Eye on Oracle

Apr 23 2008   9:08AM GMT

Oracle’s challenges in the channel

Shayna Garlick Shayna Garlick Profile: Shayna Garlick

Oracle yesterday added 33 new applications to Oracle Accelerate, its partner program, bringing the total number of available solutions to 123. Accelerate allows Oracle to work with its partners to develop applications for small and medium-sized businesses.

So how does Oracle’s partner program measure up to rival SAP?

Warren Wilson, research director at Ovum, compares similar referral programs recently launched by each company. According to Wilson, while SAP’s goal is building long-lasting relationships with its channel partners, Oracle has its eye on mainly one thing: money.

“Oracle’s lead message is the money,” he said, although he couldn’t determine which company’s method (focus on money vs. relationships) is more effective.

Technology Business Research, Inc. (TBR) said recently that it sees channel management as Oracle’s greatest challenge. They say that Oracle “intends to drive 50% of license revenue through partners; however, it still relies on its direct sales team to drive most of the revenue, and the indirect channel only contributes 44 % of new license revenue.”

Another partner-related problem they see is a shift in management, with the recent departure of several key Oracle executives managing alliances and the channel.

TBR concludes by saying that in order to reach their target of 50 % partner-generated software license revenue, “Oracle would need to shift nearly $550 million from direct sales to indirect channels to balance the contribution percentages.” TBR believes the challenge is made more difficult as Oracle attempts to restart growth in software license sales in the current difficult [financial] climate.

What do you think — will Oracle be able to change things around? Or are its partnerships fine as is? Do you think there are actually bigger (and more important) challenges?

1  Comment on this Post

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  • Colin Steele
    Oracle's channel problems were the topic of our recent podcast: https://searchitchannel.techtarget.com/news/article/0,289142,sid96_gci1307475,00.html. It will be interesting to see if/how the Accelerate program and the new channel chiefs change things.
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