Oracle Is Planning To Get Partners To Cloud 'Nirvana'

Oracle, once considered a holdout, over the past year has emphatically set its course for the cloud, translating almost every product in its vast portfolio into a public cloud service or private cloud infrastructure component. As the Redwood Shores, Calif., enterprise software giant heads full tilt toward on-demand computing, behind the scenes it's orchestrating a transformation of its massive channel to better align with that strategy.

Executive leaders of the Oracle PartnerNetwork (OPN) are working to update the global partner program on many fronts.

They've started by outlining the attributes of a successful channel partner in the cloud era, and with that mold in mind are preparing to revamp OPN, implementing a strategy to assist partners of all stripes in transforming their business by fully embracing cloud practices.

[Related: Oracle OpenWorld 2015: Intel CEO Talks Transformational Partnership With Oracle]

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That's no small feat for an organization that oversees 25,000 partners globally. And Oracle wants every last one of them to bring cloud to the table when talking to customers.

At Oracle's recent OpenWorld conference in San Francisco, Oracle executives in a series of partner sessions began describing in broad strokes their emerging channel vision. Many of them later spoke to CRN about where that vision will lead partners.

"It's fundamentally a series of strategies, initiatives, programs that every partner will subscribe to," Dan Miller, who recently joined Oracle as senior vice president in charge of the ISV side of the program, told CRN.

As an initial step, Oracle unveiled at OpenWorld new OPN program tiers universal to all partners, be they ISVs, VARs or systems integrators.

Those include a level intended as an on-ramp for new Oracle partners -- Cloud Registered -- that's already accepting entrants (with no first-year membership fee until May 31).

But the major components of the OPN restructuring will be revealed Feb. 1, when Oracle launches four new designations: Cloud Standard, Cloud Select, Cloud Premier and Cloud Elite.

Each designation will have specific revenue and demand-generation benchmarks, as well as benefits, that are still being hashed out.

The criteria for entering and ascending those tiers will be determined along the guidelines of "making sure it gives the right motivation for their success," Penny Philpot, Oracle's group vice president of worldwide alliances and channels, told CRN.

Michael Richardson, co-founder of Eclipsys Solutions, an Oracle partner based in Toronto, told CRN the company is looking forward to hearing more about the evolution of OPN, "in particular the focus on ensuring partners can fully participate in the move to the Oracle cloud, not just at the time of the initial contract, but over multiple years as the customer renews and expands their relationship."

Mapping Out Oracle's North American Channel

Bill Swales, corporate vice president of alliances and sales, joined Oracle only a few months ago, taking leadership of the company's North American channel.

To wrap his mind around the vast partner ecosystem he'd inherited just at the point it was embarking on a major transformation, Swales started a project of mapping Oracle's North American channel, creating a topology across geographies, verticals served and technological expertise.

Swales hopes that map will help him reduce the potential for channel conflict as more Oracle partners start bringing its numerous cloud products -- from hundreds of SaaS and middleware apps to infrastructure services -- to market.

He hopes to foster an ecosystem in which partners are highly differentiated by deep specializations in technologies and products, vertical expertise and geographic segmentation.

But Swales also would like to see all partners share a few commonalities.

They should be working with their clients' line-of-business leaders when possible.

They should be offering a healthy mix of advisory and consulting services, deriving somewhere between one-quarter and one-half of their revenue from those practices.

They should represent to customers the entire Oracle hardware and software stack, both as an on-premise solution and in the cloud.

And they should consistently highlight the value of "Oracle on Oracle" -- meaning the benefits of cloud solutions built on the same technology as data center products, and spanning the entire stack. That discussion should always touch upon security.

"All that with the right level of interlock with our sales team, it's nirvana," Swales said.

Cloud Blurs The Lines

Oracle breaks down the organization of its partner network along three partner types: ISVs, VARs and systems integrators.

At the same time, Oracle's channel executives recognize that one effect of cloud adoption is that the lines are blurring -- to a degree, all three partner types are selling, integrating and often developing solutions for customers.

But while the boundaries that demarcate ISVs, VARs and systems integrators are becoming more permeable in the cloud era, the three business models have distinct objectives and challenges, Joel Borellis, group vice president of partner enablement, told CRN.

Oracle's large network of systems integrators especially must grapple with cloud posing a significantly "different implementation from legacy products," he said.

For that reason, "on the SI side, we're more focused on training and enablement," Borellis told CRN.

One organizational shift "which says a lot" about the disruption the cloud has caused for systems integrators, Borellis noted, is that Oracle's entire systems integrator program has been put under the oversight of Shawn Price, senior vice president of Oracle Cloud.

But gaining proficiency in integrating cloud services also creates a host of new, high-margin business opportunities, like projects customizing user interfaces for clients, Borellis said. The coming OPN changes will add competencies to help systems integrators capitalize on them.

Jeff Porter, director of Oracle's product channel sales, told CRN the new Cloud Registered partner level was designed to attract innovative, modern VARs, especially those born in the cloud.

To get them started working with Oracle, Cloud Registered allows VARs to sell PaaS and IaaS products, receive training in Oracle's technology and sales methods, and gain overall understanding of Oracle's value proposition, Porter said.

But the changes coming in February will go further to create the channel framework through which VARs can earn recognition for their cloud capabilities and differentiate themselves, Porter said.

Those new designations will reflect the maturity of cloud go-to-market strategies, he said.

In recent years, many cloud vendors, including Oracle, have explored substantially different program models to figure out which best enable partners facing a business paradigm characterized by recurring revenue and value-added services, Porter said.

"I think we're getting past the first chapter of partners participating in cloud," Porter said. "Now that it's maturing, partners are starting to look at some baselines that vendors offer."

One such baseline channel partners carefully consider is the margins they receive on renewals the first or second years after signing a customer, Porter said. That's one of many topics the program changes will soon address.

Partners also are enthusiastic to exploit openings the shift to the cloud has created in the midmarket.

Oracle products -- once price-prohibitive in data centers -- are affordable as cloud services, but the true potential of those business opportunities depends on the margin structure of the channel programs.

Eclipsys Solutions’ Richardson said Oracle's done a good job so far of rewarding partners who sell strategic products with healthy rebates. "And swim lanes are increasingly clear," he said, especially in the SMB market.

Oracle's largest partner, Chicago-based global consulting powerhouse Accenture, recently launched its Accenture Oracle Business Group to bring Oracle's cloud solutions to enterprises that are transforming their IT architectures.

The new division, focused on getting customers to the cloud quickly and delivering a predictable outcome, exemplifies the tectonic shift across the industry, Brian Sullivan, managing director of the group, told CRN.

"There's no question that the transition to cloud environments is creating a different competitive environment for everybody," he said.

Just about all Accenture customers are going through a similar evaluation process, Sullivan said, where the conversation has shifted to how Oracle and Accenture can jointly provide the best road map to move more of their workloads to the cloud.

"I do think that it's wise that all players in that ecosystem are re-evaluating their strategies going forward," he said.

But like all of Oracle's 25,000 partners, as far as the program changes in the works, "I'm still waiting to hear more," Sullivan told CRN.