Oracle Weighs 'Channel-Friendlier' Model

The company's top execs, including executive vice president Keith Block, endorsed plans to ease conflict between the company's aggressive direct sales team and resellers, sources said. Block heads up North American sales for the Redwood Shores, Calif. database kingpin.

According to attendees, Oracle top dogs said the company needs to mend fences with partners who sell the company's database and applications. But details on execution were in short supply. There is consensus among Oracle leadership that reseller partners are key to the company's push into the mid market from its enterprise stronghold, sources said.

Oracle President Chuck Phillips and Chairman Jeff Henley were at the event, although CEO Larry Ellison was not. The sales meeting kicked off the same week that the U.S. Department of Justice launched its case against Oracle's PeopleSoft buyout in San Francisco.

The rap on Oracle in the past is that even when partners register new sales opportunities in the company's Global Opportunity Registration System (GCORS), internal Oracle sales people sometimes find a way to claim the sale. In some cases, the opportunity may be a sale into a new department or division of corporation that already uses Oracle. The sales reps use that as a leverage to claim the opportunity as an existing lead, several partners said. One mid-Atlantic partner, echoed the sentiments of many resellers contacted by CRN when he said he stopped using GCORS due to "trust issues."

Oracle sources say that should that happen in the future, there will be "real consequences," for the offending rep and sales management. But again, details were not offered.

Oracle channel chief Rauline Ochs, has pledged to rectify issues with GCORS but has sidestepped questions on another big issue raised by Oracle resellers. They maintain that until the company goes to a "compensation neutral" model, in which partners can offer Oracle products at close to the discount Oracle's own field sales can, channel conflicts will continue.

Word filtering out of the sales conference indicates that Oracle may be closing in on what would be pretty close to a compensation-neutral program.

Partners would be pleased if Oracle would improve and bolster GCORS to protect their accounts and adopt a comp-neutral model. However, several told CRN that proof will be in the pudding. They say Oracle has preached partner-friendliness in the past only to fail to follow through. (See related story.

Oracle also fields a multi-faceted sales organization ranging from telesales to local reps to global account coverage. "I'd need to see how any new rules work with all those variables," said the mid-Atlantic partner.

After years of sometimes bloody conflict, one east coast partner said of the proposed changes: "I'll believe them when I see them."

Another was "cautiously optimistic."

Through a spokesman, Ochs, Oracle's group vice president of North American Channels and Alliances, would only say that "there's a process underway and we're starting to roll that forward. We feel good about it but cannot go into details."

Many Oracle partners have lauded Ochs' efforts, but some doubt whether Ellison really backs a channel-friendly model. One midwestern partner said if Oracle devoted a fraction of the money it spends on recruiting and training its own sales reps to channel partners, it could grow its market share and win new accounts even against increasingly able databases from Microsoft and IBM.

As Microsoft and IBM bolstered their respective SQL Server and DB2 databases, Oracle has been fighting to retain its database lead while also trying to entrench its e-business applications, mail, and application servers against market leaders in those categories.

One long-time west coast solution provider who concentrates on Oracle said that with the latest releases of SQL Server and DB2, the feature-function gap between Oracle and the number two and three databases is nearly negligible. The mid-western reseller disagreed, saying Oracle 10g retains superiority over the competition but that the company needs credibility in other sectors.

"The only thing the market consistently recognizes [Oracle] for is the database. If they cannot get recognition for the application server components and applications, they're dead," he said.

Oracle's serious need to penetrate small- and medium-sized businesses, where SQL Server has excelled, makes the company dependent on an army of solution provider, as well as ISV, partners, observers said.