Oracle's New Partner Path

In these designated geographic areas, all deals outside of strategic accounts would go through select partners and would be on partner—not Oracle—paper. In theory, that scenario would alleviate many of the direct/indirect sales conflicts that have plagued Oracle.

The first pilot took off last year in the Northeast with more coming online this year, sources said. The company plans to talk more about the pilots at Oracle OpenWorld in October, said Rauline Ochs, group vice president of North America alliances and channels at Oracle.

The idea is to move all sales in these designated territories through partners that are willing to dedicate resources and time to Oracle business, Ochs said. Oracle started down this track a few years back with its E-business Suite Special Edition, a channel-only product attacking businesses with less than $100 million in revenue.

"We started on the apps side and are moving to the tech [database] side," Ochs said. Oracle, Redwood Shores, Calif., is the worldwide leader in databases and the No. 2 player in enterprise applications after rival SAP.

"We did the pilot last year quietly, and when we had the results, we found that for every deal we handed to a partner, we got 1.2 deals back. Once we taught the partner, the [Oracle sales] rep becomes the mentor because he is not taking the paper," Ochs said. "We have high hopes that we can replicate [that] success."

But there are some big caveats. For one, Oracle's large named and strategic accounts would be exempt—and Oracle claims many such accounts.

One longtime partner estimates Oracle derives more than 90 percent of its database business from legacy accounts.

In addition, on the applications side, most sales remain direct by design, the exception being the E-business Suite Special Edition. Partners expect that to change, however.

Some long-standing Oracle partners maintain the software giant's sales force still competes with them for business, even taking over deals the partners brought to the table. They also flame Oracle for taking leads entered into the opportunity registration system set up specifically to protect partner-led deals.

"Inevitably what happens is if you put a deal in, they'll come back and say, 'We knew about that business in 1995,' " one partner said.

Ochs has been working on such issues for years and says partners experiencing these problems should escalate them to seek resolution.