Oracle Eyes HP VARs In Partner Recruiting Blitz

The recruitment blitz comes with Oracle investing more than it ever has in targeting the broad small medium business market in the wake of the recent launch of the Oracle Database Appliance, the first Oracle integrated hardware-software offering built from the ground up to drive sales through Oracle channel partners.

"We are absolutely going to go into our competitor's base because we think there are some fairly effective partners out there that are looking for new technologies to sell," said Judson Althoff, senior vice president of worldwide alliances and channel sales for Oracle in a press briefing on the opening day of Oracle's massive OpenWorld conference Sunday afternoon in San Francisco. "We think our competition from a product standpoint really hasn't innovated that much." He said Oracle is going to go after the "the very best in the industry and some of those are going to be competitive wins."

Althoff singled out HP pointing to the damaging effect that HP's plans to spin off its PC business could have on HP's server business which is under attack from the Oracle Database Appliance. "A lot of the leverage of that (HP Server product line) comes from the economies of scale afforded by the PC base," he said. "If they are out of that business, the ability to innovate and provide cost effective products in the blade space is going to be challenged. It is going to be hindered. With a product like the Database Appliance we simply have a better offering. It is more innovative."

Althoff also pointed to the dramatic fall in HP's market capitalization in the wake of the software and services strategy charted by former HP CEO Leo Apotheker, who was fired last month.

NEXT: Partners: HP Will Face Challenges Competing Against Oracle Paul Vallee, founder and executive chairman of Pythian, a fast growing Oracle partner headquartered in Ottawa, Ontario, said vendors like HP will have a hard time competing against the Oracle Database Appliance. That's because the product is fully integrated and tested making Oracle database installations, upgrades and migrations seamless, said Vallee.

The Appliance marks the first time that Pythian, a long time Oracle software solution provider, is selling an integrated hardware software offering based on Oracle's Sun hardware. Vallee expects the Oracle Database Appliance to allow him to double his business in one year from a $20 million run rate business to a $40 million business.

Vallee expects hardware to account for as much of 15-20 percent of his sales with the Oracle Database Appliance. "This is brand new for us," he said. "Oracle Database Appliance and the new channel strategy have opened the door to a new relationship with Oracle for us."

Oracle's decision to not buy a large services company as rival Hewlett Packard did with EDS also makes Oracle a more compelling partner than HP, said Vallee. "HP buying EDS dramatically reduces my appetite for partnering with HP," he said. "Oracle has some services. But they are not making it the primary driving vision of how they are going to double their company (size)."

The Oracle partner recruitment effort comes on top of record gains in Oracle's partner numbers. Oracle OpenWorld this year attracted some 4,500 partner registrants, up from 2,100 last year, said Althoff. "This is the largest Oracle Partner Forum in history by a long shot," he said. The partner forum participation is ten times larger than just four years ago.

NEXT: Oracle Sees Large Gains In Partner Numbers Not only that, but Oracle's indirect channel sales growth over the last three years has charted higher than sales gains from the Oracle direct sales effort, said Jeff Barteld, senior director of channel operations and strategy. He said more than 40 percent of Oracle's worldwide sales and 80 percent of Oracle worldwide transactions now go through partners.

Barteld said the channel gains have come with Oracle drawing a line in the sand with the direct sales force focused on the top 2,000 accounts, leaving the broad small medium business market to Oracle partners. "That is a pretty important change," he said. "You need to drink that in and think about what that means to your business."

A major theme of Oracle OpenWorld is getting partners to sell integrated, pre-engineered Oracle hardware - software solutions. Oracle estimates that it has 380,000 customers with as many as 300,000 not running Oracle hardware. But as many as 30 percent of the partner base depending on the geography now sell integrated Oracle hardware-software solutions, said Althoff.

James Menon, a strategic business development executive for Serac Technologies, a Gold certified Oracle partner, said he sees more Oracle customers looking at moving to Sun hardware. Serac's integrated Sun hardware-software sales pipeline has doubled in the last year, he said. "The midmarket to upper tier customers see the value in it," he said.

The key to the integrated Oracle hardware-software solution sale is making sure customers understand the "value of having pre-packaged, pre-built" solutions, said Menon. "It's a lot simpler when customers know it is going to work out of the box," he said.

Piscataway, N.J.-based solution provider Bluenog is making plans to begin reselling Oracle's Exalogic Elastic Cloud Server, which combines Sun hardware with Oracle middleware. That product fits well with Bluenog's emphasis on service and systems integration work, said Sales Director Daniel DeVenio.

Ted Bereswill, senior vice president of North America Alliances and Channels for Oracle, said there simply has not been a better time to partner with the company. "I have been running the North American channel for a little over three years and I have never seen this level of excitement from our channel partners or from our (top) executives," he said. "Our executives are very keen on what is going on in the channel and it wasn't necessarily always that way."

Additional Reporting By Rick Whiting