News

Oracle in the Enterprise: We're Going to Compete on Price

• By John K. Waters
• January 22, 2015

Oracle chairman Larry Ellison unveiled the fifth generation of its engineered systems this week, along with a new aggressive pricing strategy.

He promised that the newly renamed X5 line of database appliances will not only be the fastest on the market, but the cheapest -- about half the price of comparable products sold by Cisco Systems, EMC, and others.

"We've never really competed for the data-center core," Ellison said. "Now we have a new strategy."

Since introducing a line of "engineered systems," which integrate hardware, software, and online services (industry analysts call them "converged systems"), the company's strategy has been to deliver "extreme performance," Ellison said. The purchase price of those systems may have been higher than the competition, the company argued, but they ran so fast that customers saved money in the long run through better "cost performance."

"We're tired of having that argument," Ellison told analysts and media on Wednesday. "Our strategy [now] is to deliver, not only the highest performance, but the lowest price for the data center core...We didn't invent that idea, but we think we can do a better job."

Ellison talked about the growing popularity of systems built around lower-priced, 2-socket x86 servers -- systems such as VCE vBlock, which combines EMC storage with Cisco UCS servers and Nexus network switches. He admitted that these "do-it-yourself data centers" represent a serious trend, and allowed that Cisco and EMC have been "very successful," but vowed to "aggressively compete with that 2-socket core of your data center."

With this move, Oracle is taking the price tag part of the discussion off the table, said Tony Baer, principal analyst at Ovum, who was on hand at Oracle headquarters for the announcement.

"More to the point," he told ADTmag, "as database storage expands, transaction loads expand, and everything gets big, in general that will favor more commodity pricing as the dominant model, because the traditional model will not be affordable."

The new pricing strategy followed the announcement of several new products, including:

• Oracle Virtual Compute Appliance X5: This is the "complete converged infrastructure system" the company pairs with its FS1 Series Flash Storage System. It includes 27 2-socket servers and 2 Oracle Virtual Network connections. List price: $562,000 -- which Ellison compared to Cisco UCS system with M4 blades, priced at $912,000.
• Oracle Database Appliance X5: The company's package of compute, storage, and software. This release adds flash caching, integrated InfiniBand connectivity, increased compute cores, and increased.
• Oracle Big Data Appliance X5: This is Oracle's Hadoop and NoSQL appliance. It also runs the latest version of Oracle Big Data SQL, which extends Oracle SQL to Hadoop and NoSQL.
• Oracle Zero Data Loss Recovery Appliance X5: This is the company's database-integrated data protection solution.

The updated systems will be available later this year, the company said.