Itanium Dump Could Cost Oracle BillionsItanium Dump Could Cost Oracle Billions

Given all this evidence, it's pretty clear what's really behind Oracle's decision to dump Itanium. In the enterprise market, the database-application suite pairing drives the hardware decision, and since Oracle is still far and away the market leader in database-plus-ERP software, it has decided to try to leverage that position to boost its flagging Sun business.

In other words, moving forward, customers that want to run enterprise-class installations of Oracle software will have to do so on Oracle's enterprise-class hardware. I'm not suggesting that Oracle will end support for smaller, one-off installations of its software on x86 platforms, but for the top line, zero-latency stuff for banks, big manufacturers, research institutions, and other demanding environments, it's going to be Oracle-on-Oracle.

Oracle hasn't made any specific announcements to this effect (other than its public diss of Itanium), but the writing is on the wall. What other high-end platforms are there?

You can run Oracle on an IBM AIX/Power7 architecture, but given the open hostility between Ellison and Big Blue and their intense competition in databases, it wouldn't be surprising if AIX is the next platform Oracle will stop supporting. There's still Dell, of course, but Dell's Oracle platform, based on Intel Xeon, doesn't go beyond the x86 world. That's not enough for many big-time customers.

The bottom line is that Oracle is heading toward becoming a propriety systems vendor, confident that CIOs will cast aside their aversion to single-suppler lock-in in order to continue running Oracle’s most advanced software stack.

It's a risky bet—one that could end up costing Oracle billions in future revenues from license sales and support. Forcing current Oracle-on-HP Itanium customers to spend what could be millions of dollars to port their entrenched business apps to the Solaris/Sparc architecture won't sit well with most of them.

CIOs of multibillion-dollar companies aren't used to being told what to do by vendors. And given the time, energy, and hassle involved, many would view the transition as an opportunity to consider a brand new setup, like, say, replacing Oracle PeopleSoft ERP with SAP paired with IBM's DB2 database and AIX operating system on Power7 hardware. They could also turn to the cloud, and leave the integration headaches to SaaS vendors like Salesforce.

On the other hand, Ellison doesn’t have much choice but to take his best shot. He loaded up on $7.4 billion worth of Sun chip fabs, assembly lines, research facilities, design centers, mouse pads, and coffee cups—now he's got to move that big iron, somehow.