integration business from partners?

"The commoditized part of the services, maybe," said one large Oracle outsourcing partner. "But that's going to go away anyway."

Chris Laswell, account manager at Laurus Technologies Inc., a Sun and Oracle partner based in Itasca, Ill., said he is not too worried about any appliance onslaught.

"Any account will need [additional] integration, say, adding [business intelligence or other modules], even if they get an Exadata," he said. "We can add value to appliances. There are many things you can do in software that you can't do in hardware."

Oracle hardware to fill gap against IBM

Nearly all of the dozen or so Sun partners interviewed in the past three weeks said they also sell other branded hardware, and many have added it in the last year. But, to a person, they all mentioned that the combination of Oracle and Sun will make it easier to sell against IBM. And that may be the real game plan.

If the Sun purchase is viewed through that prism, the Oracle and Sun distributor said, Oracle got a great deal for three reasons.

"One is IBM," the distributor said. "That's the company we all love to hate. Two, Oracle gets a ton of technology for the money. Three: Larry's ego."

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