back to article Oracle puts the squeeze on Sun channel

Oracle has come out with a firm message regarding Sun’s sales strategy: it will change. In 2008, a flailing Sun announced it would service its top 300 accounts directly and push the rest to the channel. We thought it was a terrible idea at the time, and at analyst conferences, we questioned company management about it. The …

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IT Angle

Confused?

If, after reading this article, you feel a bit confused as to what's going on with Sun and channel sales, then it has accurately described the situation.

Unfortunately, it seems as though Sun very well may concede any "low end" sales to Dell/HP/IBM. AMD seems to have a rather bleak future in Sun's product line-up. (Despite their 7000 series storage being based upon it.) There really is no unambiguous x86 product strategy (beyond the March and April release of the new Nehalem based products.) The Fujitsu alliance is... interesting to say the least. It would be much more settling if Oracle would release SOMETHING definitive WRT what's going to happen rather than just marketing speak - and then stick to that plan.

Oh, and somewhat unsurprisingly, several channel based support and engineering groups got the axe late last week. :( It came as a bit of a surprise as Larry hadn't said anything negative about the channel until the NYT article when he verbally crucified it. Now it seems he's literally crucified it.

I really think Larry wants to see every Sun box with Oracle on it. For those of us who don't put Oracle on Sun boxes, I think this could be trouble.

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Growing the sales force?

"This new Sun sales force isn’t just going to be bigger by 2,000 folks; it will be more specialized, with dedicated server reps, tape reps, and storage reps. When it comes to servers, most multi-line channel partners are happy to install whatever box makes for the easiest sale to the customer. They typically won’t make a stand on a particular brand unless they don’t have a choice… like when another partner is selling against them with the same hardware, for example."

I wonder if Oracle has thought this out.

Hardware is a commodity product with low margins.

You don't need an army to sell it, it will only force higher prices to cover the rep's salaries.

In perspective, 2,000 isn't a large number for a WW sales force.

But still, creating specialized reps may not be the best fit. Just ask IBM...

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Boffin

"Sales specialists".....

As Snoreacle is only employing 2000 "sales specialists", that implies there will have to be generic account manager salesbods probably managing a number of accounts each, and then an overlay of sales specilaists called in by the account managers (or pushed in by management) whenever they suspect an opportunity is there and waiting. Now, ignoring how Oracle is also going to have to find and train all the basic account managers to replace the old frontline of resellers, here's how an average salesperson's brain works; "commission........." - and that's about it!

What he (or she) wants is a technical bod along to do presales work to help them as usually presales aren't paid in commission, so they don't threaten the salesbod's chance of making a decent wage, but presales can talk to other techies that usually won't open up to a salesbod, and can sniff out many opportunities the average salesbod might miss. They also build relationships (as a techie, I'd rather talk to another techie so I know what's being sold to me is actually being accurately described by someone not just out to make a target). Sales specialists are almost mongrels - supposedly skilled technically and in also experienced in sales techniques. Many I have met have been weak on the technical side because they were recruited by salespeople and more for their sales skills. The real problem is sales specialists are usually paid on commission, not a basic, and that commission is taken out of the account manager's chunk when the sale goes through. Presales are valuable but expensive for a vendor as they still have to be paid a good basic even when they're not being used, but the account manager doesn't mind as it usually doesn't impact his commission.

So how does Mr Average Salesbod react when he gets a "sales specialist" parachuted into his account? Badly! Because he sees the sales specialist as someone that is going to take a chunk of his commission, or worse show management that there were sales in the account but Mr Average Salesbod wasn't good enough to find them by himself. They never seem to realise that the sales specialist might actually increase commission overall by selling more product. I have seen this behaviour from reps from just about every major vendor, they all guard their account contacts jealously and resist any attempt to open up and let another salebod in there. I have even had a sales rep tell blatent lies about our company and who were the "influencers" in a deliberate attempt to minimise the success of a sales specialist!

This behaviour is not unique to Sun or Oracle, it just seems to be the way things are. I've seen both IBM and hp go through cycles of trying sales specialists and then dropping the idea, only to ressurect it again a few years down the line. I suspect that unless Larry is very careful with the commission setup, they may see a lot of underutilised sales specialists and many missed opportunities.

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Pint

re; Growing the sales force?

This isn't your fathers Dell or HP. Oracle will actually be selling product that differentiate. When you have a product that provides differentiation you actually need someone to explain the value to the customer. You also need someone to manage the relationship. Leave the whitebox sales to Dell and HP - they make a lot of money out of selling others technology, but they are limited in their margins. This is why Dell and HP constantly have to squeeze margin out of their people by shipping them off to India or Brazil.

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FAIL

Reading skills are very poor these days

Oracle has stated that they will hire an ADDITIONAL 2000 sales reps. There will

not only be 2000 sales folks.

Also, Larry stated that he does not want to compete in the commodity X86 market where Dell and HP live. IBM does not live in that market either, they sold that off a long time ago. Larry loves x86 and is differentiating on top of it. Of course the pieces that make up that differentiation will also be available for sale, but he wants to concentrate on the entire stack, not just the pieces like HP and Dell.

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Stop

Eeeeek

I'm afraid that Oracle is going to destroy the Java programming language, like a blind mastadon in the China shop. They've already nuked the daylights out of the original java-dot-sun-dot-com web site, re-branding it as if Java was just some sterile by-product of the Oracle company. It's not, today - not yet - nor did it develop as such.

The vitality in the Java community has been a real, driving force in the now widely developed popularity of the Java programming language, throughout its existence. Oracle's style, as represented (I say, pretty clearly) in their recent sterilizations of Sun's Java web site, will ultimately estrange the Java developer community, thus hampering the progress of further development in the Java programming language. We all loose, by that approach - or the Oracle excs win, if only by thinking as if they'd successfully assimilated a market technology.

I hate to say it, but it looks like they're about to take Java down from the inside, and I'm not sure if they have consciously intended to.

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I don't think so

Do you have ANY idea how many Oracle customers are using mature Java applications? It is a LOT. These are big money customers and Oracle is going to do everything possible to keep them happy and writing out those yearly checks, which means that they MUST keep Java out in front of .NET and every other competing app platform.

Why don't you just COUNT the number of JAR files that are in your Oracle install. Java is the lifeblood of Oracle. They bought Sun precisely so that they could have control over its destiny.

And besides, your fear-mongering about Java is just as wrong as the same crap about mySQL. It is free software and it will take care of itself.

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Inccorect statement on 2000 sales reps

Actually what Larry said is Oracle is adding 2000 sales and support people, but he didn't state what the ratio of sales and support people would. The website states they are hiring sales consultants and sales representatives specializing in servers and storage. In addition they are looking for chip designers, hardware engineers and software developers.

Check it out: http://www.oracle.com/corporate/employment/index.html

So the numbers will probably go beyond 2000 in the end.

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@ Matt Bryant

Matty.... obviously never been in Sales...........

Sales Specialists who are overlay are really overlay i.e. they don't get paid instead of the Sales folks, that would be commercial suicide. They are paid to , well, be specilaist in their particular area, good Sales Specialists can bridge both technical and commercial implications, as you mention HP and IBM I can see you have never had experiance of a good Sales Specialist (and no I'm not from Sun or Oracle)........

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