Oracle Partners See Allegiance Tested

Several current Oracle solution providers affiliated with either Avnet or Agilysys report that they have been approached in recent weeks by representatives from Ingram Micro and Tech Data.

Oracle, Redwood Shores, Calif., authorized both broadline distributors last year for its technology products—the database, application server and middleware offerings. At that time, the vast majority of Oracle's North American partners sourced through Avnet, Phoenix, or Agilysys, Boca Raton, Fla.

The deal was announced at Oracle OpenWorld last October, and Oracle set up a moratorium to keep the broadline distribution powers from attempting to poach Avnet and Agilysys affiliates for one year. That year isn't up yet, but that hasn't stopped some Ingram Micro and Tech Data reps from putting the hard sell on some VARs anyway, according to channel sources.

Some of this behavior is to be expected. "In fairness, when Ingram and Tech Data saw that we didn't want them to focus on shifting existing VARs, they understood and asked us for a list of the VARs [affiliated with Avnet and Agilysys] but we understandably could not provide that," said Judson Althoff, Oracle's vice president of distribution and platform alliances.

They can call once, he noted. If a VAR gets more calls after stating his affiliation, the situation should be escalated, he said.

Several Oracle VARs from both the Avnet and Agilysys sides say they were approached. The reps, they said, were aware of their current affiliations. None of the solution providers contacted by CRN said they planned to switch sourcing as a result. "I can't wait for Oracle OpenWorld. It'll be a feeding frenzy," said one longtime Oracle partner.

At the big confab in October, distributors can wine and dine VARs as they see fit. "Basically, the VARs self-select [their distributor] and Oracle retains the right to evaluate requests to transition," Althoff told CRN. It is in no one's interest for VARs to jump around on a transaction-by-transaction basis, he added. Contracts typically run for a year.

For partners, "there's a natural desire to kick the tires, to look at something new and to [check out] new options," Althoff said.

"There won't be a ready-set-go starting-line nuttiness at the show. The time periods are tied to the VAR's original deal with Oracle. When they come to the end-of-year period, they can make a change or not," he said.

While the VARs who spoke to CRN said they got the impression that the two broadline distributors are not pleased with the uptake they've had so far with Oracle partners, Althoff said the feedback he's had from both indicate they are satisfied with the momentum.

It was inevitable that Oracle, which is trying to juice sales into small and midsize businesses in all regions, would expand distribution. That's something even Matt Reaves, vice president of software sales for Agilysys, concedes.

"Look at where [Oracle President] Charles Phillips is sitting; he wants more global distribution. When you look for global distribution and the variable cost model, Tech Data and Ingram are the only two choices," Reaves said. "I've never [thought] that Oracle would be content with just two distributors in North America, so having Tech Data and Ingram come in mixes it up a little bit and makes us work harder too. It's probably a positive for me and for Oracle."

Nancy Goldman, director in Tech Data's software licensing group, Clearwater, Fla., said her company deals with more VARs than either Avnet or Agilysys and at big VAR events the distributor's Oracle staff will talk to anyone.

"It's possible we'll contact a VAR with a 12-month agreement. If we're informed of that, we make it a point not to call back," Goldman said.

Any conversation between Ingram reps and out-of-bounds VARs was initiated by the VAR, said Jodi Honore, vice president of vendor management for Ingram Micro, Santa Ana, Calif.

Oracle VARs, however, say the talks have been initiated by the distributors.

One Avnet affiliate, who said his company has been pitched by the broadlines, said he might benefit from having multiple distributors.

"[If] you deal with multiple distributors, you can play them off against each other for better terms. On the other hand, Tech Data and Ingram handle a lot of the other products we buy and sell, so consolidation might make sense," he noted.

An Agilysys partner sees no reason to move. "They provide real service in marketing and help us sell," he said.

Avnet sells Oracle's technology products and, since last year, its applications; Agilysys and the broadline distributors handle just the technology products, although sources expect Agilysys to add Oracle applications soon.