What Oracle Wants

By Paul Rubens (Send Email)
Posted May 12, 2009

Paul Rubens
Talking to Reuters last week, Oracle CEO Larry Ellison outlined his plans for the hardware side of Sun's business. They come down to making a SPARC Solaris equivalent of Oracle's Database Machine, which is built on HP hardware, Intel processors and Linux. OS Roundup: It's official: Oracle has Apple envy. And Cisco envy. And when it grows up, it wants to be just like IBM.

The motivation for this is that there will be higher margins to be made from selling such a machine. "While most hardware businesses are low-margin, companies like Apple and Cisco enjoy very high margins because they do a good job of designing their hardware and software to work together," he said.

So Oracle wants to build the database server equivalent of Apple Macintosh machines, controlling everything from hardware (Intel aside) to operating system to application software so it can enjoy higher margins, right?

Enterprise Unix Roundup

Well, not quite. Ellison does want Oracle to be more like Apple but not like its computers. Instead of worshiping the Mac, it's Apple's premier gadget Ellison admires. "If a company designs both hardware and software, it can build much better systems than if they only design the software. That's why Apple's iPhone is so much better than Microsoft phones," says Ellison.

While a data center filled with super-powerful iPhones running the latest Oracle app downloaded from iTunes is an amusing vision of the future, it's not quite what Ellison has in mind. He plans to increase investment in SPARC — which he says are more energy-efficient than Intel chips — and architect them so they will run Oracle software "better."

"Some system features work much better if they are implemented in silicon rather than software," he explains. "Once we own Sun, we'll be able to plan and synchronize new features from silicon to software, just like IBM and the other big system suppliers. We want to work with Fujitsu to design advanced features into the SPARC microprocessor aimed at improving Oracle database performance. In my opinion, this will enable SPARC Solaris open-system mainframes and servers to challenge IBM's dominance in the data center."

One question this raises is what happens to the existing hardware/software appliances that use Linux to run Oracle software on Intel chips? Customers like ready-to-run appliances that are fast and low cost, but Larry likes the sound of higher margin (read: "more expensive") higher performance products based on SPARC Solaris. There's nothing wrong with offering customers a choice, but it would hardly be surprising if Oracle were to concentrate its efforts on the higher-margin SPARC Solaris based offerings with features that have been synchronized "from (Oracle-owned) silicon to (Oracle owned) software" rather than anything running on Linux and Intel.

That's not to say that Oracle's (Red Hat compatible) Enterprise Linux will be disappearing any time soon: Linux remains important for Oracle. Just as it does for IBM, the company Oracle looks determined to resemble. Curiously, the common factor in Oracle's and IBM's Linux strategies is Red Hat. With a market capitalization of $3.3 billion the company looks overvalued at the moment, but as the industry consolidates you can't help wondering how long the world's leading enterprise Linux company will remain independent.

Paul Rubens is an IT consultant and journalist based in Marlow on Thames, England. He has been programming, tinkering and generally sitting in front of computer screens since his first encounter with a DEC PDP-11 in 1979.

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