HP, Sun And Oracle: Partner Plans For 2003

This year, the likes of Cisco, Microsoft, Novell and others have already made substantive changes to their programs. Now, three more top vendors,HP, Sun and Oracle,are preparing new initiatives for 2003. And they could be the most significant changes yet.

HP, which merged with Compaq earlier this year, officially rolled out PartnerOne at the beginning of this month. It's an entirely new channel architecture that represents the single biggest change in the history of HP channels. For months, company officials tested models, tweaked T&Cs, and rethought every facet of partnering. Because of the scope of HP's products, it has been a challenge, concedes Kevin Gilroy, HP's vice president of the volume channel business. For the 21,000 business partners the company engages on a worldwide basis, "a monolithic channel strategy won't work," he says.

What has made Gilroy's job even harder is HP's focus on growing its direct business. Frustrated at times, but undaunted, Gilroy and Dan Vertrees, his counterpart who runs HP's commercial channels, set out to return more to HP and preserve opportunities for partners. Although some partners who have been briefed on the changes are not happy, Gilroy and Vertrees say they will be once they see what the changes mean. For example, the 51 Platinum and 256 Gold HP partners will get more benefits than before. Also, contrary to what some VARs fear, the number of Gold and Platinum partners is likely to go up next year, HP says.

Three Goals For Sun

Like HP, Sun, too, is planning to provide additional benefits to partners who make substantial commitments to it. Like his fellow channel execs at HP, Sun channel vice president Gary Grimes says the adjustments his company is making represent "the largest change since Sun introduced a partner program back in the early 1990s." Sun's three goals for 2003: improve partner profitability, simplify T&Cs and better recognize allies who help Sun achieve its objectives.

Going forward, all Sun partners will be called "iForce Partners." Gone are the six different monikers that Sun used to distinguish allies. Top partners who sell $10 million worth of products annually and meet other strict criteria will be known as Strategic iForce Partners.

To help partners make more money, Sun has created eight new incentive programs to reward those who remain exclusive to Sun, have a unique value-add, create special solutions around Sun products and/or get inside business that Sun has not been able to penetrate. To make this happen, the company dipped into the pool of market development funds, which, Sun found, was not well-spent by partners. Some of it went to golf shirts or radio ads. Now the money will go directly to VAR profitability. Consider one scenario, as presented by Bill Cate, Sun's director of the iForce program office: Under the old plan, a VAR who sold $1 million worth of Sun gear would get $40,000 in market development funds. That same VAR today could get as much as $180,000 in real money for that same $1 million sales. And that's not counting any profit the VAR made from the customer.

Oracle, too, is making changes, according to Julie Tung, vice president of Oracle alliances and channels. For 2003, the Oracle PartnerNetwork program will require that partners classify themselves by various partner types. That way the company hopes to provide additional benefits to those who make a greater level of commitment. Those benefits could be new migration tools, rebates on certified professional exams and advertising discounts. But the biggest change, perhaps, is the one taking place within the executive offices at Oracle. "The executive commitment is radical," she says.

Come next fall when we release the VARBusiness 2003 Annual Report Card survey on partner satisfaction, we'll know definitively whose changes were for the better. But, if history is any gauge, we'll know anecdotally by January who is on the right track. We'll keep you posted.