Oracle Offers Rebate Incentives For VARs, VADs

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Oracle is offering its VAR and VAD partners bonuses for selling more combined Oracle hardware and software systems through registered deals, and for selling server and storage systems that Oracle deems "strategic."

Oracle has also launched a new program to grow the number of ISV partners developing applications that run on the vendor's Exadata Database Machine and Exalogic Elastic Cloud server flagship hardware systems.

Channel program managers detailed the new initiatives at the company's annual kickoff event for the Oracle PartnerNetwork (OPN) program.

"We want to reward partners for investing in the right areas," said Judson Althoff, vice president, worldwide alliances and channels and embedded sales, in an interview following the partner event Tuesday.

Under the OPN Incentive Program Oracle is offering rebates to VARs and VADs that sell combined Oracle hardware and software products in registered deals outside of the 2,000 top accounts Oracle sells to directly. Althoff declined to disclose the size of the rebates, saying they are available to partners on the company's OPN Web portal.

The company is also offering rebates, which Althoff described as in the "mid-to-high teens," for selling "strategic" products, including Sparc T-Series servers, ZFS unified storage appliances and tape storage systems.

The added incentives are on top of standard margins resellers earn on those products, Althoff said.

Last week Oracle reported healthy sales gains for its software products in its fourth quarter – the company's first to exceed $10 billion in revenue. But sales of server and storage system hardware, while reaching $6.9 billion for all of fiscal 2011 (ended May 31), were down 6 percent year-over-year.

Oracle has been touting the opportunities for channel partners to sell more Oracle hardware: Althoff said Oracle has 400,000 customers, but 300,000 of them are running Oracle software on hardware from other vendors. The rebates are designed to be an added incentive to grow those sales.

The new Exastack program is designed to expand the number of applications developed by ISV partners for the Exadata and Exalogic systems. Oracle just installed its 1,000th Exadata system, and CEO Larry Ellison has vowed to triple those numbers this year.

"This ISV strategy is a big part of that," Althoff said. "We're very bullish about the market right now."

ISV applications can qualify as "Oracle Exastack Ready" when the software runs on and supports Exadata and Exalogic components, such as the Oracle Solaris and Oracle Linux operating systems, the Oracle Database and the Oracle WebLogic Server. The applications can achieve the higher "Oracle Exastack Optimized" level of certification when the partner has tuned it for the Exadata or Exalogic system for maximum speed, scalability and reliability, according to an Oracle statement.

For ISVs the Exastack Ready designation is equivalent to the basic certification under the OPN Specialized program, Althoff said, while the Exastack Optimized designation is equal to the program's advanced certification.

Oracle launched its OPN Specialized program in 2009 in an effort to boost channel partners' expertise around the company's hardware and software and encourage them to build more value-providing services around Oracle products.

As of the end of the fiscal year Oracle had 2,400 partners certified as specialists, exceeding the company's goal of 2,000. The number of certified technical individuals has grown from around 10,000 at the start of the fiscal year to 23,000 by last month. The company plans to double that number again in fiscal 2012, Althoff said.

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