Mark Hurd lays the foundation for Oracle's channel charge
Oracle President Mark Hurd in March faced what was by all accounts an emotionally distraught group of partners complaining bitterly about their relationship with the company. It was the kind of gathering that must have brought a sense of channel deja vu for Hurd, who had grappled with the same kind of partner angst when he took over as CEO of Hewlett-Packard in 2005.
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The partner complaints were, in fact, eerily similar to the kind of margin-squeezed hardware direct/indirect sales channel dynamics that Hurd fixed at HP in relatively short order. This time, the majority of the frustrated partners were, once again, hardware-focused resellers. They had come on board when Oracle completed its $7.4 billion acquisition of Sun Microsystems in January 2010.
Hurd promised the Oracle partners at the meeting that he would return in 90 days with a compelling customer and partner value proposition, a go-to-market strategy to match, the right economics and, finally, operational support. But the meeting also came with some tough love. The days of Sun creating the hardware demand and allowing the channel to pick up the fulfillment at a rich margin were not coming back, Hurd told them.
Nine months later on a sun-drenched October morning on the 30th floor of Oracle’s Madison Avenue office, Hurd met with the CRN Editorial Board and explained that his philosophical approach to the channel is an economic one that benefits both sides. He was in New York preparing for a full day of meetings with some of the company’s most prized customers and partners. He would not talk about the controversial March meeting in the hour-long conversation with CRN. And although he is being hailed by Oracle partners for driving a high-margin channel makeover, Hurd refused to call himself a channel zealot.
“I got that same sort of feeling at HP,” he said in a no-nonsense rebuttal of the channel-friendly accolades that have come his way. “It wasn’t the way it worked at HP either. It is just the right way to run the business. And I think that, for channel partners, this view that it is sort of like some affection [is not right]. It is not. It is just good business. I actually believe strategically what I told you is right. So, therefore, you are not a channel zealot. You are just a zealot to get the model right. To get the strategy right.”
Getting the strategy right is what drove Hurd at HP, where he spent five years transforming a company that had lost its way into what many believe was one of the most respected direct and indirect hardware sales operations in the industry when he left. Hurd was ousted by HP’s board of directors last September for what the company called “violations of HP’s Standards of Business Conduct.”
At the time, Oracle founder and CEO Larry Ellison wrote in an e-mail to The New York Times that it was “the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.” One month after that e-mail, Ellison hired Hurd and asked him to put his sales and operations skills to work in a massive Oracle makeover that is, at its core, designed to capture the hardware franchise Hurd built at HP.
That meant putting in place at Oracle what Hurd refers to as his four-point plan:
• The right product value proposition and distribution strategy to go with it.
• Clear target markets for direct and indirect sales.
• Compelling economics for channel partners.
• Operational support for partners.
“If you get those four things right, my view is generally good things happen with channel partners,” Hurd said matter-of-factly. “Screw any of those four up and it doesn’t work so well.”
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