Global CIO: Oracle Needs More Than Ellison's Talk To Beat IBM's SystemsGlobal CIO: Oracle Needs More Than Ellison's Talk To Beat IBM's Systems

"We think the Exadata business is going to be huge—by huge, billions of dollars a year in new systems sales, not including the maintenance on those businesses. Now how long it takes us to get there remains to be seen but our overall view of the computer industry is we have been selling components to large customers and the customers have been hiring systems integrators to glue those components into complete systems.

"Our overall strategy right now going forward is not to sell those individual industry-standard components on their own but rather group them together into machines like Exadata, where we have processors, networking, storage, storage software, database software, our Oracle Enterprise Linux operating system—all as a complete database machine for both transaction processing and data warehousing. We think that makes it much easier for the customer—they don't have to buy all the individual parts and glue them together—but instead they buy the boxes: a high-margin product for us and a high-value purchase for them because they don't have to spend a lot of money on systems integration.

"We think that's the way customers are gonna go forward as they build their data centers: not buying components but buying systems like Exadata. And one of the big reasons we bought Sun is that we want to apply that same strategy to middleware, to applications, to the operating system itself: we're not gonna sell operating systems just for an individual computer, but we're gonna sell the next generation of Solaris that's gonna be a Cloud Edition of Solaris, where it manages a group, a cloud, a cluster of these computers that we sell together as a unit.

"That's highly differentiated: high-margin for us, and no systems integration for the customer. How big is that business? We think that's what the computer business is gonna look like for the largest customers going forward, so we think that's billions and billions of dollars. That is our business in the future."

But while that might be Oracle's business in the future, IBM has inferred with its recent counterpunches, there's a big difference between plans for the future and on-the-ground execution. As my colleague Paul McDougall wrote recently in his coverage of IBM's Power7 announcement, "[IBM Power Systems general manager Ross Mauri] said Sun hardware under Oracle would be no more competitive than Sun on its own and no match for Power7 when it comes to running ERP systems and other business software."

More than that talk, though, is IBM's current roster of optimized systems: real, proven, and in production environments. And this list, in comparison to Oracle's lone Exadata optimized system, says it all about why Ellison and Oracle will need a whole lot more than talk if they expect to compete in a meaningful way against IBM, the once and current king of the systems business: WebSphere DataPower Appliances, WebSphere CloudBurst Appliance, IBM CloudBurst (Computing Infrastructure in a Box), Tivoli Foundation Appliances, ISS Proventia Server Intrusion Prevention System, IBM Smart Analytics System, Informix BladeCenter Cluster, Cognos Now!, IBM SmartCube (IBM SmartBusiness Software Pack), and Lotus Foundations.

Your move, Larry.

RECOMMENDED READING: Global CIO: Oracle's Ellison Challenges IBM, NetApp, And—Well—Everyone Global CIO: IBM Calls Out Oracle's Ellison On Database Claims Global CIO: Oracle CEO Larry Ellison On The Future Of IT Global CIO: Hewlett-Packard And Oracle Layoffs Are Ugly But Essential Global CIO: Oracle-Sun Biggest Challenge Isn't Technology—It's People Global CIO: Oracle CEO Larry Ellison's Top 10 Reasons For Buying Sun Global CIO: Hewlett-Packard Recruits Microsoft To Raid Sun's Customers Global CIO: Oracle's Incredible Profit Machine: 22% Maintenance Fees Bob Evans is senior VP and director of information's Global CIO unit.

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