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By | Paul Kunert 29th June 2011 11:02

Oracle woos dealers with cash to stem sliding server sales

Forget about IBM and HP, Oracle loves you

Oracle is trying to stage a partner love-in by clarifying its policy on direct selling and setting in motion plans to pay resellers rebates for the first time in its history, but partners warn the devil will be in the implementation.

The US tech monster engendered channel disillusionment on the day it completed the purchase of Sun in January 2010 by talking up its direct sales credentials, the first sign of the fractious partnership resellers would have to endure.

In the subsequent 17 months, Sun haemorrhaged server market share as Oracle canned the rebates the dealers had accrued on hardware sales, made a hash of logistics and was branded arrogant and a weak communicator by many resellers.

The need for change finally dawned on Oracle and yesterday afternoon global channel boss Judson Althoff gave resellers and distributors a long overdue but welcome fillip to stem dealer defections to IBM or HP.

Reseller sources attending the briefing told El Reg of the Rules of Engagement the vendor is establishing under the Oracle Partner Network.

"Oracle will sell direct to its top 2,000 major accounts," said one Oracle dealer. "Outside of that it will pay distributors and resellers soft dollar margins for deals that are registered but only if they have support attached".

One major concern is that though the channel will lead implementation service delivery, "after the first year of three year support, Oracle will take the business direct and renewals will be only through Computacenter, SCC, 2e2 and Esteem."

The kick-backs will be fed into distribution – Avnet and Arrow in the UK – as is standard with other vendors, and they will negotiate terms with resellers' customers.

Additional rebates will be paid for strategic products. These will vary in focus every six months kicking off with Exadata and Exalogic, but only specialised certified partners will be authorised to sell these.

Another commitment from Oracle is that hardware and software deal registration will be honoured and strictly enforced, however the process has come under close scrutiny by channel players.

"The registration process is slow and crappy," said one Oracle house, "and many times when we've tried to register a deal it has been declined because an account manager at Oracle has input a blanket registration on a specific customer."

Despite the criticisms from sources that asked to remain anonymous, there was an outpouring of positive reactions from other services-based dealers.

Peter Spreadbury, director for enterprise partners at SCC, said: "Oracle is finally getting its act together as a combined hardware and software business and in terms of being more easy to work with.

"It's been a horrible time during the merger but it is getting better," he said.

The promise of additional margin is "very welcome" said BSI sales director Geoffrey Strage, "we are pleased that Oracle is rewarding expertise and specialisation".

Even the logistics issues that have dogged kit shipments since the integration of Sun seem to be improving, said Joe Connolly, CEO at Oracle Platinum partner Esteem Systems.

"Oracle accepted it had issues and took them head on. The problems were caused by the logistics partners and they put pressure on them and it has started to come through," he said.

Oracle refused to comment. ®

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