Oracle's Ochs Pins Program Improvements On Culture Change

The result is probably the most powerful combinations of technology that turns raw data into business intelligence. At the recent celebration of the Fusion rollout, Oracle president Charles Phillips and other top executives detailed the benefits of granular business intelligence. Fusion middleware is the platform on which Oracle, PeopleSoft and JD Edwards applications coexist; it's the workbench on which developers can more easily craft custom applications for their customers. To Oracle, Fusion is the future of its business and the net result of its acquisitions.

But bringing those products and technologies to market is the hard part. Eighteen months ago, Oracle's North America channel wasn't exactly A-list. Oracle, in fact, was still harboring its direct-sales legacy. To fulfill its business-intelligence vision, the vendor needed a new channel philosophy and revamped programs.

Enter Rauline Ochs, Oracle's group vice president who is charged with breathing new life into the vendor's partner programs. A channel veteran who cut her teeth at IBM and other high-technology companies, Ochs has infused the Oracle partner program with a newfound sense of purpose and presented resellers with money-making opportunities. As Oracle closes on Siebel, Ochs' channel is waiting to accept the new wave of products.

While admitting that Oracle's channel program is still a work in progress, Ochs says improvements boil down to culture change. She spoke with VARBusiness about her strategy--proving that ROI comes from embracing and nurturing the channel, and showing Oracle's direct-sales force how it can use solution providers to enhance revenue and grow business. Likewise, she's bringing partners back to the table and "showing them the money."

NEXT: How Oracle's channel has changed during the past 18 months.

VB: How different is the Oracle channel today than it was 18 months ago? How much of an improvement has there been? And what still needs to be done?

Ochs: Sure, there's a lot left to be done. I'm going to give you a proof point in terms of what has changed. And I'm not saying that it was negative or anything before this. The channel was always off on its side. We started emphasizing the virtues of the channel. With the support of Charles Phillips and [executive vice president, North America] Keith Block, we brought messages down to our sales managers and field representatives.

The biggest arbitration point is that the sales leaders this year took money out of their own pockets and funded channel managers on my team because they needed more and they want more from the channel. That's an internal win.

From a partner perspective, [there's been] the creation of territories. Oracle didn't have partner territories when we got here. We now have partner-only territories, which obviously help us around things like partner ROI, and I would say partner programs that are not only participated in, but hugely supported by, our field-sales leaders.

Our top 350 accounts are strategic. Everything below the line is what we would call commercial. And this is for our applications business, which is JD Edwards, PeopleSoft and the Oracle Application Suite. And what you start to see are two partner-only territories--customers with annual revenue below $500 million. JD Edwards is a partner-only product. And below $100 million, our E-Business Suite application is a partner-only product.

So these are territories where Oracle Consulting doesn't go in, where you can't take paper down unless it comes down on partner paper, and where we've put rigorous programs in place with these partners to invest in this territory--everything from the installed base to new opportunities. So they have access to sales engineers, they have Oracle's outbound telemarketing support, and they have a partner team to care for them.

VB: Where did the previous model come from? Why was Oracle so direct domestically and so channel-oriented internationally?

Ochs: The domestic direct-sales model was a result of concentration and affordability--one language, no value-added tax across states and other such factors. If you look largely at our emerging countries, like our Asia-Pacific region, they're largely indirect for lots of reasons. And so what you start to see is that we were able to pick up products like the E-Business Suite Special Edition for SMBs that were built in Asia-Pacific, build programs around them and then launch them in the U.S. channel.

NEXT: How Oracle will embrace partners.

VB: Oracle seems to have gained an appreciation for the relationships of solution providers and their customers, but it's still a direct-sales company. How can you change that culture so it embraces the channel?

Ochs: We do engage our partners because they have the relationships. Our business falls into a couple of different categories. We have the largest customers in the world, as well as a large number of SMB customers. We then have our technology products--the database and the app server. And we have our applications products, such as ERP, CRM and supply chain.

If you look at where our strength has been in partners traditionally--the partners we've had for 10 to 15 years--they're Unix-based, they're enterprise-driven and their average selling price of a deal might be $120,000. They're not small partners; we tend to have bigger partners because the average selling price was high. So in this space, we're very dependent on them, and yes, they have local relationships.

What you find is the next set of emerging partners who start to go into the midmarket and the SMB space, where we're not traditionally as strong. Nevertheless, we're growing because our products have moved downmarket, making this market much more important.

VB: What role do your distributors play in this channel transformation?

Ochs: We're now faced with channel-ready challenges. In the past, we were dealing in low volumes and high average selling prices. Now we're trying to move to a lower average selling price and higher volumes, and the challenge becomes how fast a transaction can go through. Ingram Micro, Tech Data, CDW and others have gotten us to the point where we have a channel-ready checklist.

For instance, last year we introduced Standard Edition One, an SMB database that had a 17-minute install. It goes head-to-head with Microsoft's SQL. This was a new market for us, and we looked to the SMB resellers of Ingram and Tech Data to bring it to market.

Distributors have access to resellers that specialize in the low end of the midmarket/SMB space. If you look at our very recent recruiting there, these distributors are 100 percent engaged because we don't have access to their customer base. We haven't had access to this partner set.

VB: Oracle went on a massive spending spree. How did the assimilation of those 300-plus PeopleSoft and JD Edwards partners go?

Ochs: I would say that the hardest part was contractual. We have to honor all the contracts. We had a sales-employee orientation within 30 days of when the PeopleSoft acquisition took place; we included our partners in that orientation so we brought them in and treated them like employees. They sat through the same sessions. We did calls on a regular basis, and I think some of the feedback we got was that Oracle is always reaching out and talking to us, talking to us more than we've ever been talked to before. So what has happened is the contracts came over and the partners stayed on. The global integrators were happy to take their Oracle practices and their PeopleSoft practices and combine them--that happened fairly quickly. The boutique integrators had been doing business with us, and they're still doing business with us. I'd say we retained almost all of them. We didn't retain all of the ISVs since some compete with us on the technology side. And we obviously didn't retain BEA as a partner.