Oracle portals target SMB clients in Europe

Oracle Corp. is turning to the Web in an effort to sell more of its products to small and medium-size businesses (SMBs) in Europe.

The company has rolled out Web portals for 17 European countries where SMBs can search for and buy products from Oracle and its ISV (independent software vendor) partners, the company announced Wednesday. It defines SMBs as companies with fewer than 500 employees.

The move follows what Oracle called a successful three-month pilot project in France, Germany and the U.K. More than 5,000 SMBs enrolled at the portals in those countries, Oracle said, although it declined to say how much revenue they have generated.

The portals are intended to make it easier for SMBs to find software they might want to use from Oracle and its partners. Oracle was quick to emphasize that it is not selling directly to smaller businesses — a practice that has traditionally irked the channel partners of many large vendors.

Most of the products listed are from Oracle’s partners, and when customers do select an Oracle product, Oracle passes the sales lead to a local reseller, according to Tim Payne, vice president of technology marketing for Oracle EMEA.

“Our strategy is to service the (SMB) market 100 percent indirect,” he said.

Still, the portals do contain a link to Oracle’s online store where customers could buy Oracle products directly if they chose to, he acknowledged. And they allow Oracle to collect considerable information from those who register, including contact details and areas of product interest.

The portal efforts are a logical step if Oracle wants to exploit the “uncharted opportunities” presented by SMBs in Europe, said Joe Warner, deputy editor with IT Europa Ltd., a research company that specializes in European IT channels.

“Despite protestations from rivals, Oracle continues to push its indirect channel strategy across Europe, and last year, for the first time, more than 50 percent of EMEA licence sales were generated through partners,” Warner wrote in an e-mail response to questions.

“In addition to attracting new clients, the extension of the Oracle SMB Network is likely to aid the vendor’s partner recruitment drive. Partners are crucial if Oracle — and rival enterprise software vendors — are to make an impact among SMBs, where a direct strategy is too protracted and expensive,” he wrote.

About 1,000 ISVs have enrolled with the portal program so far, out of a total of about 4,750 ISV partners in Europe, the Middle East and Africa, Oracle said.

The portals are available in only five languages — English, German, French, Italian and Spanish — but list information about local ISVs in each of the 17 countries, Payne said. Most European customers speak one of those five languages, according to Oracle.

The countries targeted are Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, the Netherlands, Norway, Poland, Sweden, Spain, Switzerland and the U.K..

Oracle is working on a site for Russia, which will be live in about 30 days, Payne said.

In addition to the search engine, an updated CD of all Oracle-related products will be sent out each quarter. The company is also offering free online business courses to entice customers to enroll.

The company has spent “million of euros” on advertising to market the program across Europe, Payne said. Oracle positioned it as a way to help ISVs increase their business, as well as just a way to sell more of its own products.

“Most SMBs want to buy packaged solutions” that include multiple products, he said. Services are expected to be provided by the ISVs, local VARs (value-added resellers) and other channel partners, he said.

It marks Oracle’s latest effort to generate more business from the SMB market, where it has not traditionally been a strong player. With the downturn in technology spending at the start of this decade, Oracle, SAP AG, IBM Corp. and many other vendors that sold primarily to enterprises began targeting SMBs as a way to generate new revenue. Many, including Oracle, rolled out versions of their core products tailored and priced for smaller companies.

Oracle has said it hopes to steal smaller customers from Microsoft Corp. in particular.

To succeed, Oracle has to overcome a perception that it’s purely an enterprise vendor and offer products and prices suited to SMBs, said Alastair Edwards, senior analyst with Canalys, a research firm in Reading, England, focussed on IT channels.

“Oracle is addressing both of these issues, although the portal is principally a marketing tool. It has to be backed up by an ISV/systems integrator channel that really can support Oracle-based applications,” he said.

Oracle also needs a distribution channel that can recruit and train second-tier value-added resellers and ISVs that have access to smaller businesses, Edwards said. In the short term, “I think SMB will really mean ‘M’ and not ‘S’,” he said.

Separately, Microsoft announced on Wednesday that it is stepping up its own efforts to attract medium-size business customers, with the promise of new products and a renewed commitment to them.

Businesses can access the Oracle SMB Network at this Web site.

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