More questions than answers, but Oracle-Sun will shake up channel

The dust has hardly settled on news of Oracle’s US$7.4 billion pursuit of Sun Microsystems, but that won’t stop the channel pondering the potential implications that this mega-deal has for resellers in the region

Tags: Oracle CorporationSun Microsystems IncorporationUnited Arab Emirates
  • E-Mail
By  Andrew Seymour Published  April 25, 2009

The dust has hardly settled on news of Oracle’s US$7.4 billion pursuit of Sun Microsystems, but that won’t stop the channel pondering the potential implications that this mega-deal has for resellers in the region.

“The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems,” declared Oracle’s CEO Larry Ellison in a statement detailing the plan last week.

Competitors aside, few would disagree with that assertion, especially as the upshots for the market would likely have been very different had IBM got its hands on Sun as it attempted to do less than a month earlier.

As far as major technology tie-ups go, and there have been a few in recent years, Oracle and Sun ranks among the most significant that the market has ever seen.

It is still way too early to read into how Oracle intends on managing its latest catch, arguably the most ambitious purchase of its 30-year history. But aside from the obvious technology decisions that it will have to make in the coming months, the biggest challenge it has to tackle is its policy for addressing the channel.

Consider the fact that the pair collectively oversee a global partner ecosystem that is estimated to span more than 30,000 companies — including a not insubstantial chunk in the Middle East — and it’s obvious that clear and coherent communication with partners will need to form a major facet of the combined outfit’s thinking from day one.

Although the acquisition remains subject to the usual obligatory approvals, senior sources in the channel already insist that the emerging channel strategy of these two industry heavyweights could have a huge impact on how successfully the merger ultimately proves to be.

Take into account that Oracle expects the Sun business to be more profitable in terms of per share contribution in the first year of operation than it intended for the acquisitions of BEA, PeopleSoft and Siebel put together and you can see why getting the channel in order has to feature near the top of its agenda.

For now, partners can only speculate on what the deal is likely to mean for their business and the channel community in general. But the moment the agreement has received the final green light, resellers will expect immediate direction.

Those enthused by the merger already see potential value in what it could offer them. Oracle partners are talking up the benefits of access to an integrated system from applications to disk, and the possibilities around Solaris and Java, while Sun VARs are greeting the prospect of getting deeper into enterprise environments that may have evaded them in the past.

Partners will seek clarification to more questions than those that are simply technology-based, however.

The channel will want to know how Oracle and Sun plan to exploit their key assets to the advantage of the channel. How will the deal open new doors into commercial customers? What incentives are there for Sun partners to invest in Oracle specialisations and vice versa? How will they be measured and compensated?

These are all areas that Oracle and Sun executives must be ready to address straight away because there will be plenty of competitors waiting to pounce if t disenchanted partners are spotted lurking in the channel.

For me, one of the most compelling aspects is going to be the extent of realignment that takes place in the channel. There is a natural overlap of Sun and Oracle partners anyway, but whether they can be integrated under a single umbrella — or whether they remain tied to independent programmes with disparate incentives — looks set to be a question that needs to be carefully thought out.

Both vendors have worked hard to develop partner programmes that aim to encourage profitability and skills investment — but which are fundamentally different in detail. How to get the best out of those programmes going forward is poised to be a task for the channel teams of both companies.

The most plausible scenario — at least initially — is that Oracle and Sun will go the route of EMC and RSA, which have promoted cross-selling opportunities among partners but largely maintained autonomous channel programmes and channel personnel.

Whatever the outcome, life in the enterprise channel looks set for a shake-up after last week’s announcement. Oracle and Sun partners must now just watch and wait.

Andrew Seymour is the editor of Channel Middle East English.

2983 days ago
Raed Omari

Really its astonished step by Oracle. The Internal Process and Culture within Hardware manufacturer companies (ie Sun) in comparison with a Software Company as Oracle is too much wide and different. The issues expected to rise is not with channels but also in Oracle operations. Will they sustain the tough competition with Big players like HP, IBM. Will they sustain the contineous deveplopment needed for CPUs/HW gears to compete. This is really lots of questions need answer and only future will answer.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code