Partner accuses Oracle of pinching £24k deal

Vendor claims there was a misunderstanding over unregistered server deal

A reseller has spoken out against Oracle after claiming the vendor nabbed a £24,000 server deal from under its nose.

Tunbridge Wells-based Interhost has vowed never to work with Oracle again after the deal for a SPARC T4-1 server it took to the vendor ended up going direct.

Interhost owner Michael Herman brought the epsiode to the attention of ChannelWeb after his attempts to elicit compensation or an apology from the vendor failed.

For its part, Oracle points out that the deal was not registered and has claimed there was a misunderstanding over the customer's identity.

The end user, a global connectivity firm, first approached Interhost at the end of April to supply it with server equipment for an Amsterdam datacentre.

The complexity of the deal prompted Interhost to contact Oracle. Herman said he reluctantly disclosed the end user's details during this conversation with an Oracle sales rep in Dublin.

In May, the end user told Herman it was not pursuing the opportunity. Suspecting the worst, he phoned the Oracle sales rep using a withheld number, and duped him into divulging he was dealing with the end user directly.

Although there is no suggestion that it was the sales rep who contacted the end user, rather than vice versa, Herman said the deal should never have been taken direct. He also hit out at management for siding with the sales rep following an internal investigation.

"We have been cut out of the deal, and their only line of defence is that we should have registered the deal," he said. "I entirely agree that we should have. But call me old school – if I tell a vendor this is my client and we are the reseller, that for me is enough.

"We feel aggrieved, but the important thing here is to make other resellers aware that if you give Oracle a big enough opportunity, they may not pay you."

According to Herman, the value of the deal, which included the SPARC server and related peripherals, was €30,402 (£24,098).

Oracle was unable to comment on the story at the time of publication, but a string of emails between Herman and Tim Birch, sales leader of Oracle's Managed Partners Team, sheds some light on the vendor's line of defence.

Birch writes that, in parallel to Interhost's enquiry, the sales rep received an inbound call from the customer asking for pricing. According to Birch, he proceeded with the deal not knowing it was the very same as Interhosts's "as you [Interhost] did not release the end-user details to him".

Herman emailed back to stress that he had in fact released the end-user details, adding that he could prove this because his firm records all calls. The email string ends with Birch asking whether or not Interhost registered the deal, and questioning what Oracle could do if not. "Ultimately, how a customer decides to procure, as well as engage with us, is up to them," Birch wrote.

Herman said the episode was particularly disappointing given his perception that Oracle was "redressing its links with the channel".

"The whole point of the channel is so that vendors do not have end users calling them up and giving them hassle," he said. "You cannot just jump in and grab the nice ones."

A connectivity and cloud specialist, Interhost only fulfils hardware sales if the customer requests it and is only an occassional Oracle partner.

Alastair Kitching, cheif operating officer at top Oracle partner Esteem Systems, said he could understand how the mix up came about.

"Every deal we get with Oracle, we register and then they know we are aligned to it," he said. "If you are a smaller partner that does not understand Oracle's deal registration system, you could possibly come unstuck.

"That said, you have to question why Oracle would be doing business with someone directly if it is outside their largest enterprise accounts."