Oracle to take 4,000 Sun accounts direct

Oracle will unpick the hard work delivered by Sun Microsystems channel partners over the past decade after confirming plans to take 4,000 of the largest customers direct.

Ellison, Larry 2004 b.jpgOracle will unpick the hard work delivered by Sun Microsystems channel partners over the past decade after confirming plans to take 4,000 of the largest customers direct.

At the same time, the new owners of Sun also talked of moving to a build-to-order model to cut costs, closing a distribution centre in the US and one in Europe and significantly rationalising the server portfolio.

Larry Ellisson, CEO at Oracle, said in a six hour conference call, "We are going to take the top 4,000 Sun customers and sell to them directly."

The Sun strategy "had shifted its strategy over the last decade to go a lot more indirect through partners," said Oracle president Charles Phillips.

In fact Sun is estimated to have just 200 direct accounts and had relied more on partners as it had cut its own sales staff in recent years.

"Our model is for our largest, most strategic customers that are making huge investments with us, they deserve to have a direct relationship with us. That's what they want. We need to understand their business better. We need to be on-site," he added.

Phillips confirmed it will also promote technology services to 1,700 Sun customers instead of relying on third party providers. He added that it planned to hire 2,000 sales professionals as soon as possible.

Some partners voiced concerns last year about Oracle's inconsistent channel policy when it emerged as the likely suitor to Sun.

Geoffrey Strage, sales director at BSI - Sun Reseller of the Year for 2009 - said the development was disappointing.

"We are not happy about reports of Oracle taking resellers out of the channel but in practical terms we think it will be in the US first and will take a year to percolate through to the UK," he told MicroScope.

It will prove difficult for Oracle to find staff to match the 20 years experience that many in the Sun channel had built up, he added.

The response from Mike Norris, chief executive at Sun's biggest UK partner Computacenter was less critical.

"It is crucial that there is a direct relationship between major vendors and their major end-user customers, whether that means it's exclusively direct or whether that means procurement is direct is another matter," he said.

"If I worried about every major announcement made by a vendor I'd have leapt from the top of our Blackfriars building in London by now," he added.

Peter Spreadbury, director of enterprise at SCC, was also somewhat political, "We are a top level partner for Sun and Oracle and on that basis we expect our business to be consistent and strong during this period."

Other changes unveiled by Oracle include significantly chopping down Sun's 60-strong server portfolio.

John Fowler, executive vice president of the systems business, said its portfolio would become more targeted.

"We'll focus the product set on the best intersection with those enterprise needs, as opposed to offering every size, model and version of servers," he said.

This rationalisation will also hit the x86 range where Sun has failed to make a dramatic dent in the market shares of volume rivals since launching years ago.

"We're not too interested in the commodity Windows x86 market, we'll let Dell do that," added Fowler.

The old guard of resellers may not lose sleep over this but distributors, in particular Interface Solutions worked hard to develop a new breed of volume orientated partner.

John Taylor, Sun business unit director at Interface Solutions, said it had recruited 88 partners for the vendor.

"Sun is still focused on x86, it is not getting rid of them but its not interested in single servers to run single applications and to be fair we've not done an awful lot of that. The vast majority of our revenues have come from products and services in clustered environments," said Taylor.

Another manoeuvre distributors may find interesting is that Oracle plan to close two distribution centres in the US and Europe to cut costs in logistics and shelf space and provide a build-to-order service.

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