Oracle's 'Cover The Subs' Could Boost Channel Biz

The database powerhouse took another step toward mending its channel fences last week when it went public with a new program that would cut partners in on potentially lucrative business.

The "Cover the Subs" program promises to give dedicated Oracle partners entry into the company's biggest customer accounts. In a pilot program started in January, Oracle worked with select partners to win new business from the subsidiaries of its largest accounts, said Rauline Ochs, group vice president of North American channels for Oracle.

Oracle's top 239 strategic accounts are covered by the company's vaunted--and highly competitive--direct sales team. But those companies have 10,000 subsidiaries, 2,500 of which have buying authority, Ochs said.

The pilot garnered net new business in 150 of the "subs," amounting to $1 million in new software licenses from January to May, Ochs noted. The program is now open to the rest of Oracle's 2,500 North American partners.

Rich Niemiec, CEO of TUSC, a Chicago-based Oracle partner and pilot participant, said the program should forge better collaboration between Oracle's own sales team and partners. Oracle, from the highest levels, including President Charles Phillips, is telling its people to work with the channel, he said.

Dan Mori, vice president of Fusionstorm, was also pleased. The program "will hopefully foster improved relationships between the Oracle sales force and channel partners," he said. "And from that perspective, it's a good revenue opportunity for both Oracle and the partner."

But other partners say they've heard this all before. They maintain that the company's recently released rules of engagement rehash existing guidelines that were never enforced the first time out. One said the rules contain "loopholes big enough to drive a truck through."

Some partners say that when they bring new business to Oracle, the vendor finds a way to take even that business direct, paying the partner an "influencer" or referral fee that is tiny compared to what margin on the software sale would have been.

They also complain that Oracle's sales force is paid in a way that fosters such contention. Until Oracle's own compensation structure is changed so that its own sales reps make the same margin whether a sale goes direct or through partners, they maintain that no real change can occur.