Oracle Resellers On Sun Hardware: No Burden, Possible Opportunities

Last week, Oracle CEO Larry Ellison made it clear that his company will become a hardware vendor and support Sun's server and storage hardware products once the deal closes sometime this summer. Ellison, in a widely disseminated Q&A with Reuters, repeated promises he and president Charles Phillips made at the time of the acquisition announcement that Oracle would use Sun's hardware to offer customers complete turnkey server-to-application systems.

Ellison's comments dampened speculation that Oracle is buying Sun primarily for its software products, such as the Java development technology and MySQL database, and will either discontinue or sell off Sun's hardware operations once the sale is completed.

But what does that mean for Oracle's channel partners? In interviews with Channelweb.com, Oracle solution providers, including ones who only sell software, aren't worried that Oracle will push them into selling hardware. Some even see potential opportunities in the idea.

"I can definitely see the value in it," said Hal Hawisher, principal at Baytree Associates, a Charlotte, N.C.-based solution provider, of the idea of selling servers bundled with Oracle database, middleware and application software. "I could see us selling the complete technology stack. That's pretty compelling."

That would mark a significant change for Baytree, which currently sells Oracle software exclusively, with no hardware. Hawisher said such complete hardware-software packages would particularly appeal to existing Sun and Oracle customers, as well as to customers that need systems with high-throughput performance.

Oracle will at least gain a healthy level of recurring revenue from Sun's hardware maintenance services, said Ron Zapar, CEO at Re-Quest, a Chicago-based Oracle partner. "The main thing [Oracle] did is protect their installed base on that platform," he said.

Re-Quest sells some storage hardware from EMC, but it doesn't sell any server hardware and Zapar professes to be "agnostic" about servers. He might consider reselling Sun storage systems: "That may be an option," he said.

While he said hardware-software combination appliances could be successful, Zapar was skeptical about how long Oracle would hang onto Sun's server business. In any event, he wasn't worried about the possibility of Oracle pressuring its channel partners to carry its hardware products. "I think we'll adapt to where Oracle goes with that whole thing," he said.

"I'm not concerned about that," Hawisher said of the possibility of Oracle leaning on resellers to carry hardware. "Honesty, I don't think that will be the case." Baytree sells Oracle software for server platforms from multiple vendors, "and I suspect that will continue," he said.

"We haven't heard anything on that," said Richard Niemiec, president of TUSC, a Chicago-based systems integrator and Oracle software reseller, about whether the vendor will expect resellers to carry Sun hardware. "We have a ton of clients on Sun hardware."

The only hardware products Oracle sells today are a database appliance and a programmable storage system both jointly developed with HP. Resellers said they were not carrying those products and had not seen much demand for them.

Several resellers noted that Oracle has made more than 50 acquisitions in the last five years and they have never felt pressured to sell products outside of their comfort zone. That, despite pleas from channel executives at last year's Oracle OpenWorld conference for channel partners to carry a broader range of the vendor's software products.

Niemiec says MySQL is the big prize in the acquisition because he sees that database as the most direct competition to Microsoft's SQL Server database over the next five years. "I think that's huge," he said. He also noted that Oracle is gaining Sun's StarOffice suite of desktop applications in the deal. "I think Microsoft should hear footsteps," he said.

Although Zapar generally praises Oracle's channel programs, he suggested that some of Sun's approach to the channel might rub off. He cited a time when he called Sun on an integration project and Sun insisted he had to get the needed information from the solution provider involved in the deal. "Sun, for a long time, has been a channel-friendly organization," he said.