Here’s a timely piece of irony: Some channel pundits worry Oracle will increasingly compete with VARs. Yet Oracle CEO Larry Ellison (pictured) says the company has no plans to push deeper into the IT services market, essentially guaranteeing that Oracle won’t expand its IT consulting division. So, the old question: Is Oracle a friend or foe to partners? Here’s some timely insight from The VAR Guy.

Let’s start with Larry Ellison’s views. During Oracle OpenWorld, Ellison told analysts Oracle was open to acquiring semiconductor companies. But according to MarketWatch, Ellison essentially dismissed any chance that Oracle would acquire an IT services firm, stating: “I think it’d be very difficult, I think culturally it’s very difficult” to make such deals work for Oracle, Ellison said.

Competing or Cooperating?

So, a reality check: Oracle has taken some hits for taking roughly 4,000 Sun accounts direct. In some cases, legacy Sun partners may have legitimate gripes about new competition from Oracle’s sales force.

But on the flip side…

  • What were Sun partners planning to do if Sun remained independent? Had Oracle not acquired Sun, The VAR Guy suspects Sun partner revenues would have dried up entirely.
  • Oracle has not really grown its IT consulting business in recent years, a spokesperson told The VAR Guy about a month ago.
  • Ellison now says there are no plans to push deeper into IT consulting through M&A.
  • Rivals like IBM (Global Services), HP (EDS) and Dell (Perot) continue to expand their IT services businesses through organic growth and/or acquisitions.

Generally speaking, IBM and HP are perceived to be channel-friendly companies. While Oracle takes some lumps because its direct sales force is so darn aggressive. The VAR Guy certainly isn’t apologizing for Oracle… the company has rubbed partners the wrong way from time to time.

Still, Ellison’s views on IT services and IT consulting are quite interesting, especially at a time when rivals are making M&A moves that could potentially trigger channel conflict. And if you poke around often enough, you’ll find channel partners who are gaining sales leads from Oracle sales reps. One prime example involves Cloud Creek Systems, which is winning deals by working closely with Oracle.

Is Oracle channel-perfect? The VAR Guy doubts it. But should partners pay attention to Oracle’s lack of IT services moves? Absolutely.

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