A round of applause for Larry Ellison, please, and a note of warning to IBM, HP, Cisco and all the other titans that never expected to have to compete with Oracle at the level they will be in the coming years.
Less than a year after wrestling Sun away from IBM, Oracle announced during its most recent earnings call that it has turned the business profitable. The Oracle product set with Sun is obviously wider and, more importantly, gives it options it didn't have before.
In addition, Ellison very smartly swooped in and quickly brought former HP CEO Mark Hurd on board just a few weeks after his ouster. And a number of solution providers who wouldn't have considered becoming an Oracle/Sun partner in the past have suddenly expressed interest in the line.
Ellison is signaling a desire to push sales of the hardware line now that the cost-cutting is done and the business is adding to the bottom line. The only question I have around this is, will he use the sharpest arrows in his quiver -- the channel and Hurd?
Hurd stayed the course with partners while at HP and brought a level of consistency in his message. He certainly wanted partners to be more loyal and increase their attach rates of HP products, but there never was a sign that the channel wasn't important, or wouldn't be in the future. Stability breeds growth while uncertainty drives caution.
Hurd understands this, and it's one of the key reasons HP got the growth from partners it did under his reign. But can Ellison commit?
It's a real question mark.
Ellison has not exactly been a channel champion, having built a notoriously aggressive direct sales force that has driven the company for many years. But hardware and company size is necessitating a different look at how to go to market. Michael Dell realized this some time ago and has since driven hard into the channel.
Is Ellison finally coming around and beginning to see the value and potential? It's hard to tell if you ask me. Get in front of some Oracle insiders and they will tell you that Ellison is definitely changing his tune and seeing increasing value in indirect sales. Others say the company is still so focused on direct that the dollars are not being freed up to do what needs to be done.
Can Hurd change this? Is that even what Ellison is looking to Hurd for?
Only time will tell, but there is certainly no one better equipped inside of Oracle right now to drive the right changes to build out a solid partner base that can take Oracle into sales opportunities it does not see today.
I don't think we are going to have to wait very long for this to play out. Ellison is certainly not shy or afraid to make decisions. He obviously trusts Hurd, but nonetheless is going to ask lots of questions and debate any concerted effort here.
Hurd needs some time to get his arms around the Oracle business and understand it enough to decide on what he thinks he should push on with Ellison. My bet is all this takes place this fall, and by very early next year, Oracle will either be signaling a stronger entrance into the channel or more of the same.
I'm betting, however, that this is a company that is poised -- and desiring -- to be a much bigger player across the entire market as we move toward cloud computing. That's going to mean having a larger sales footprint across the globe, and the only way to do that quickly and profitably is to build a bigger indirect play.
In the end, Oracle is a sales-driven company and Ellison, a fierce competitor, is now flanked by someone in Hurd who can help him make even better decisions more quickly. I'm betting this is going to get real interesting and will benefit solution providers.