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Oracle wants to offer its solution providers consistency, predictability, and transparency in its partner rewards, Standard said. The company can also be flexible with those awards.
"Our strategic product category is something we can change every six months," he said. "There will be other products VARs can be asked to sell, and we'll add those products to the strategic category."
As for the rebate payment timeline, Standard said the rebates are paid based on the net sales to Oracle, and that the company will wait until the end of the quarter to start the process.
"So after the close of our books, the day we announce earnings, we can start reconciliation with our partners," he said. "We need time to do this. We've deal with the channel for many years. For us to be able to account for the rebates and be exact, we need to wait for the quarter to close."
Oracle also believes the new rebates should have little or no impact on street prices, Standard said. "But we're offering no definitive restrictions for what VARs do with the money," he said. "Oracle's goal is to get additional sales on specific products and services."
Standard said that Oracle did end the old Sun Microsystems' Partner Growth Fund (PGF).
"However, that was a percentage of a percent of sales, a very small amount," he said. "It's hard to accrue, and hard to monitor. So it now falls into our new incentives funding. Sun's PGF was very restrictive about what could be done with the funds. Our program lets VARs do what they want with it. If they want to buy a beach house with it, they can."
Murphy said the new rebates offer potential upsides for solution providers, depending on which accounts Oracle keeps as named accounts.
"Oracle is seeing they need the channel business, and they're coming out with specific incentives to support us," he said.
Andy Kotarba, president and CEO of Dewpoint, a Lansing, Mich.-based solution provider and Sun partner, said his company, like most ex-Sun solution providers, has had to make a lot of adjustments to their business after Sun was acquired by Oracle.
That included adding staff, database administrators, and consults to help build new offerings based on Oracle's product line, Kotarba said. "So for us, new rebates for hardware and software, and new rebates on strategic products, are for Dewpoint all upsides," he said. "We weren't expecting it. It's a better economic model than a month ago. So we are aligned on it."
The delay in getting paid the rebates, which could amount to two to four months, is a challenge, Kotarba said. "We need the details," he said. "For a company like ours, we need to know where any dollars are coming from if Oracle wants us to compensate our sales team."
For Kotarba, the biggest challenge working with Oracle is the need for the vendor to improve its field engagement with its partners. "We're still running up against direct sales in small accounts," he said. "But it's changing for the better. Oracle knows it needs to engage to channel to grow the business."
Murphy said he misses the rebates channel partners used to get from Sun before it was acquired by Oracle.
"Oracle has a different model from what Sun had," he said. "But this could be good, given Sun's financial model. But it's not always as good for the channel."
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