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Oracle undercuts Sun partners in their own accounts

Sun hardware VARs: Oracle direct sales is trying to take accounts direct.

It's started.

The Sun hardware sales team at Oracle is pitching discounted hardware deals to Sun resellers' customers.

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Several Sun hardware partners confirmed the news. Asked if he'd seen instances of Oracle reps trying to undercut him on deals in his own accounts, one Mid Western Sun partner said: "It's happened three times. Today."

Another Sun partner on the East Coast said it gets worse. "They're trying to hire our reps. They're out there telling our reps that this account will be going direct, so they'd better move."

Needless to say, this is not good channel relationship building and it comes at a time when both IBM and Hewlett-Packard Co. are trying to recruit Sun partners for their own channel corps. Several Sun partners have people meeting with IBM in San Antonio this week, getting the product roadmap and other details.

HP will host its big partner conference in Las Vegas next week and is also wooing Sun hardware partners.

The price cutting, which most Sun partners feared, has ramped up in recent weeks and comes as Oracle Corp. enters its fourth quarter and fiscal year end. Oracle's aggressive sales pushes in its fourth quarter are legendary.

The fact that Oracle direct sales would compete with partners for deals with cut-rate pricing wouldn't even raise an eyebrow among wizened Oracle software partners, but the Sun VARs have been hoping that Oracle would come around and see their value. That has not happened yet, they said.

"Forget about us. Customers don't like the way Oracle is handling this. They don't like the fact that things are changing without much notice. They don't like the idea of [direct] service and support being mandated. They don't like the heavy-handed tactics," said the East Coast partner.

Oracle scared most Sun partners to death in late January when CEO Larry Ellison and co-president Charles Phillips said Oracle would take the top 4,000 Sun enterprise customer accounts direct. There was some backpedaling after that, and Oracle rehired Tom Wagner to lead Sun's channel effort.

"That was a trusted relationship. We thought that would help. But it's clear that they were trying to placate us while doing all this other stuff," said the VAR.

Oracle could not be reached for comment.

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