by Carly Lombardo
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The Oracle Small Business Suite has come a long way from its original roots as NetLedger, an online accounting package that was sold for a $4.95-a-month subscription.
With price changes and the addition of new features and functions, the Oracle suite can now command an end-user price as high as $10,000, enough to justify the VAR program established in April, says Jim LaBelle, vice president of marketing for NetLedger, whose technology lies behind the system.
"Our program is ahead of other channel programs because it gives the VAR annuity and a stream of income. Not to mention that it is the first complete system to run from selling to implementing, including accounting, payroll, and creating a Web site," says LaBelle. So far, 50 resellers have signed up, and LaBelle hopes to have 100 VARs selling the suite by year-end.
Pricing is a long way from that $4.95 monthly fee. A single-user version is priced at $1,200 per year, and $600 per year for each additional user. The included storage is a 5MB-per-user File Cabinet. The Enterprise Edition has a $3,000 per month subscription for unlimited users. A company's accountant receives free access.
NetLedger has always been close to Oracle. Larry Ellison, Oracle's CEO, holds a personal 55 percent stake in NetLedger. Last summer, NetLedger and Oracle entered into a marketing and product-development alliance aimed at giving NetLedger more credibility with customers. NetLedger's core product was renamed Oracle Small Business Suite, and the two companies share revenue from its sale. In fact, NetLedger, which had 3,000 users by last summer, added another 1,700 in three weeks after renaming the product.
The suite (www.oraclesmallbusiness.com ) is an integrated application design to help small businesses manage all business processes including accounting and finance, sales and service, Web design, and employee management.
Firms that wish to be considered as resellers need to target small to mid-sized companies. They must also have at least one year of experience in sales and implementation of software products, and provide two client references.
Those accepted as VARs receive two free accounts for demonstration purposes or internal use. Resellers also receive a free Certified Consultant membership. Margins begin at 30 percent. The program has a membership fee of $1,500 per year.
"This program is the perfect complement to our direct-selling efforts, as many small to mid-sized companies prefer to work with a local expert to help them implement and customize our solution locally to meet their specific needs," says LaBelle. "It gives the VAR the opportunity to sell a complete hosted solution and also drive significant post-sale consulting revenue through implementation, training, customization, and support."
Dedicated reseller sales and support staff are available to assist resellers, who also receive access to private online support, including sales and marketing tools such as direct marketing templates, sales presentations, demonstration scripts, and PowerPoint presentations.
In addition, the program offers co-marketing funds that are accrued at five percent of all revenue generated by the reseller in selling the suite. "Resellers can use this fund they create to execute marketing activities to promote their expertise in the suite to their target market," says LaBelle.
VARs also receive educational benefits. Resellers have access to sales and technical training materials. The initial sales training is free and can be performed face-to-face or via telephone. An account manager will work with the reseller to help position the firm for selling to the customer base.
There is also two days of implementation training for $2,500. In addition, NetLedger provides free monthly training, which covers topics such as automating the sales force or customer support. Resellers are also offered quarterly regional workshops and conference calls.
"These give us a chance to train our partners on new features, discuss new program aspects and opportunities, and provide a forum for feedback from our partners so we can continue to meet their needs," adds LaBelle.
Finally, there is a free two-day partner conference designed to "give the partners an overview of where we are heading from a product and company standpoint."
Icing on the Cake
Detroit, Mich.-based AappTech, a consulting group that specializes in business process improvement and e-enabling solutions for small businesses, has signed up 20 companies as Oracle users in the last year.
The majority of the companies were enrolled while AappTech, an affiliate of the CPA firm Mathews Reich Perna & Rottermond, was part of the Certified Consultant Program. "Now that we are part of the Value-Added Reseller Program, we anticipate double-digit growth. Our pipeline is already filling up with larger, more sophisticated prospects," says managing partner Mike Galloway.
Prior to the relationship with Oracle, AappTech was a Solomon VAR. Because most clients had revenue of less than $20 million annually, the company decided mid-market products were overkill for that user base.
"About half of our clients do not have a controller or controller-type employed," says Galloway. "Without this position, we found it very difficult to implement Solomon due to the number of set-up and policy decisions required to effectively implement the solution."
So the company dropped Solomon and decided to go 100 percent with Oracle's consulting program a year ago. Galloway likes the company's subsequent entry into the reseller market.
"The VAR program is attractive because it allows us to take control of our clients’ purchasing process and provides us with additional sales tools and training materials to assist in building our practice around a hosted solution," says Galloway.
A typical engagement can range from $2,000 to $40,000 depending on the features of the suite that are utilized, and lasts between two and twelve weeks. While the company has clients in many industries, Galloway says the majority are light manufacturing/distribution or service companies. In fact, the firm was honored in April for having the most clients of any channel partner involved with the suite.
Galloway feels the VAR margins are significant and notes they are on the number of installations. "What we found to be very attractive about the margin program is it becomes a residual income stream for our firm. Once the suite is sold, you can continue to earn margin throughout the life of the account. The other attractive part is the number of installations is cumulative, allowing my margin level to increase each year as opposed to being reset based upon my previous year sales," adds Galloway.