Q&A: Oracle Channel Chief Says Partners Will Play Starring Role In Expanding Its Cloud Business

Rich Geraffo joined Oracle last October as head of worldwide channels and alliances, becoming the latest member of former boss Mark Hurd's roster of former Hewlett-Packard channel executives.

Geraffo was senior vice president and managing director of HP's Americas enterprise business and he has previously held channel positions at VMware and IBM. He now oversees all of Oracle's routes to market, including global systems integrators, Java business partners, ISVs, and distributors and resellers.

CRN sat down with Geraffo at Oracle's headquarters in Redwood Shores, Calif., for a wide-ranging discussion about Oracle's channel reputation, its evolving cloud strategy and why Oracle partners have nothing to fear from the company's practice of hiring college graduates and training them as salespeople. Following is an edited transcript from that interview.

Q: Oracle has a well-established channel program. Yet we regularly hear from partners that are frustrated with channel conflict and other issues. Why do you suppose that is?

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I don't agree that Oracle is not channel-friendly, because the fact of the matter is we have a pretty big channel organization. And if you look at routes to market, commitment to the Oracle Partner Network [OPN] and all the work around enablement of the channel, the fact is, we have programs in place that allow partners to build businesses around Oracle.

I think people get confused about how Oracle engages with and embraces the channel. And I think it's very different than most large companies.

What we are looking to do is leverage routes to market to help us grow. But Oracle has 20,000-plus salespeople, so they cover large portions of the market already. Now, as we expand the portfolio from traditional software into infrastructure, or cloud, we want to extend our reach.

We need distribution and resale to help us reach segments in the market where we're not covered. We're not trying to leverage the channel the way an HP, or IBM, or other large companies would. We want to extend our reach and become the sales force for Oracle to drive end-to-end solutions.

Second, We really want the ISV ecosystem in a big way, because most customers are looking for solutions today in a SaaS model. We need ISVs to build their solutions, take the Oracle solutions around database and middleware, help them build their apps in the cloud and then host them in the cloud.

I think partners are starting to see that we're serious. We're not building a fulfillment channel; we're building a value channel. And I think that's different from what our competitors are doing. It's all around value-based selling, so it’s going to be smaller, but it's also going to be different.

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Q: Oracle every year hires hundreds of college graduates as salespeople. This has been an issue for partners because it has generated channel conflict. Is this something you're aware of, and what can be done to address it?

It's a great thing that Oracle is hiring college graduates and giving them a chance to establish themselves in the marketplace. But we're pretty clear on rules of engagement. I'm driving code of conduct and rules of engagement.

We put new salespeople through a 10-week training program where they learn about products, go-to-market and channel engagement. Then the leadership team explains where the partners are playing. Market segment is really important.

When you come out of school, you're 22 years old and you're going to make some mistakes. But we have built a foundation to help them be successful and make sure they know we're not going to go compete against our partners.

Q: Oracle's sales force has a reputation for being one of the industry's most aggressive. Does this culture have to change at all to balance with the needs of channel partners?

No. We want to win in the market we choose to compete, period. The culture is not going to get diluted; it's actually going to get more aggressive. Because we have some competitors that have taken share.

In markets we compete in, we're going to be superaggressive. Partners play a key role in that. They are part of the solution, not part of the problem.

What I do is establish ground rules. That’s why the segmentation, or swim lanes, is very important. Where we want resellers is not where we have coverage -- it's where we don't have coverage. There's a clear expectation of what we want each other to be doing. If we have disconnects with partners, we fix them.

This way, we can look partners in the eye and say, 'Listen, if you registered a deal with us, we're sticking with you 100 percent, right until the end of the dance.' If Oracle's there already and driving the deal through a direct team, don't go there. This way, we get clarity and avoid the conflict and not have this overlap.

Q: What happens if someone doesn't follow the rules?

What we're trying to do in the leadership team is make sure partners win. And we'll manage those situations individually. But so far in 7 months, I haven't had a situation where I had to go course correct in an aggressive way.

Oracle has 22,000 salespeople, which means we are touching a lot of the market. The DNA of the team is aggressive, and we will win. But we're trying to figure out and make sure the entire team understands the importance and relevance of partners.

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Q: Oracle recently gave HP Diamond status in the OPN. Was this a sign that the strained relationship between the two companies is improving?

I probably wouldn't want to comment too much. But the fact that they're a Diamond partner says a lot. There are only 10 Diamond partners. These are companies that have made huge investments in building practices around Oracle IP. The fact that HP is committed to working with our technology platform to help them serve their customers is a strong vote of confidence in Oracle technology.

Q: Mark Hurd said on the last earnings call that Oracle is getting better at selling cloud. Is the Oracle channel also improving on this front?

I think our cloud vision is comprehensive. Where some of our competitors -- let’s just say Amazon -- say, come in and develop but potentially have only one choice to consume cloud offerings.

Let's say you're an ISV today. You just got funded by a VC -- what do you do? You can come to Oracle; you can start to do development in our cloud. You can develop your app, and then potentially build that app on top of our database, our middleware and our security offerings.

And then you can decide to host it, and we give you a proprietary hosting license where you can go out and sell it. Or you can build a solution and sell it as a value-added reseller and deliver it on-premise or in a hybrid environment.

Oracle has different intellectual property, different routes to market and different business models. And competitors don’t have it end-to-end like we do.

Q: What role, if any, does Larry Ellison play in the Oracle channel?

I haven't talked with Larry specifically about the channel strategy. When you look at the leadership team at Oracle, Mark really owns everything around go-to-market, i.e. marketing, sales and the channel. It's very clear that he is completely behind the channel. The channel is very important for Oracle to extend our reach.