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Talk about the margin opportunity selling Oracle hardware software engineered systems.
Number one the product itself brings so much value to the customer, we don't expect to see much discounting. We see protected street price due to the value of the product itself which is going to protect running margins. The material buy price is fixed for those guys so the higher value they can sell the product for then material margins will be strong.
The second thing is from a rebate perspective we have never offered more. So those two things in concert make us very competitive on our side.
Talk about some of the partner numbers.
We have publically disclosed we are north of $6.5 billion for FY 2011 in terms of our total channel. Where we expect to be is north of $7 billion (this fiscal year). We expect the channel to grow faster than our rate of business. So I think we are projected to grow at 15 percent this year. We are going to grow the channel faster than that. And it has been for the last several quarters growing faster than the rest of our business. So it is exciting times.
About 40 percent of Oracle's total sales are through the channel. When will you go over 50 percent for channel sales?
It is hard to tell. Because of the fact that our direct business is actually also growing at a very reasonable rate. I don't know that you are going to see a massive shift.
We are not as concerned about the total blended percentage. What we are concerned about is growing that broad market where we have the channel focused at a much, much higher rate than the rest of the business.
Are you going to provide the communications and marketing air cover for the Database Appliance that Oracle is known for?
What is your message to Oracle partners skeptical about the company's commitment to the Database Appliance?
It is the number one focus of the channel community we have. It is the absolute number one focus. And it is a huge part of our overall database marketing campaign. So if you look at marketing dollars that we put into database as well as what we are putting in for server growth that combined budget from the marketing perspective is going to be there to place this into the market.
We will get very, very aggressive in pushing this product out into the marketplace.That is why you saw (Oracle President) Mark (Hurd) endorse the launch. The channel was like- how many units do you guys expect us to sell? The answer is orders of magnitude more than Exadata. Orders of magnitude.