Oracle-Sun Ends HDS Storage Agreement,
Oracle and storage vendor Hitachi Data Systems are
ending the long-term reseller agreement HDS originally had with Sun in a move
that could cause customer confusion but will probably mean channel
opportunities.
The dissolution of the storage agreement between Oracle and HDS, the latest fallout from Oracle's acquisition in January of Sun, is
also seen as the latest sign that vendor consolidation into a small number of
companies looking to control their hardware and software stacks is continuing.
HDS told its solution providers via an e-mail that the
reseller agreement it signed with Sun nine years ago will end on March 31.
In the e-mail, a copy of which was reviewed by CRN.com,
HDS wrote that, with Oracle's acquisition of Sun Microsystems, HDS and Oracle
agree the time is right for the relationship to evolve.
"We are jointly determining the positioning of the
products and solutions based on Hitachi Data Systems that you have deployed
with clients. We understand you and your customers have questions and concerns
surrounding service obligations to the global install base moving
forward," HDS wrote.
HDS also said it will provide "solid transition
programs" to its partners to ensure its storage solutions continue to be
available to partners and their customers under the Hitachi Data Systems brand
name.
"A new chapter is here, and Hitachi Data Systems
sees great opportunities for you that will materialize in the market," HDS
wrote.
Solution providers agree that the split means
opportunities for them.
When Greg Knieriemen, Vice President, Marketing, Chi, a
US-based solution provider and HDS partner, first heard the news, his first
concern was that Oracle-Sun customers receive continued support from the
storage vendor.
"But this is also an opportunity, a golden
opportunity, for HDS partners like Chi to go in and service Sun-HDS
customers," Knieriemen said. "We'll be looking to take some business
from Sun partners."
The abrupt nature of the break and the fact that HDS
and not Oracle broke the news first are two interesting questions partners
have, Knieriemen said. "Even if HDS broke the agreement off, you'd think
Oracle would be scrambling to get in front of the news," he said.
John Varel, CEO, FusionStorm, a US-based solution
provider and partner to Oracle, Sun, and Hewlett-Packard, which OEMs the same
HDS products that Sun resells, said the Oracle-HDS break is one of the things
that make this an exciting time to be in the channel.
"This means nothing but opportunity for partners
with broad offerings," Varel said. "If a customer is upset with
Sun-Oracle, we'll give them HP."
Varel said he is surprised the break didn't happen
sooner.
"It was inevitable," he said. "It's a
part of the consolidation in this industry. We're seeing a splitting of the
righteous teaming of vendors as everybody wants to control everything. Look at
HP and EDS, at Oracle and Sun, at Dell and Perot. It's a changing world, and
it's disruptive."
Yet while the industry consolidates towards a handful
of vendors trying to offer the complete hardware-software-services stack, Varel
said it is easy to forget that customers still have alternatives, and that
savvy solution providers still have the upper hand.
"We're holding higher margins on our product sales
now than ever before because we bring customers broad solutions," he said.
"Customers will go with the group, the manufacturers and solution
providers combined, that provides them with the best ROI. We don't sit around
asking customers, how much hardware did you buy last year? They don't
care."
Knieriemen also sees the Oracle-HDS split as another
part of the on-going vendor consolidation push.
"As you listen to (Oracle CEO) Larry Ellison lay
out his vision of the future, it's based on a complete Oracle-Sun
software-hardware stack," he said. "So this shouldn't be a shock.
This is the tone Oracle is setting. They want a vertical stack, where everything
is theirs."
The impact of the break is lessened because of the fact
that the Hitachi product has been available from Hitachi's direct and indirect
sales teams, from Sun under the reseller agreement, and from HP under an OEM
agreement, said Dave Cerniglia, President, Consiliant Technologies, a US-based
solution provider and storage partner with Hitachi and Sun.
"No matter whether customers buy it from Hitachi,
Sun, or HP, they are buying the Hitachi name and reliability," Cerniglia
said. "Customers who bought through Sun did so for convenience. They got
volume discounts, or bundled the storage with servers. The Hitachi sales force
looked at Sun as a value-added reseller."
In fact, Cerniglia said, there will probably be little
impact in the part of the storage market HDS relies on the most: the
enterprise.
"Hitachi still has a direct sales force, and a
channel," he said. "And they are dealing in the enterprise where
competition is much less than in the midrange. There are really only three
enterprise storage players: EMC, IBM, and Hitachi."
Here is the text of the March 2 e-mail from HDS to its
solution provider partners:
Dear Valued Partner,
Due to the recent acquisition of Sun Microsystems by
Oracle Corporation, there has been much speculation as to the effect the merger
will have on the market, product offerings and partnerships. As you are aware,
Hitachi Data Systems and Sun Microsystems have enjoyed a successful business
partnership. On March 31, 2010, the current distribution agreement that Hitachi
Data Systems and Sun Microsystems have been jointly operating under for the
past nine years will come to an end.
This relationship has given our partners access to
industry-leading storage solutions built on Hitachi technology on which many of
the world's top enterprises have come to rely. With the acquisition of Sun
Microsystems, Hitachi Data Systems and Oracle agree that the time is right to
evolve this relationship into one reflecting the priorities of the new company.
We are jointly determining the positioning of the products and solutions based
on Hitachi Data Systems that you have deployed with clients. We understand you
and your customers have questions and concerns surrounding service obligations
to the global install base moving forward.
Hitachi Data Systems will be answering all questions
and concerns with solid transition programs and will focus on meeting the
demands of the continued excitement in the marketplace around the Hitachi Data
Systems technology and the unique leading edge solutions that the Hitachi Data
Systems brand has, and will continue to bring to market. These solutions will
continue to be made available to you and your customers under the Hitachi Data
Systems brand name.
Details will be forthcoming on programs and processes
that will help guide you and your customers, as we transition this business
moving forward. A new chapter is here, and Hitachi Data Systems sees great
opportunities for you that will materialize in the market. Protecting,
developing and growing your business is our top priority.
Neither HDS nor Oracle were able to respond in time to
questions about this story. However, a source close to Oracle said that the two
companies were still negotiating their agreement.
By Joseph F
Kovar, ChannelWeb, March 03, 2010, 1130 hrs
Synergetics IT services is a brand of Context Business
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