New Oracle Channel Head Says Partners Can Work Cooperatively With Direct Sales

Dennis takes over as channels chief at a time when the company has realigned its partner-management efforts. Recognizing that responsibility and oversight of partners was too fractured, the company has grouped all partner efforts under its Oracle Partner Network initiative. That should, at the very least, improve the way the company coordinates and communicates with partners in the field.

From a strategic level, Dennis has his team working to cultivate ties to new partners, ISVs in particular. Meanwhile, he's looking at some tactical changes to Oracle's program that could create broader market opportunities for Oracle partners.

In a recent interview with VARBusiness senior executive editor T.C. Doyle, Dennis outlined what is different about yet another attempt to bolster Oracle's partner efforts. Although he proved himself as head of North America Consulting Strategic Initiatives at Oracle, he faces an altogether different challenge this time. We're willing to bet that at no time in his career will those courses in group dynamics he took at the National Training Laboratories in Bethel, Maine, come in so handy.

VARBusiness: Your first thoughts when this position opened up: run like hell or embrace it with open arms?

Dennis: When I was first offered the job, [Keith Block, Oracle executive vice president of North America] offered it to me a little bit tongue and cheek. The issue we faced was that Oracle -- specifically Oracle channels in North America -- was fragmented across a lot of organizations. So, there were a lot of channel teams that were associated with general business, there were channel teams associated with major [accounts], channel teams associated with consulting, channel teams associated with what we call OPI or the manufacturing strategic accounts, and channel teams associated with thin services and the service accounts. If you were a partner or Oracle, it was predictable that [your experience] was going to be fragmented, not necessarily congruent and certainly you could get one message out of consulting trying to embrace you and another message out of a general-business sales force that was picking somebody else as their preferred partner.

VB: So where do you start?

Dennis: So, the challenge to start with had to do with alignment. It had to do with organizing in an efficient way so that we could cover the marketplace with a single organization. That was a heck of a task, but I feel pretty good about it.

VB: Where are you in that process? Have you made the necessary, underlying structural changes to get things to where you want them?

Dennis: We're done. We have two constituents that we face off with, one of them is the Oracle direct-sales force, the other is the partner community. From a channels point of view, we want to make sure the channel team is fully baked into the opportunities that the licensed sales reps are finding, and can act as the conduit for the partner economy around what's going on with any given transaction.... The way we organized was we set up organizations that were perfectly aligned to the direct-sales force. We created channel-manager roles that aligned perfectly with the regional sales managers, and that was how we handled sales alignment. We interpret those guys as catchers of programs. And then we set up organizations that aligned to each of the partner types, including ISVs, VARs and VADs, OEMs, MSPs, etc. Those guys were pitchers that tossed programs to the channel managers. And we had some great results. In the last half of the year, to give you an idea, we reinvigorated our ISV program. We ended up signing over 230 new ISVs, and we have about 70 migrating to our technology stack, exclusively. That's all good stuff. From an SI point of view, our influence revenue grew in the fourth quarter by a number approaching 50 percent. And the stuff we got out of the VARs and VADs, much to our surprise, in quarter four, was roughly double what we did in quarter three. All and all, we felt pretty good.

VB: Not bad. Question: Over the years, I have interviewed several fellows in your role, vice presidents who are coming to head channels and reorganize and put some meat there. How is this any different?

Dennis: The lucky thing is that from an organizational point of view, not only did we consolidate channels into a single organization in North America, but we also put it on an equal playing field. I'm a direct report to Keith Block, for example. The idea that channels don't have a place at the table has really changed. That's significant. We are really baked into all of the strategies, whether it's in the tech business, the apps business, etc. [It's] an opportunity at a senior level of making sure that channels are part of the strategies. That may be some part of what's different. The other part that's different is that there have been several people who have held the position who have been good people. Ken Muse, Jack Lee and those guys were really top-notch players. And they continue to have some pretty significant roles inside the new organization. So, we think it's a blend of some people who have been around channels, and some new thinking.

VB: How long have you been with the organization?

Dennis: Forever. I joined in 1989. In Oracle years, that's older than dirt.

VB: When the job first came up, what was your initial thought?

Dennis: My initial thought was I was genuinely excited because I had worked in consulting and channels. The idea [that] a single message from a single organization representing all of North America would resolve a lot of practical problems in the way we worked with partners and positioned ourselves with partners [was appealing.]. So, genuine enthusiasm was what I had when Keith [Block] made the offer.

VB: The contribution that partners today represent to Oracle: Can you put that into some perspective, please?

Dennis: I guess there are two numbers we kick around. We would be remiss if we didn't talk about the segmentation of our business between [applications and technology]. That's a profound change that will change way we work in channels and, probably, as well as our success in channels. In the tech space, I'd say about one-third of our business is touched by partners, with the lion's share of that, or a good portion, aligned to VARs, VADs and ISVs. On the application side, about 60 percent of our business is done with partner influence. So to Oracle, channels are hugely important. As we go into next year, they will be even more important as we try to make the sales force more productive, and, perhaps, expect more out of channels in the SMB space.

VB: Let's segue to your previous point about the differentiation between the tech and the app space.

Dennis: The point I wanted to make was specifically around tech. If in FY '05 somebody is looking back as FY '04, [they'll likely see this as the] inflection point of the year. The sales organization has had all sorts of permutations. We will go into FY '04 aligned by business. So there's a tech business, an apps business, and also a grouping of the direct-sales [force] around strategic accounts. But having segmented the business around tech and apps, one of our principal ways of influencing the tech business unit is to make sure those folks have solutions to sell that run on top of our technology stack. So not that long ago -- say five years ago -- there used to be a document that people would circulate among the tech reps. It was the business-alliance program book -- we called it the "black book," because it was black. In it were about 4,000 ISVs. They were really segmented more horizontally than by industry at the time. But, nonetheless, they gave the tech rep an opportunity [to play a strategic role] when he was talking to a customer. A customer would articulate some sort of a problem, the rep could go to the book and look up the ISVs that had offerings that were relevant to the problem and come back to the customer and talk about the solutions offering or offerings that might fit the bill [and] that run on top of our technology.

In the old days, that did a bunch of things. It validated that you could run serious business applications on relational technology. It also created the market for modern ISVs. We drifted away from that enabling of the tech-sales force over time. We're going to reinstitute that for FY '04. So the idea of an ISV-solution catalog with our tech reps, representing solutions offerings that promote the partner community is a cornerstone of the tech strategy, and we're pretty excited about it. That ties back to the business about signing up a couple hundred new ISVs over the course of the last six months. We really will hit the ground running in FY '04. The other part of it is that because the organization itself was so fragmented between market differentiators,including [general business], majors, OPI, [Oracle Service Industries] in the past,in the future our campaigns and promotions, even those that emanate from corporate, will have consistent themes across North America, [and] through all of the market space, through all of the sales channels, including our direct-sales force, our telesales organization and channels. So you're going to hear things about collaboration-suite campaigns, 9is and business-intelligence campaigns that will really resonate throughout the entire organization sort of leveraged with marketing.

VB: Any other structural changes that you need to make now that you've got things going the way you want them?

Dennis: I want to make sure we keep up with the sales force. I think the lesson I learned in FY '03 was that this business about alignment is really important. So aligning by partner type on one side and aligning by regional managers on the other is something we will keep current. We won't be static. We'll be as [consistent] as the sales force is in its organization.

VB: You're losing me in terms of the context of that. What do you mean by that?

Dennis: The relationship between the channel manager -- the person who understands the partners that are in play around a customer or transaction -- and the sales rep who is covering that transaction is really important. It's important that they really know and trust one another. From a sales rep's point of view, it's important [to] not get confused about who he or she should call to engage or sort out the partner relationship in a given opportunity. It's also important that when they make that call, it's with somebody they are familiar with and somebody they have worked with before. So, I'm going to keep the channel managers aligned with the people they are familiar working with.... Does that help?

VB: It does. Is that a big departure from the way it was done on the past?

Dennis: In the past, the sales rep could go to several people. That was pretty confusing. And sales reps are the kind of folks who like to work with people they know how to predict. Sometimes that caused the wrong behavior. We'd get people cross-channeled.

VB: What needs to be done in terms of partner recruitment? Do you have the right number of partners? Are you still looking for ISV partners? VARs in specific markets or with specific skills?

Dennis: I think the area [in which] we need to develop partner relationships more is ISVs and probably MSPs. The relationships we have with the integrators are pretty good. The coverage that we are getting out of VARs and VADs is really pretty good, although we would always love more VARs. There will be a theme next year around enablement. That has to do with making sure that the VARs in the field are able to in fact properly position and leverage the selling assets around them, whether it's the various waves of sales campaigns or assets that would make them more productive. So, I think the area of recruitment that we will focus on is ISVs and MSPs. It is a table stake in the industry that you have to have a tiered approach to channels. We will continue to run a tiered approach in North America, emphasizing -- maybe more next year -- the edge we have with Oracle Partner Network (OPN) because I think OPN is well received by the partner community from a low-touch point of view and it's a nifty way for us to promote and socialize ideas regarding our priorities and assets that a partner can use to sell Oracle.

VB: By aligning all of your partner and channel efforts, you have put everything into one bucket, much like what IBM has done and HP with its PartnerOne program. My question is, what is the overriding name for that program?

Dennis: That would be OPN, which is both a program and a portal, too. There are tiers inside of OPN that represent your level of influence and interest in Oracle. And [the tiers] really vary by partner type.

VB: Given that Oracle historically has had such a strong direct-sales force, can Oracle ever have as strong a partner program as in the industry as, say, an IBM or Microsoft that does a disproportionate amount of its business through the channel, or, because of the company's legacy, will you have to accept a certain amount of conflict that will always just be there?

Dennis: More the latter, but I wouldn't say "conflict." We live in a world that has a very strong direct-sales force. The purpose of the channel organization is to maximize license revenue to Oracle. So we have to figure out how to be the most effective channel organization with a robust direct-sales force. But the important part, that you hit the nail on the head [on], is that we are not going to be competitive with the direct-license sales force regarding the degree to which we influence Oracle license revenue. Rather, it's a complementary program with a direct-license sales force. We coexist with them. We are strong proponents of the open-market model. We believe a partner ought to have the ability to register and identify leads and opportunities and be protected in the process of doing that. We ought to be adult about opportunities where we think we want to lead vs. the partner, and make sure they get a represented and respectful percentage of the business in those opportunities. We want to make sure the program we put in play makes it easier for us to collaborate with one another as opposed to being more adversarial.

VB: My recollection is that you guys take the lead in anything over $1 billion in the open-market, general-business space?

Dennis: The open-market model means a person can register a lead anywhere inside of the GB space. We are talking about expanding that program. But, right now, that's what it is.

VB: Can you touch on what those plans might include?

Dennis: We might just take away the boundaries.

VB: The physical ones or the dollar thresholds?

Dennis: The physical ones that say it's just general-business tech. It could be the whole applications portfolio and the e-business suite portfolio across all of the customers in the marketplace.

VB: Just so I understand, today it is limited by what?

Dennis: Limited [by] general-business technology.

VB: Other goals? How have you hit the job for the past six weeks?

Dennis: Well, my personal goal is to make sure the sales organization understands that we are there to help them sell more licenses, right? I spend a good deal of time with my direct-sales brethren making sure that they are satisfied with the level of support they are getting out of the channel managers and that, in fact, we have everybody doing the right things. The other area I am spending a great deal of time [on] is to make sure that in our industry's organization that when we talk about filling out industry footprints that we do the right kind of ISV recruiting. It's interesting that in building out an industry footprint, you might in fact choose an ISV that's important, so that solutions functionality meets the requirements of the industry experts. But you might also want to make sure that there are some industry-driving ISVs baked into the footprint that [other partners who might want to work with theose ISVs] might not think about. So I am engaged in conversation about that kind of stuff. I just want to make sure that we maximize the use of channels to our advantage in all of these initiatives. I spend my time going around talking to people about what they are thinking of doing and what opportunities exist [for] channels, and then aligning people to support, investigate, analyze and make recommendations to those teams on how to do it better.

VB: In the partner-satisfaction continuum: Are you guys up over where you were a year ago, on par but on the cusp of some improvements, still need some work, etc.? What do your own measurements tell you?

Dennis: In Keith Block's North American sales kick-off in Las Vegas recently, we had an ISV/integrator/OEM solution fair. We did some polling on the reaction of the partners to, not just the behavior of the sales force, but the ability to do business with Oracle and the support from the channels [group], etc. The feedback was very positive. We are on an uptick there.... The feedback I'm getting on the amount of friction that was caused by a fragmented channel organization across all those entities in North America [was significant.] Nearly every partner loves the idea of it being centralized and staged in a single channel organization. Hard for me to image we aren't doing better than a year ago.

VB: The change in behavior of the salespeople in the field: Is this as radical a change as you have ever seen, in terms of how they go to market day-in and day-out with their jobs?

Dennis: In the general-business space it is not as radical as it is in the majors space. I assume that's what you are referring to and it is a significant change. In majors and in the big accounts, it was typical that a sales rep would wake up in the morning and would be competing against SAP on Day 1 and arguing about BEA on Day 2. Expecting sales reps to have that breadth of understanding was ambitious. So, I think that the idea of people knowing they are going to feed their families and send their kids to school on the quality of their applications-server business has had a dramatic influence on the sales force. We're seeing the benefits of that. As a result, there's more clarity in channels because people are more interested in working with partners. There's a more clear-cut and refined list of ISVs and so on. I think it is a radical change.