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Oracle wants to be a low-cost provider of core data centre equipment

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January 22, 2015

Oracle has pledged publicly yesterday that it wants to be a low-cost provider of core data centre equipment, and is ready to work hard to get there.

Oracle chairman Larry Ellison announced a refresh of the company's Engineered Systems range. The division is now called X5, and represents a new strategy to offer the industry's lowest purchase prices, according to Ellison.

His rationale for a lower-price strategy is that his company has come to realize that not everyone wants high-performance equipment like its previous range of high-end engineered systems, simply because while it may be fine servers and networking gear, it still comes with high price tags.

Oracle has long argued that price/performance analyses see it come out on top. But Ellison said he is “tired of having that argument” and has come to realize that low-cost, two-socket servers have come to rule the data centre core.

To be sure, Oracle wants in to that market and wants to beat Cisco and a few more at their games. And the way it thinks it can beat its competition is with lower prices.

Ellison popped up a Powerpoint slide to illustrate his company's new pricing model for converged systems, and claimed that it represents Oracle's list price and rivals' discounted prices.

Ellison thinks that Oracle can be cheaper to acquire and operate up and down the stack and that businesses will build their core systems on commodity but highly-integrated equipment.

Oracle once lacked the commodity side of the business but is right in that game now, adding that things like application templates Ellison said will allow enterprise apps to be spun up in minutes rather than hours.

The company also enhanced its stable of so-called thoroughbreds. Announced yesterday were a new Virtual Compute Appliance, Database Appliance, Exadata Database Machine and Big Data Appliance, all with the kind of enhancements one would expect of refreshed products.

The Zero Data Loss Recovery Appliance has had a more interesting refresh, gaining the ability to restore data with the use of database logs even if it hasn't yet had time to do a full or incremental backup.

Then there's also a new FS-1 all-flash SAN array said to be very fast. Ellison's presentation was low key and marred by a wireless remote control that intermittently failed to control his slides, while the monitors facing him were so hard to see he instead turned to read product details from the big screens facing the audience.

That those issues hit while he was talking about lower-priced equipment made for unfortunate juxtapositions, nevertheless.

Comment Oracle has given itself an interesting sales job with yesterday's announcement, because for several years it has told the IT industry that dedicated appliances are the best way to run a business.

But Larry Ellison conceded in his presentation that the market isn't buying that story anymore, but is buying Cisco gear and allied converged infrastructure players' products.

Instead, Oracle is now moving itself into a market that others have already defined, but says that its approach to integrated systems makes it a better alternative.

But that experience and the approach it has used seems not enough these days because Ellison made 'low cost' the central theme of his presentation.

And that adds up to a whole new nest of overlapping and occasionally contradictory arguments.

It will be interesting to see if the company's new lower-cost hardware strategy will work over the next two to three quarters. We'll keep you in the loop.

Source: Oracle.

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