Hard Work Pays Off With Victory

Oracle rarely comes to mind when one thinks about channel-friendly vendors. The software titan has the longstanding reputation of being an aggressive direct-sales business burdened with channel-conflict issues. This is a company that, until recently, didn't allow its partners to resell the full breadth of its products, such as its business-applications suite. Boy, times have changed--or at least they are changing.

In the inaugural year of the Business Software category in the 2005 VARBusiness Annual Report Card (ARC), Oracle landed on top, ahead of Microsoft and Business Objects. Oracle was ranked No. 1 by partners that resell the Oracle Ebusiness Suite Special Edition and the applications acquired from PeopleSoft and JD Edwards.

This remarkable turnabout--partners ranked Oracle first in nine out of 11 Support and Partnership criteria--is most likely a testament to the work of Rauline Ochs, Oracle's group vice president for North American channels. Ochs, a veteran channel executive whose resume includes stints at IBM and BEA, has been overhauling the way Oracle interacts with its partners by creating new programs, channel-friendly products and other resources.

Trying to polish Oracle's reputation with the channel, Ochs has implemented such things as "rules of engagement" for the company's direct-sales team to help guide them on working with partners. She also has established partner-only territories for selling the company's midmarket-focused ERP applications. The partner base has grown from 2,800 in North America to 3,300 during her two-year tenure.

"Our partners are telling us we're doing the right things," Ochs says. Her next goal is to begin cross-pollinating partners who sell the database and application server products with those who sell the business applications.

The business-software market--ERP, CRM, human resources and other applications--is highly competitive but consolidated around a few major vendors. All are trying to use partners to sell into the midmarket. That's the point of Oracle's Ebusiness Suite Special Edition, which is a subset of the enterprise version of the suite and packaged for the channel to sell to midsize customers. Microsoft, with its stable of Dynamics software (think Great Plains, Navision, Axapta and Solomon), is also pushing partners to penetrate the midmarket space, while internally, Microsoft moves to unify these disparate applications into a shared code base with a common look and feel.

Keith Inouye, vice president of sales at Oracle partner Core Services, is impressed with Oracle's channel initiatives.

"They've shown solid support for partners in two ways: They've designed the program with input from us, and they've dedicated this Special Edition suite to us," he says.

If there's one not-so-bright spot for Oracle, it is Managing Channel Conflict--where it ranked last, underscoring how difficult it is to change a corporate sales culture.

Greg Carter, co-founder and vice president of Iteration2, left the former PeopleSoft a few years back to start a practice devoted to Microsoft's wares, including the Axapta and Microsoft CRM applications. He says he encounters no channel conflict, but one challenge is trying to convince customers that Microsoft is truly committed to the ERP business.

"Customers want to know, 'Does Microsoft really care about who we are?' Well, they do," Carter says.

Looking ahead, both Microsoft and Oracle have upgrades coming down the pike. Business Objects, which fared well in the ARC criteria for Product Innovation, took the wraps off a major new version of its Business Objects XI business-intelligence suite in September.

"There's a huge opportunity for our VARs to deliver training and education on this new platform, and do migrations," says Lance Walter, vice president of product marketing at Business Objects.

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