VAD Remarketer Program Nets Oracle 250 New Resellers

VAD Remarketer Program Nets Oracle 250 New Resellers

Oracle has enlisted 26 distributors and more than 250 new resellers for the VAD Remarketer program it inaugurated six months ago in an effort to expand sales of its database and middleware products to SMB customers.

The software giant also said its "1-Click Ordering" system, launched at the same time as the VAD initiative, is succeeding in providing distributors and VARs with a simplified product ordering process. Altogether about 1,000 orders with an average value of $5,000 have gone through the system since it launched, said Judson Althoff, vice president of global platform and distribution sales and head of Oracle's technology channel program office. "That's exactly what we were targeting," Althoff said in an interview.

Oracle, Redwood Shores, Calif., started the VAD Remarketer and 1-Click-Ordering programs to create an easy way for solution providers to make small-volume purchases of Oracle software for resale. Oracle management had concluded such a change was needed to effectively compete against Microsoft (NSDQ:MSFT) for sales to small and midsize businesses. "We're penetrating a market we really hadn't targeted before," Althoff said.

To resell Oracle software before the VAD Remarketer and 1-Click-Ordering initiatives, solution providers had to join the Oracle PartnerNetwork -" and pay a $1,995 annual fee -" and sign lots of sales and legal contracts.

"It became cost-prohibitive for us because we weren't selling enough software to make it worthwhile," said Paul Stearns, president and owner of Advanced Consulting Enterprises, a Miami Lakes, Fla.-based solution provider, which had a reseller relationship with Oracle in the 1990s before the vendor began charging the program fee.

The VAD Remarketer program allows resellers to buy Oracle software through participating distributors without having any contractual relationship with Oracle. The automated 1-Click-Ordering system allows distributors and resellers to easily place small-volume orders for Oracle products for delivery to customers either electronically or on CDs. The two programs include the Standard Edition and Standard Edition One versions of Oracle's database and application software and its business intelligence package.

Stearns found out about the VAD Remarketer program while preparing a quote for a client that had been told the Oracle software component of a new medical billing system would cost $30,000. After talking to Tech Data, Stearns learned that he could buy through the distributor a Standard Edition One version of the Oracle product, which better met the client's needs, for less than $2,500. He was particularly impressed by the level of knowledge the Tech Data people had about the Oracle products in helping him find the best solution for his customer.

"You just go out and order what you want and you're done," he said, contrasting the process with the complexity of dealing directly with Oracle.

In addition to signing up mainstream distributors such as Tech Data (NSDQ:TECD) and Ingram Micro (NYSE:IM) for the programs, Oracle has signed up regional distributors around the world such as Officer Distribuidora in Brazil and Nexsys de Columbia. Many of the distributors have used the VAD Remarketer program to expand their own Oracle-related practices. "We also offer Oracle-specific technical support, marketing, recruiting and training programs. The Remarketer program is integrated into our existing Oracle business at Ingram Micro," said Jodi Honore, the distributor's VP of vendor management, in a statement.

Althoff said the 250 new resellers either have never had a relationship with Oracle or, as with Advanced Consulting Enterprises, were once partners but dropped out when working with the vendor became too costly and complex. While he said the new resellers might only make three, four or five purchases a year, "these are deals we want to be Oracle deals, not Microsoft deals or deals with other competitors."

Althoff had no specific goals for how many distributors and resellers would ultimately participate in the programs. "I think we're going to see some pretty exponential growth over the next 12 to 18 months," he said.