Oracle Discloses Channel Rules To Partners

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Oracle executives sketched in some details of the company's new channel rules of engagement.

The rules, which have not been publicly disclosed, will let integrators and resellers participate in much larger account sales. Reseller and integration partners can now play in accounts with as much as $1 billion in annual revenue, said sources who have been briefed. Previously, Oracle's "all indirect model" let third parties sell into accounts with revenue of up to $250 million or, in some cases, as much as $500 million, channel partners said.

The company also outlined its new Channel Opportunity Registration System, which partners must use to register, and protect, their Oracle account prospects. Partners learned of the changes on a Friday afternoon teleconference.

The registration system is viewed by only those in the Oracle channel team, not by the internal Oracle sales force, Ken Muse, Oracle's vice president of North American Sales Channels, told CRN last month. While Oracle cannot prevent multiple partners from chasing the same opportunity, the partner that registers a live and validated sales opportunity first will get the vendor's support, the company said last month.

Muse, reached Monday, confirmed the program changes and said the registration system is operative as of now. "This is just the first of several changes we want to make," Muse said.

Oracle's field sales force has become notorious for its high-pressure sales tactics. Integrators and resellers historically have grumbled that the Oracle sales team, under intense pressure to make their quarterly quotas, have competed with channel partners in corporate database accounts. While Oracle Chairman Larry Ellison has said the company is discounting less and is trying to put a stop to such practices, some integrators remain wary.

Some resellers, however, were bullish. "It's a very, very positive news for us. ... There will be challenges and some conflict, but that's not necessarily negative if it's managed," said one large Oracle reseller who requested anonymity. Oracle has been discussing impending program changes for months.

Another large Oracle consultant said he would withhold judgement for now. "All of these registration systems work the same way. You have to register to stake your claim, but I would worry about registering with them. Wouldn't you?"

The news comes at a time when Oracle rival Microsoft is seeing strife with its own channel partners. Many Microsoft solution providers report increased conflict with Microsoft Consulting Services (MCS) and the vendor's field-sales force even in medium-size accounts where MCS is not supposed to play.

Last year, $1.5 billion of Oracle's North American sales came through indirect channels, and that revenue stream has swelled 350 percent since 1999, said George Roberts, executive vice president of North American sales at Oracle, in an interview last month.

Currently, Oracle sells its database and application server direct and through partners, but sells its e-business suite applications only direct. There have been reports that when Oracle offers the next revision to its e-suite, it will bundle the application server with the applications themselves. That could take yet another Oracle product away from the channel, resellers fear.

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