As it kicks off Oracle OpenWorld 2010 next week, Oracle has a lot to prove as a hardware vendor.
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As they converge on the big San Francisco event -- it drew more than 40,000 people last year -- data center pros will look for signs that Oracle is really serious about its new Sun Microsystems server franchise.
No one disputes Oracle's clout in software. It leads the league in databases, some types of middleware and shares the top spot -- with SAP -- in enterprise applications. But data center pros say the company's early moves in hardware leave a lot to be desired.
They point to nagging uncertainties about how serious Oracle really is about improving and growing the Sparc microprocessor franchise and Oracle's long-term commitment to the server business where it competes with frenemies Hewlett-Packard Inc., Dell and IBM.
The former CEO of a big data center provider said Oracle wants into the hardware business because it sees servers as receptacles for its ever-growing software stack. "I think they'll give away the hardware to sell more software," he noted.
Meanwhile, sales of Sun's bread-and-butter servers are in decline although the start of that falloff pre-dated Oracle's buyout of Sun last January.
"When I got into the data center business in the '90s, I'd say 70 to 75% of the hardware was Sun and then it just fell off, almost overnight." He attributed that to the rise of Linux as a credible data center operating system and faster, more powerful Intel processors. "It just didn't make sense anymore to pay 3 times for Sun when you could get high-availability, reliability cheaper."
Now, Oracle CEO Larry Ellison seems intent on delivering a series of gigantic "iPods" for the data center, a trail blazed by the first two Exadata machines, the first an HP-built box optimized for data warehousing and a second Sun box with added facility for online transaction processing. Many Oracle shops expect the company to outline new Sparc-based Exadata machines, including the promised "VM machine" at Oracle OpenWorld. Thus far, the Exadatas are Intel boxes running Oracle Linux and other Oracle software.
The Hurd factor
Oracle's hiring of ex HP CEO Mark Hurd as co-president definitely has tongues wagging, and IT pros are split on his impact.
"I think Hurd could help Oracle's credibility in hardware, but then again we've seen other people come in and try to change that culture and fail," said one long-time Oracle shop in Northern California.
This executive said it's been a bear to get specific Sun-related information out of Oracle, but next week he expects to hear about Sparc-based Exadata plans. He and others are still smarting from price hikes to Sun hardware support imposed by Oracle with little warning. Hurd would probably know better than to spring such major price hikes on data center customers, he said.
Pete Sclafani, CIO and co-founder of 6connect, a data center specialist in the San Francisco area, thinks Hurd could make his presence felt at Oracle.
"I would have agreed that Oracle would have trouble executing as a hardware player in the data center, but I think Mark Hurd joining will have a significant impact …. He has great insight into the space given [that] he's been executing HP's vision of the unified data center for some time now. I think the big question is even if Mark has some keen insights on tackling the data center, who at Oracle will listen and who will be able to execute?"
On the other hand, others hold out very little hope for Oracle hardware efforts with or without Hurd.
"Personally, I think they should close up the hardware side. They've lost so much momentum in the industry that I think they'll be hard-pressed to revive that business. It's such a shame because Sun had some of the best hardware in the market," said Jason Sparks, vice president of storage and systems at Xiologix, an IT solution provider in Beaverton, Wash.
Sparks and others confirmed the exodus of data centers from Sparc-based to x86 hardware and said that Oracle's opacity on Sun hardware plans hasn't stemmed the flow. Customers aren't sure if Sun hardware will really be around for long, or if it is, it'll be bundled only with Oracle software -- a combination that many see as just too expensive.
A lawsuit HP filed against Hurd and Oracle could impact Hurd's new Oracle role at least temporarily. (It is unclear whether Hurd will speak at the show next week, for example. He had been slated to keynote months ago when he was still HP CEO.)
Oracle's Sun hardware conundrum
Oracle is in a tough position either way. It may be inclined to minimize hardware, but it also has to justify the $7.4 billion it paid for Sun. And it has to deal with those remaining die-hard Sun hardware shops and, perhaps, sell them more Oracle software.
Still, its efforts there have been heavy-handed.
Steve Gunderson, principal at Transitional Data Services, a company that specializes in helping companies move their data centers, said customers need to be wary.
"TDS has been directly involved with customers that have paid hundreds of thousands of dollars of additional costs due to changes in the practices at Sun since the Oracle acquisition. These charges are related to how Sun/Oracle charges customers for re-certification/re-qualification of Sun equipment. Our recommendation is that before any company purchases hardware from any vendor that they should request a copy of the re-qualification/re-certification policy and factor those potential costs into their hardware purchase decisions," Gunderson said via email.
An IT manager at a large defense contractor is moving 800 core servers from Sun to IBM Power 7 or Cisco servers. Hardware evaluations were under way before Oracle bought Sun, but he said the primary motivating factor for the move was the Oracle-mandated policy change, which jacked up hardware support costs.
Another defense contractor spent more than $200,000 two years ago for Sun hardware to run a Sun VDI implementation that never worked properly. Recently, the IT lead on that project simply unplugged it after struggling to get it running right. The straw that broke the camel's back? "Our support contracts went up 2 times over night, without notice, and we didn't have that in our budget," he said.