Oracle resellers: 'Give us our cash and make it snappy'

Oracle playing scrooge with rebates

channel

Oracle resellers are praying for quicker turnaround times for rebate payments under the revamped model, as many are struggling with cash-flow issues.

To qualify for the kick-backs unveiled last week, dealers must satisfy three criteria: they must register all deals on the vendor's Open Market Model (OMM) system; services must be attached; and the sales must be outside of Oracle's top 2,000 direct accounts.

This is the first time Oracle will dish out funds for hardware and software sales, and for products it deems strategic – lines that will change every six months.

"Claiming rebates has been painfully slow," said one Oracle house, "I've no idea what the new system will look like, but I hope it's an improvement on the old one."

On completing the acquisition of Sun last year, Oracle shelved all hardware rebates until September – when it backdated claims to June – but under the historic system, it reported all channel sales under one P&L and did not segment them.

As a result it had to retrospectively go through the numbers manually to allocate rebates accrued by resellers through their distributor, which caused the delay.

Under OMM, Oracle can track rebates more effectively, and in theory dish the cash more quickly and use the system to forecast sales.

One reseller source said it was typically waiting three to four months for rebate settlements and complained that it still had to pay staff bonuses, which put an obvious strain on cash flow.

According to US reports, Jim Standard, Oracle group veep for global channel sales, said the day the company made public its quarterly earnings it would be able to "start reconciliation with our partners".

"We need time to do this," said Standard. "We've dealt with the channel for many years. For us to be able to account for the rebates and be exact, we need to wait for the quarter to close," he was reported as saying.

Oracle EMEA said it had no further comment. ®

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