Oracle, Sun Face Rocky Post-Merger Road Map
I'm not too thrilled with Oracle's go to market strategy as it relates to its new Sun plans.
Company co-CEO Charles Philips announced that Sun Oracle would go totally direct to large customers only. We are talking about 1,700 accounts globally.
Now that Oracle can build the entire stack for customers thanks to the 60 plus acquisitions they made in the last little while they can now offer a pre-packaged, pre-tested, reliable solution built on best of breed products from top to bottom. Oracle can also monitor this system stack for a customer ensuring security and plenty of other things. But, to do this Philips said they need to go direct and give customers a high-touch approach because of the level of complexity involved.
I understand Oracle's thought process here. Trust me I do. I do have a bias towards the channel. I think it is the right strategy for every company in the IT industry in the long term. If you look at Dell Computer; they turned to channel sales after 23 years of selling exclusively direct because they realized they would be unable to sustain the model.
Like I said I understand what Oracle's strategy is here and it sounds logical and may even work someday, but it is unnecessary. There are several solution providers in North America that can deploy, integrate and manage these large accounts. Also if Oracle has made these pre-packaged, pre-tested, ready to go reliable solutions basically plug and play then they can't be as complex to deploy, install or manage that only Oracle personally can do the job.
And, Philips shouted out to every sales professional in the world that Oracle was hiring to help them sell these new Sun Oracle solutions direct. Philips said the company needs 2,000 more sales people and is willing to pay them more money than any other vendor in the industry. This shout out only tells me that Philips is kind of in a desperate situation to make this direct strategy work from the get-go. Shouldn't Oracle have hired these people already and prepared them for this direct push?
Without a full-staffed sales team how long will it take Oracle to deliver these complete systems? Last time I checked customers don't like waiting.
Another area to ponder is where is all this money coming from? How competitive will Oracle be in the market place if they are paying huge dollars to Oracle's direct sales organization? What's going to be the pricing model going forward and will it make them competitive against IBM and the others? The one thing I know is by working with distributors and solution providers is that it saves vendors money deploying products.
This is another good reason why Oracle should have included partners in this play. Oracle could have dictated to the channel that they want X amount off of every product sold; they rest could be kept by the channel partner depending on how much a solution provider could sell it for.
I am encouraged by Oracle channel chief Judson Althoff comments. He told a worldwide audience that solution providers would be needed inside these direct sales to large customers especially if they have the expertise or a specialization. Hasn't that always been the case?
I like Oracle's overall product strategy with Sun, but I am disappointed by its direct only strategy to large accounts. Oracle started in business by selling direct and gradually over time embraced the channel to mutual success. I would hate to think they are reverting back now.
Two quick hits before I go. Legendary game developer Sid Meier is coming out of hiding to deliver a keynote address at the 2010 Game Developers Conference. The Sarnia, Ont.-born Meier has been creating games for more than 25 years and is best known for developing Civilization, a strategic turn-based game where the player has to build an empire that can withstand the test of time.
Montreal-based Tribal Nova has named Eric Brassard as its new CEO. He joined the company in 2008 as an executive vice president of marketing.