Oracle Expands Partner Cloud Opportunities, Steps Up Rebate Incentives

Oracle is allowing qualified channel partners to directly sell its cloud services, giving solution providers a new option beyond the "referral sell" they have been limited to before now.

Oracle is also offering new "back-end" rebates for selling specific products and services that encourage partners to sell software and storage systems with Oracle servers. And, the company is renewing for fiscal 2014 other rebates it began offering last year designed to boost channel sales of specific Oracle products and services.

While those changes to the Oracle Partner Network program are being announced during the company's annual OPN Kickoff Tuesday, channel partners say other changes may be underway, including rules that inhibit the company's direct sales force from locking up customer accounts early in the fiscal year.

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Under the existing cloud referral program any registered OPN partner can earn a commission by bringing in new customers for Oracle's cloud services. So far more than 100 partners have generated some 500 active deals under that initiative, said Jeff Porter, Oracle director of product channel sales, in an interview.

Partners can develop a range of services around Oracle's cloud applications once they become certified or "specialized" in such areas as fixed-scope cloud implementation best practices.

Until now, however, Oracle handled the actual sale of cloud services, including managing all subscription billing to the customer. Under the new option Oracle will offer discounted cloud software subscriptions to partners that can resell them to their customers and handle the billing, subscription renewals, upgrades, change management and other chores -- owning all aspects of the customer relationship.

To qualify, partners must be ranked OPN Gold or higher, be specialized in the cloud service they are reselling and demonstrate their ability to deliver a fixed-scope implementation of the cloud service, Porter said.

On the sales incentives, last year Oracle began offering rebates for partners that sell support contracts attached to product sales, partners that sell "strategic" hardware products and partners that register deals for sales into what Oracle calls the "broad market," or customers Oracle doesn't list as named accounts.

In addition to continuing those rebates in fiscal 2014, which began June 1, Oracle is now offering rebates when partners sell Oracle servers combined with Oracle storage systems, as well as rebates when partners "add to the stack" by selling Oracle hardware or software to a customer who bought other Oracle products within the same quarter, according to Porter.

"We think these are fairly unique offerings out there in the market," Porter said. "We want to create more incentives for partners, and the best way to do that is to make it more profitable."

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Several channel partners said they are hearing of other changes within Oracle's channel operations, both in management and in organizational processes.

"I know there's a lot happening behind the scenes," said one partner who asked not to be identified. "They tell me there's a lot of reorganization going on," he said, referring to people he knows within the company.

One partner, who also asked not to be identified, said he was told by his partner account manager that Oracle is making changes to its sales processes that will make it tougher for direct sales representatives to claim potential customers ahead of partners. In the past, the partner said, sales reps would call a prospect and then "pipe it" as their opportunity, effectively blocking partners from registering deals with that customer prospect.

Now, the partner executive said, direct sales reps "have to justify that opportunity at the same level of granularity as the partner." That, combined with changes being made to sales territories, "are making it harder and harder for an Oracle rep to block partners out of their territories," the partner said. "It makes it highly beneficial for them to work with partners in their territory."

Overall, the partner said, "there's a significant, long-term, positive strategy [at Oracle] in leveraging the channel."

Judson Althoff, who had been Oracle's highly visible worldwide channel chief, left in March to lead Microsoft's sales and marketing efforts in North America. Oracle has not formally announced a replacement for Althoff, and one channel partner said his understanding is that Althoff's duties are being divided up among other channel executives.

Oracle's Porter confirmed that the company has been expanding support by direct sales for partners and OPN programs. But, he and Joel Borellis, Oracle group vice president of partner enablement, declined to comment on the channel partners' specific statements.

Oracle has some 25,000 partners worldwide, and about 5,000 of those have garnered one or more specialization designations, Borellis said. Oracle has awarded some 30,000 specializations, with many partners having multiple specializations, and partners altogether have 100,000 individuals certified to implement Oracle products, he said.

PUBLISHED JUNE 25, 2013