Oracle doesn’t have the best reputation for working with partners. It has the same reputation with its customers, too.
Mark Hurd, the company’s co-president, recognizes this shortcoming, and how it affects direct and indirect sales. He’s making easy of doing business between Oracle and customers a priority, believing a turnaround will stimulate net growth.
Hurd’s ultimate goal is to convert customers from gripers to promoters, active advocates of Oracle’s products and services. It’s a big goal, as Oracle’s marketplace reputation is more of a bully than an enabler. The history of Oracle is a company built on a force of will by Larry Ellison, who basically dictated how companies would use his software rather than collaborating on development and implementation.
With partners, Oracle has an on-again off-again reputation. When Oracle bought Sun Microsystems, CEO Ellison openly derided the channel, saying that he would take the acquired hardware business direct. The result was an exodus of loyal Sun partners to competitors. While Oracle partners praise the company’s software products, they often complain about the challenges of working with the market leader.
Oracle’s channel was recently dealt a challenge by the defection of channel chief Judson Althoff, who left the company to take a job to run North America sales and marketing at Microsoft. Althoff is the latest in a string of seasoned channel leaders to have left the company in the past several years.
In the market, Oracle is facing some interesting challenges. While it’s software business – particularly in cloud management and enterprise applications – continues to grow. However, its hardware business, particularly in high-performance SPARC-based servers, continues to fall. Despite the sliding sales and competitive challenges, Oracle is recommitting its hardware business.
Part of what’s holding back Oracle, Hurd says, is salespeople – mostly direct – do not understand how their customers consume products. They think of their engagements as product sales only rather than the creation of systems that produce a net-benefit for the customer. He wants Oracle’s sales force – which is growing – to better understand the interconnectedness of different products and how they add value.
If this sounds familiar, it should. It was a common mantra of attached sales that Hurd expounded during his time at Hewlett-Packard. When he held the CEO post there, he hammered away at solution providers in the PartnerOne program to lead and sell HP first and always. The entire notion was to increase average deal yield with a lower cost of sales.
Oracle has potential to leverage this attached-sales mantra to expand sales with existing and known accounts. What Hurd seems to be pointing to, though, is the need to capture net-new business, particularly in competitive spaces where it runs up against rivals SAP and Microsoft. By improving customer experience, he wants customers to become lead generators.
The remaining question: Where will these opportunities go if Hurd is successful in making Oracle easier to do business with? Customers as net promoters will benefit Oracle partners, as they will create market opportunities by recommendations and word-of-mouth endorsements. Oracle is also expanding its direct sales force, which could also be the principle beneficiary of this reformation.