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Opportunities and challenges for Oracle partners in North America

Oracle's North American channel chief, Tom LaRocca, discusses how the partner landscape has shifted in the past year, account mapping, cloud challenges and Exadata opportunities.

SAN FRANCISCO – Oracle's senior vice president of North America Alliances and Channels, Tom LaRocca, met with SearchITChannel at Oracle OpenWorld 2014, being held here this week, to talk about changes in the Oracle PartnerNetwork (OPN) landscape as well as the opportunities and challenges that lay ahead Oracle partners.

Has the landscape of North American Oracle partners changed much since this time last year?

LaRocca: In terms of the overall quantity of partners, the number has stayed around the same 4,000 partners as last year, but I'd say the quality of the partner has changed. You get partners that drop out of the partner program -- as happens in any vendor partner program -- and you get partners that come in. What we really focused on [are] … the partners that are core to our message and [the partners that] have the skill sets and capabilities.

We have partners with many different business models so, for example, there are partners that go from apps to disk, but I don't have a lot of partners like this. Instead, our partners are more likely to narrow their field. I have more partners that go database down through disk -- so they can talk the Oracle-on-Oracle story, they can sell everything from engineered systems to our storage, our server products, our database licenses and database options. That's probably the biggest chunk of our partners.

Then we have what I call our middleware, BI, Enterprise Performance Management (EPM) partners. That's really all of our tech software plus our BI and EPM solutions and Fusion middleware. I'd put these partners in a different camp from our other partners because they're very versatile. You have a partner like Keste, whose business model is so attractive to us. The Oracle field guys love this partner because they can sell our middleware, our Oracle-on-Oracle solutions extremely well. The field puts them in with a customer to close an account, to open a deal. … They have total confidence that these guys can do it. And a partner like Keste can do it from a systems integrator [SI] model, or they can do it from a resale model.

Now a lot of resale partners can't participate in an SI model because their financial structure won't let them. They've got to take title of the product because that's how their business model is structured. But when you get a partner like Keste that can live in both worlds, they become very important to us because we can put them in any spot we want and they're going to be successful.

Then we have partners with a systems integrator model that play high in the sales cycle. They're in on the strategic meetings with customers so we want to be very aligned with them, we want to know where they are and they want to know where we are and be aligned with us when we go into an account. These partners go from regional players to partners like Accenture.

We have some siloed partners who have specialized skills -- a BI practice, for example -- and the larger these partners are, the more we want to push them into developing competencies across all of our pillars to be more to the customer across our "red stack" play. This usually means an acquisition for them, especially if they know we'll use them more and [they'll] be better aligned with us.

In a previous conversation, you said that Oracle needed more partners that could sell the entire Oracle stack. Has that situation improved?

LaRocca: Yes. We've taken partners from being hardware-focused to the next step – database -- because if a partner is in there trying to sell an engineered system or storage, you've got to have a database conversation. So that's the next step for them. We manage and invest with a fair number of partners. That's what we want to help them with … moving up the stack with us or moving down the stack with us depending on where their legacy model comes from.

I'd say for every 10 partners we work with, we're making progress with five to seven of them. These are the partners that are interested in moving their business. We've had good success with about 60% of the partners we've focused on. The other 40% I wouldn't write off, but I would say they're moving slower than I'd like them to move.

I have a team of folks who work for me and all they do is look at our top partners, look at where they need help, where do we want them to morph to, and then we pick some to work with over a multi-quarter strategy. It usually takes two to six quarters for these partners to morph their businesses in a direction we all want to go.

Most important, they've got to commit that this is the right thing for them, then we're ready to work with them in terms of what they need in demos, specialized headcount, certifications and training. And we bring everything to bear with them. What we're trying to do is accelerate the process compared to if this partner went out and tried to do this on their own.

What is account mapping?

We've had good success with about 60% of the partners we've focused on. The other 40% I wouldn't write off, but I would say they're moving slower than I'd like them to move.
Tom LaRoccaSenior vice president of North America Alliances and Channels, Oracle

LaRocca: We took a long list of installed base accounts and we went to our direct tech guys and hardware guys in the field and we said, "What accounts don't you need our help in because you have resources, you're working deals and have bandwidth?" Then we identify the ones that they just can't cover and we need partners to cover. We then identify the partners who can tell the Oracle-on-Oracle message, and we divided the accounts among a number of partners. We did this in the western region.

The partner is responsible for growing the revenue, driving the message, the Oracle-on-Oracle strategy. If the partner needs us, we'll parachute in and have an Oracle badge to walk into the account with the partner to give credibility, to make sure the customer knows we're aligned, but we want the partner to be our sales force inside these accounts.

The field thinks this is great because they don't have to worry about partners showing up where they don't need them and instead showing up where they do need them, and partners can invest knowing they're in the right accounts. The results from just one quarter of this pilot have been excellent.

[In the western region] we had better growth in hardware and better growth in software than any other region and our pipeline grew faster. So we're going to roll this out across the rest of North America.

What are the top three opportunities for Oracle partners going forward?

LaRocca: Selling more Engineered Systems; we want to grow that. Engineered Systems are becoming a mainstream product now. We want to work with and continue to move partners to more of a cloud-type model, strategy and services so that they can carry the same message to customers that we carry. And, the last one is account strategies: mapping. I need to get that across North America.

What are your top three challenges in the partner community going forward?

LaRocca: I want to get partners aligned with us on the cloud. I want to make sure that they're moving quickly enough to keep account control in their installed base and that they're able to offer the right services and solutions. My challenge is also getting them to move faster on that and also getting more partners Exadata-competent. We're doing a pretty good job there, but the more Exadata goes mainstream, the more it goes down the pyramid, the more I need partners.

We need more partners with an Exadata competency, with an Oracle-on-Oracle-type competency. It's getting to the point where we're getting down to the SMB accounts, and it takes more feet on the street to do it. When partners do get into this, they find it's a lucrative sale. [In] an Exadata sale, the transaction is one thing, but there's a multi-quarter services revenue stream after the sale. Customers need workloads moved, they need data migrated. In some cases it can take eight quarters to get all of that done. That partner is in there with all of their billable hours of professional services and you take that and add it up along with the sale, and partners see it's a tremendous opportunity.

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Has Oracle account mapping been good or bad for your business?