Oracle Aims to Be the Apple of Data Center Hardware

Oracle's recent US$7.4 billion bid for Sun Microsystems could turn Sun's ailing hardware business into a boon for data-center managers. But industry analysts question whether the software firm can turn Sun's hardware platform back into gold.

Oracle has done well in past acquisitions, buying and quickly integrating large software companies such as BEA Systems, PeopleSoft, and Siebel Systems. But the purchase of Sun, and its large hardware business and SPARC processor platform, is a whole different beast, says George Weiss, VP of server and operating system trends at Gartner.

"The nature of this acquisition (for Oracle) is different than anything that has preceded it," Weiss says. "Oracle has to carve out an opportunity in a market where Sun was pretty vulnerable and threatened."

In statements posted online, Oracle argues that its planned purchase of Sun Microsystems will give IT managers better, more integrated enterprise appliances for the data center. But Weiss worries that the acquisition could leave Oracle facing the same quandary as Sun: Decreasing hardware revenues for a minority SPARC platform.

Sun's revenues for its servers and storage products have fallen quickly in the past year. In 2008, the company made $153 million less on its computer system and storage products as compared to the prior year.

And, in its most recent quarter, which ended on March 29, Sun's product revenue fell even further, down $434 million compared to the same quarter in 2008, according to its filings with the Securities and Exchange Commission.

Companies that compete against Sun's SPARC architecture question whether Oracle would be better served staying with the proprietary platform or increasing its adoption of Intel's Nehalem architecture. Intel announced the Xeon 5500, its first enterprise processor family which uses Nehalem, in March.

"Do they really need to stay on a SPARC-based system and what are the advantages of cost?" asks Jeff Hudgins, VP of marketing for NEI, which builds designs and builds enterprise products for other companies based on Intel's architecture. "Sun is leveraging a lot of x86 technology already. They have a Nehalem strategy as well."

When Oracle announced the acquisition on April 20, the company immediately tried to assuage the fears of Sun hardware users by committing itself to increasing its support of the SPARC processor architecture. "After the closing, Oracle plans to be the only company that can engineer an integrated system where all the pieces fit and work together so customers do not have to do it themselves," the company states in a FAQ posted on its Web site. "Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."

Oracle declined to comment on the acquisition beyond the statements posted on its Web site, but in a posted interview, Oracle CEO Larry Ellison likens his strategy to Apple's creation of the iPhone.

"If a company designs both hardware and software, it can build much better systems than if they only design the software," Ellison said in the interview. "That's why Apple's iPhone is so much better than Microsoft phones."

If Oracle can deliver on the promise, data-center managers would stand to benefit. And an Oracle-Sun combination could threaten giants such as IBM, says James Kobielus, senior analyst for data warehousing and advanced analytics at Forrester Research.

"IT managers will have a one-stop shop of hardware and and software needs in the data center, in terms of both the servers and the storage, the databases and the business intelligence," Kobielus says. "This is clearly a shot across the bow of IBM, who long offered one-stop shop advantages."

IBM declined to be interviewed for this article.

Creating well-tuned appliances for the data center will not be anything new for Oracle, Kobielus adds. The software company already does just that for its data warehousing product line.

"Oracle will be able to scale economies, which will give everyone else in this area a run for their money, which will lead to an era when data managers can get a cheap out-of-the-box experience," Kobielus says.

Author: Robert Lemos @ www.computerworld.com

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Sun shareholders look to block Oracle sale

Sun shareholders are fiercely resisting the company's projected sale to Oracle. In the last month. there have been three separate lawsuits attempting to stop the sale, according to a filing to the Securities and Exchange Commission from Sun.

The suits, filed in California, name Sun, some of its officials and Oracle as defendants. All three actions are aimed at blocking the US$7.4(£4.9) billion sale, alleging the price tag is "unfair and inadequate." They also allege "claims for breach of fiduciary duty against the individual defendants and for aiding and abetting a breach of fiduciary duty against the corporate defendants," the filing states. The defendants have yet to file answers to the complaints.

Sun also said in the filing that it may have broken the US Foreign Corrupt Practices Act during fiscal 2009. The law is meant to stop companies from bribing foreign officials. Sun said it has started an independent probe into suspect activities in a "certain foreign country" and "took remedial action," as well as made a voluntary disclosure to US authorities.

Meanwhile, Sun has decided to put the brakes on an effort to consolidate its database infrastructure into a single global ERP system.

Sun has "experienced a number of challenges" during the project that have affected operations, according to the filing.

"During the next six months, we have decided to delay the implementation of the remaining phases of the project while we evaluate alternatives," Sun said.
A Sun spokeswoman said the company "intends to respond appropriately to the lawsuits" but otherwise declined comment.

An Oracle spokeswoman declined to comment on the suits, but provided a statementsaying that Sun had disclosed its potential violations of the FCPA prior to the acquisition agreement.

Author: Chris Kanaracus, IDG news service

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Oracle upgrades BI offering

Oracle has launched Business Intelligence Applications Release 7.9.6, which includes improvements and integrations with other Oracle software, as well as a pair of new tools, Project Analytics and Loyalty Analytics.

The release adds a number of new human-resources dashboards, such as for talent management, recruiting and absenteeism. The vendor's procurement and spend-analytics BI module gets a number of updates, including a new employee-expenses dashboard and a "spend analyser."

In addition, Oracle has integrated its JD Edwards EnterpriseOne Financial Management application with its financial analytics BI software.

Meanwhile, the new Project Analytics module is aimed at governments, construction companies and services companies that want to analyse the costs of their projects. It includes a number of pre-built dashboards tuned for both private and public-sector organizations. Loyalty Analytics enables users to determine the success of marketing campaigns at both the customer and partner level.

Oracle's announcements reflect the fact that it's getting tougher for vendors to further evolve their underlying BI platform's capabilities, since the technologies have matured, according to Forrester Research analyst Boris Evelson.
"All the core functions have really been addressed," he said. "The real difference is in the applications."

The pre-built tooling in applications like Loyalty Analytics will likely have more appeal for smaller enterprises, which are interested in getting software up and running quickly or may not have a core competency in a particular area, Evelson said. A customer might say, "'We're a small bank, we know everything about banking, but not CRM. We're going to trust Oracle."

But large enterprises tend to shy away from such an approach, preferring to build out specialized BI applications themselves to gain a competitive advantage, he said. "There's no way anybody there is going to say, 'I'm going to trust Oracle to lead the way of how I should analyze my customers.'"

Meanwhile, the new project-analytics module could prove attractive to companies as the world attempts to emerge from an economic recession and government stimulus spending ramps up infrastructure projects and related activities.

There have always been plenty of choices for project portfolio management software, including the technology Oracle acquired last year by buying Primavera. But there is probably room in the market for advanced analytics that ride on top of such applications, Evelson said.

Author: Chris Kanaracus, IDG news service

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