Early last year, Oracle Corp. took over Sun Microsystems Inc., and the $7 billion purchase took on an ominous tone.
Usually when a business is taken over, the new leaders use strategies to smoothly move forward. This didn’t happen with Oracle. The company quickly canceled the rebate program for its federal partners – this program allowed Sun a means of earning extra points after a sale.
“Oracle killed all back-end rebates in the federal space, zip, which was significant to the [resellers’] overall profitability,” Alan Bechara, president of PC Mall Gov, a value-added reseller (VAR), told Washington Technology. He did though note that he understood it was “purely a business decision.”
Claiming that “hardware sales involve more installation and testing costs than software,” channel partners feel the loss of Sun’s incentive-based rebate program will put them at an unfair advantage.
Hopefully, Oracle and its sales partners will come to a solution that will benefit all involved.