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Oracle puts the squeeze on Sun channel

'The right call'

Partial dump

Oracle is not dumping the channel entirely, of course. It stated many times that it's more than happy to work with channel partners who “add value” to enterprise deals. This value would be along the lines of having a unique skill set in a vertical industry or a unique bundle that complements the Oracle/Sun offering. It also said that it will use the channel to service mid-market and smaller customers.

Right now, roughly 80 per cent of all Oracle transactions and 40 per cent of sales revenue flow through partners. However, we can probably expect to see a bit of a channel revolt against the New Oracle. Even in the best of times, Oracle hasn’t been regarded as particularly channel-centric. Now, with Oracle taking accounts out of play, there are probably going to be repercussions. How great an effect this will have on actual sales is, hard to say.

This new Sun sales force isn’t just going to be bigger by 2,000 folks; it will be more specialized, with dedicated server reps, tape reps, and storage reps. When it comes to servers, most multi-line channel partners are happy to install whatever box makes for the easiest sale to the customer. They typically won’t make a stand on a particular brand unless they don’t have a choice… like when another partner is selling against them with the same hardware, for example.

In past years, I’ve heard from competing systems vendors that they’ve been seeing less and less of Sun in competition for deals. IBM encounters HP in every deal; HP sees IBM in every deal; they both see Dell in quite a few x86 deals. But they don’t see Sun unless Sun is a strong incumbent. Sun’s move to an indirect sales strategy didn’t help this situation; it probably made it worse.

This makes Oracle’s main job on the sales side to get adequate coverage, and get the Sun solutions in front of buyers. Given what they said last week, Oracle looks to be grabbing this particular bull by the horns, wrestling it to the ground, giving it a briefcase full of thumb drives loaded with product pitches and PO forms, and unleashing it upon the enterprise computer-buying public at large. That should shake things up a bit.

Dan Olds is an Enterprise IT analyst, based in Oregon. He is also The Register's resident HPC analyst. You can read his HPC blog here.

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