Oracle has its eye on capturing a share of the market for medium-size business, but before it gets there it must craft a channel strategy that takes cultivates its partners, VARs say.
Oracle has established a high-volume channel in conjunction with distributors Avnet Inc., Ingram Micro and Tech Data Corp., to create greater access to their entire product line as they try to capitalize on the market they previously have not tapped, said Judson Althoff, Oracle’s vice president of global platform and distribution alliances. Oracle will use the existing channels of Ingram Micro and Tech Data to offer their hardware and applications through several hundred VARs, he said.
But some VARs selling similar solutions in the midsize market said Oracle has a steep hill to climb winning over resellers in the field.
“VARs are tough. Cracking into their market is never easy,” said Jeff Baker, president of Development Resources, a Sedona, Ariz. consulting firm that advises VARs on their sales and business practices. “If they just want to sign up a bunch of VARs and ask them to sell Oracle, it’s not going to work. It all comes down to how well the engage the VARs.”
VARs, who may already be offering a solution in the market, will need reasons to switch to Oracle or add it as a solution, Baker said.
Heartland Technologies, of Joplin, Mo., an Ingram-affiliated VAR, would be hard pressed to pick up Oracle’s product line, said Jane Cage, Heartland’s president.
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“Sometimes it is possible to come too late to market,” Cage said. “Many people have already made decisions about their product line. We’re a Microsoft shop and we’re happy with Microsoft. It would take a lot to make us switch.”
Factors that could further discourage VARs, according to Baker, include a lack of technical training and support, weak sales and marketing support, and poor rebates and incentive programs. Working with distributors like Avnet, Ingram and Tech Data would mitigate those factors he said.
Althoff said Oracle is investing a huge amount of time, money and resources into making the program a success. “We didn’t go into this as a half-hearted attempt,” he said. “The reason we went through distributors is because they have established programs of support and relationships with these resellers.”
Oracle has made significant investments to midmarket development funds and incentives to help drive sales of the products, Althoff said. The terms can not be disclosed, he said.
Oracle’s channel through Avnet will be smaller and more focused than those through Ingram and Tech Data. Resellers will be nominated for the program based on their ability to commit resources, said Scott Abbott, Avnet’s vice president of Technology Solutions. “We’re asking them to make an investment in this, because we are making a huge investment in them.”
Scott Irwin, president of Aktion Associates Inc., a systems integrator and service provider based in Maumee, Ohio, said the quality of Oracle’s products have convinced him to add it to Aktion’s tool belt.
“I think everyone was taking a wait-and-see approach (when Oracle bought several companies earlier this year), but it’s been six months and it’s been nothing but positive news,” he said. “They have made a real commitment to the J.D. Edwards and we feel that is best solution out there for the midsize market.”
“If you want to get the M portion of the SMB,” he said, “this is how you do it.”