Lines Drawn In The Sand: Are Oracle’s Partnering Efforts Ready to Stand Among its New Competitors?

October 14, 2009 at 2:45 am Leave a comment

Oracle PictureBeth Vanni – Director, Market Intelligence

October 12, 2009 —  Oracle OpenWorld 2009:   As Sun Microsystems’ Chairman Scott McNealy literally passed the baton to his “better capitalist” colleague, Larry Ellison, it became clear on stage to most OpenWorld attendees that Oracle is entering a new league.  When the Sun acquisition becomes final for Oracle, targeted for January 2010, Oracle will join the short list of enterprise computing platform mega-vendors, namely IBM, HP, and Cisco.  But, will the Oracle Partner Network measure up to the maturity of the world-class channel engagement and support programs offered by its peers?

Ellison was almost giddy on stage with what Scott called “Larry’s new toys.”  He flashed dramatic benchmarks results of Oracle’s database running on Sun servers across the 15’ screens, throwing the Sun/Oracle solution squarely in the face of IBM’s.  Ever the engineer, Larry restated the company’s expectation to spend more on SPARC, Solaris and MySQL than Sun has historically – adding to his existing $3b R&D budget.  In a direct rebuttal to IBM sales and marketing attack campaigns, Ellison vowed to continue the legacy of innovation so long associated with Sun.

Partners were mentioned frequently as a critical competitive asset for Oracle in achieving its goals.  Oracle executives cited year-over-year global partner revenue growth of 3%, and the fact that partners now represent 40% of Oracle’s license revenues globally. Yes, that’s faster growth than Oracle experienced in overall sales licenses last year.  A major program change to the Oracle Partner Network was also announced, ala Microsoft’s recent announcement.  The Redwood Shores giant is reorganizing their entire global partner program structure to be based on some ~60 standard competencies and industry solutions. Called “Oracle Partner Network: Specialized” the new common framework is intended to simplify partner engagement and increase visibility for partners’ technical and solution skills – with both customers and internally at Oracle.

So, all that is goodness.  80% of the transaction count done through partners is good – although that’s still only 40% of revenues.  Program simplicity is good, very good.  A common global framework makes the program more scalable, hopefully easier to understand and more predictable to invest in by partners. And, the OPN portal with streamlined Knowledge Zones seemed a lot cleaner and aligned with the broad Oracle product portfolio.  Given Oracle’s somewhat questionable reputation around the consistency and commitment of its partner engagement, everything announced this week was encouraging.   But, is it enough?

Being in the “big 4” limelight shines a new (and hot) light on Oracle’s true intentions and commitment to its partner community. HP and Dell will be both friend and foe with levels of “co-opetition” like Oracle has not yet seen. And with Cisco’s recent unified data center manifesto, the gloves are definitely off about who’s going to own the converged data center.  Both players have a decades-long commitment to partnering with partner teaming and go-to-market dependencies woven into the very fabric of their culture.  That’s not to mention IBM’s multi-billion dollar commitment to partnering, and their significant focus on industry solutions through a very broad base of both ISV and SI partners.  Stiff competition.

Despite major progress on the program front and a lot of investment in systems, automation and training content, the Oracle culture has a long way to go in truly accepting partners as a fundamental dependency for long-term market dominance.  Given the company Oracle now keeps and its competition for the sales and solution-development capabilities of partners, it would do Oracle well to show a bit of humility. Those business value propositions about why partners should invest seem like they need a little work, to expand beyond the value of the Oracle direct sales team not competing with the partner.  If you want to see these four manufacturers companies really pull out the big guns, wait until the partner mindshare wars really begin …..

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HP DOUBLES-DOWN ITS BET IN THE DATA CENTER: Announced Enhancements to PartnerONE Program OPN Specialized at Oracle OpenWorld 2009

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