Partner-friendly Oracle Update - Part 1

I certainly anticipated that the nearly 60 acquisitions by Oracle since 2005 would help the largest business software company in the world (with more than 320,000 customers in over 145 countries) continue to make even more money (e.g., via increasing cross-selling opportunities and by penetrating more markets) and deliver an array of reliable upper-range technology products. What I did not expect back then, though, was that Oracle would concurrently solve some shortcomings that had customarily plagued the powerhouse before this (still ongoing) acquisition spree.

Namely, Oracle was not then known for being the most partner-friendly company. The giant was also largely a horizontal technology infrastructure (i.e., relational database and middleware) provider rather than a trusted industry solutions adviser (and provider) at the time. To be fair, Oracle had an established presence in certain industries, but that was more coincidental (e.g., many financial service companies have bought Oracle Database or Oracle E-Business Suite) than a deliberate attempt by Oracle to provide a vertical industry solution per se.

With its techno-macho corporate culture (as opposed to more touchy-feely approaches by former PeopleSoft or JD Edwards), Oracle was also more of a fit for the largest global corporations than for the lower-end of the market. Indeed, its customers include 100 of the Fortune Global 100 companies. Well, what difference a few years and several dozen acquisitions may make!

In an upcoming series of blog posts, I plan to analyze Oracle’s recent moves to mitigate its abovementioned traditional shortcomings. The series starts with this post on Oracle’s strategy to become both a better partner in general and to attract smaller partners and customers.

To that end, Oracle’s Worldwide Alliance and Channels (WWA&C) organization’s mission statement is as follows:
“To increase revenue and profitability for Oracle and our partners, while building a strong ecosystem to better support solution sales.”

This translates into the following "three-legged-stool" strategic objectives:

  1. growing indirect and co-sell revenue – via monetization of acquisitions, penetration of new markets, and being a platform (database, business intelligence [BI], middleware, etc.) of choice for independent software vendors (ISV’s);

  2. providing automated partner systems – to institute simplified processes, enhanced partner and customer experience, and more efficient volume ordering; and

  3. advanced partner enablement – via partner training and triangulation, competency center and solution kits, and the Oracle Partner Network (OPN) 2.0 portal evolution.

Enter Oracle VAD Remarketer Program

Oracle has an impressive partner ecosystem that includes 40 global partners, 5,000 regional partners, and 15,000 volume partners. While the latter partners can certainly expand Oracle’s market reach into the lower end of the market, in the past they have often found dealing with the vendor too cumbersome to be worthwhile.

To that end, the somewhat awkwardly named VAD Remarketer Program was devised in late 2006 and officially launched in June 2007 to allow partners to determine the best growth path for their business. A Remarketer is a new class of Oracle reseller that has the ability to resell only the products that fall under Oracle’s 1-Click Ordering Programs and strictly under standard terms and conditions.

These resellers do not have to join Oracle PartnerNetwork (OPN) and pay annual OPN fees (US$ 1,995), but they are also not eligible for the OPN benefits. As another “rule of engagement,” the program is available only through Remarketer Authorized Value Added Distributors (VADs). In other words, Remarketers have to leverage an assigned VAD for all necessary support, training, and customer issues.

For more on the program’s details and premises, see TEC’s earlier article entitled “A "Gentler" Giant's Success in Reaching Out to the "Little Guys." The article was published in 2008 when the VAD Remarketer program was in its second year. While the period from June 2007 to July 2008 was dedicated to launch and incubation, the next 12 months were a period of growth. The program’s eligible products and adoption figures at the time (in terms of booked orders, recruited remarketers, and VADs) can be seen in TEC’s article entitled “The “Gentler” Giant’s Value Proposition to Overcome the “Little Guys’” Perception.”

Current State of Affairs

The Oracle VAD Remarketer program is nearing its third year, which is expected to be the year of cultivation. In fact, the current figures of over 1,200 recruited Remarketers and over 2,000 placed orders since the launch are not to be sneezed at. These 2,000 orders were likely opportunities taken away from Microsoft SQL Server (and/or Microsoft SharePoint), IBM DB2 (and/or IBM WebSphere Application Server), and many other equivalent free and open source software (FOSS) solutions.

On the other hand, it is important to note that before the VAD Remarketer program was in place, only full-fledged OPN partners (i.e., “certified” and “certified advantage” partners) were allowed to resell any Oracle product. For many potential regional partners it just wasn't worthwhile to pay the hefty OPN fee and go through the rigmarole of earning the required technical certifications.

The costs of getting certified would quite outweigh the profits from selling one or two typical Oracle software deals a year. For the VAD Remarketer program, therefore, Oracle has opened up the right types of baseline products that do not necessarily need all of the sophisticated skills that are required from a full-fledged OPN partner.

TEC recently received an update on the program. There are now 47 Remarketer VADs worldwide (6 in North America, 14 in Latin America, 20 in Europe, Middle East, and Africa [EMEA], and 7 in the Asia Pacific region), as compared to 29 in 2008. The program debuted in China in December 2008, while other Oracle staffers' blog posts showcase the recent resellers’ successes in  Austria and Spain.

Part 2 of this blog series will continue by analyzing the program’s current state of affairs. In the meantime, what are your views, comments, opinions, etc., about Oracle’s improved partnering approach, and about the VAD Remarketer program per se? If you are the program reseller and/or recipient, I would appreciate you sharing your experiences with the offering and the provider (i.e., the Remarketer and its VAD).
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