Mark Hurd lays the foundation for Oracle's channel charge
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Exadata is just one example of the blinding pace of hardware/software innovation that has taken place under the direction of the Ellison-led Oracle-Sun engineering team, Norman said.
“We all hoped and were looking for something great and revolutionary,” she said of the new Sun product lineup, which now totals 60 different hardware models. “But to be sitting here 18 months later and see the breadth of product is amazing. It certainly gives you something to go out and talk to customers about.”
Norman, who has been part of a number of Hurd’s open partner sessions, credits him for bringing the solid grasp on hardware sales and logistics that was missing at Oracle. “Everyone [at Oracle] was coming at it from selling software,” she said. “You can’t sell hardware in the same way. Just the mere fact that there are logistics and shipping and pieces and parts. He brought all that knowledge to Oracle.” Hurd’s commitment to “reward the partner community for all the investments” made to sell the Oracle product line is key to the company’s success, she said.
The payback for partners investing in what Oracle calls its best-of-breed stack also is showing up in the bottom line of Maplesoft Group, a longtime Sun hardware partner in Ottawa, Ontario. Jack Gulas, a former Sun executive who is now CTO of Maplesoft Group, said the company’s business model is much stronger with its Oracle database and middleware specializations.
Two years ago, Maplesoft Group’s annual sales were made up of about 80 percent Sun hardware sales, 15 percent software sales and 5 percent professional services. Today, its professional services quotient is up to 15 percent of sales, software has more than doubled to 35 percent of sales and the remaining 50 percent is hardware sales. Professional services margins of 30 percent to 40 percent and dramatic increases in services attach rates are key to significant profit gains that have come with the shift to the Oracle hardware/software-engineered systems business model, said Gulas.
“It’s exciting because as we are going up the stack, we are talking with the customer at a much higher level,” said Gulas. “And it’s a much stickier business. My [sales] reps aren’t having to fight for every deal because of the high impact of the ‘winning with architecture’ [sales model].”
Gulas also considered alternatives in the wake of Oracle’s acquisition of Sun, but a big factor was Oracle’s pledge not to build out a huge multibillion-dollar independent services organization like IBM or HP that competes with his services business, he said. “IBM is always after me. But they can’t give me any guarantees that [IBM] Global Services won’t compete with me. That is why I want to partner with Oracle, because they are not competing with us on services and they have the best portfolio of intellectual property from applications to disk. Based on the economics of the business, as one of the owners, it is my fiduciary responsibility to get into services and systems integration. And that is what we are doing.”
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