Oracle's Big SMB Stand

Oracle is now allowing solution providers to acquire Oracle Standard Edition (SE) and Standard Edition One (SE One) database software, the just-announced 11g, and other products in its SMB Technology line from authorized distributors for resale without requiring any direct contractual relationship. Under the new Oracle VAD Remarketer program, resellers don't have to join the Oracle PartnerNetwork, sign contracts with the vendor or pay up-front fees to resell the SMB software.

"This is going to take us further down into the low end," Oracle President Charles Phillips said of the new program in an exclusive interview with CRN. "The number of resellers and, hopefully, customers that have access to our products will go up substantially."

With the new program, Redwood Shores, Calif.-based Oracle aims to recruit a new class of reseller that has no direct affiliation with the vendor. Instead, solution providers will purchase software licenses from designated distributors and receive all training and support from them. Oracle has tapped Ingram Micro, Tech Data and Arrow Enterprise Computing Solutions as its authorized distributors for the program.

"It's designed to be a zero-barrier-to-entry solution for new resellers," said Judson Althoff, Oracle vice president of global platform and distribution sales and head of the new Oracle SMB Technology Program Office that's managing the latest SMB initiatives.

Hopes are that the new program could entice back resellers that abandoned Oracle because of channel conflict. Ntirety Technologies, a Charlestown, Mass., solution provider, has been selling fewer Oracle products and more Microsoft software because of ongoing channel conflict with Oracle's sales force, said CEO Michael Corey. "I like the idea of going through a distributor," Corey said. A distributor "is going to be supportive of me, but not try to get into my business. I think it's a very smart move by Oracle."

Still, Corey retains some skepticism, saying that Oracle execs regularly make comments about working better with the channel, "then slowly slide back to their old habits. I do a ton of Microsoft business because they're so much easier to partner with."

And some resellers just don't see the VAD Remarketer program applying to them. Baytree Associates, Charlotte, N.C., sells some—but not a lot of—Oracle Database SE and SE One software, which it acquires through Avnet. Baytree principal and COO Hal Hawisher says the program seems geared toward resellers that need to make quick $5,000 sales. "We'll take a $5,000 transaction, but it's not really our target customer," he said, adding that he had not been informed by Oracle about the new program.

The distributors, on the other hand, appear to have unqualified high hopes for the initiative. The new open-distribution model "takes away the barriers that have kept VARs away from Oracle," said Jodi Honore, vice president of vendor management, software, at Ingram Micro, Santa Ana, Calif. "We're hoping this will change the sales volume dramatically."

Some of the distributors are launching their own programs around the VAD Remarketer effort. Tech Data, Clearwater, Fla., unveiled the Go 'n Grow VAR recruitment and enablement initiative that will offer sales, technical and educational support to VARs that enlist in the program, including direct mail and marketing assistance, technical Webinars and access to Tech Data's 4,500-square-foot TDSolutions Center for demonstrating Oracle-based solutions to prospective customers.

"What it will do is bring in a new crop of resellers," predicts Stacy Nethercoat, Tech Data software vice president. The distributor already carries the SE and SE One versions of Oracle's database, as well as Microsoft's competing SQL Server. Nethercoat acknowledges there could be some sales overlap between them. "Resellers like to have multiple products they can bring to bear to put together the right solution to offer their customers," she said. "I think Oracle's timing on this is perfect."

Althoff said the goal is to get distributors to offer Oracle software as alternatives to competing Microsoft products. And while he maintains the program isn't specifically designed to convince Microsoft VARs to add Oracle products to their offerings, he expects that some of the VARs recruited by the program will come from the Microsoft space. Ingram's Honore expects to recruit VARs that now sell Microsoft and IBM products, as well as some that don't sell any database software.

A Renewed Push