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Oracle, Dell join to boost SMP sales

With small- and medium-sized businesses (SMBs) firmly in their sights, Oracle Corp. and Dell Inc. disclosed details of a deal that gives Dell exclusive rights to deliver Oracle's Standard Edition One database pre-installed on its low-end PowerEdge 2600 and 2650 servers running on Linux and Windows.

During a conference call with reporters last week, Dell CEO Michael Dell and Oracle chief Larry Ellison outlined the extension of an agreement signed about a year ago. Ellison characterized Dell as the "ideal" partner because of the Round Rock, Texas-based computer maker's ability to help his company better penetrate the SMB market.

"The latest version of Oracle's database and the latest Dell servers will be bundled together in a low-cost package that is very easy for customers to buy," Ellison told reporters. He added that Oracle has "no distribution agreement with any other partner like this," and that his firm wanted to work with Dell because that firm does a good job of pre-loading software and configuring its servers. Under the earlier agreement, Dell pre-installed the Oracle 9i database cluster software on Dell's PowerEdge 2650 server line.

The deal makes Dell the first hardware vendor to bundle a product based on Oracle's recently launched 10g database, and serves to support the Redwood Shores, Calif.-based database giant's push into the grid computing space, Ellison said.

"We have been pushing grid technology hard," Ellison said, "not only for small- and medium-sized business customers, but for large customers [as well]. I can think of no one better than Dell to focus on small machines and turning those machines into grids."

Under the latest agreement, Dell will first offer server customers a shrink-wrapped version of Oracle's database, which the users will have to install. The company plans to begin pre-installing Oracle Standard Edition One on Linux servers at its factories by June, according to company reps, with a pre-installed version appearing on its Windows servers soon after.

The current agreement amps up the increasingly fierce competition for SMB market share between Oracle/Dell and rivals such as Microsoft, IBM, Hewlett-Packard and Sun Microsystems. Bundling the Oracle product should not affect Dell's partnership with Microsoft around its Small Business Server 2003 product, Dell said, because the implementations are not "exact competitors."

Oracle launched Standard Edition One in October to provide smaller organizations with a product that simplifies the process of clustering database servers.

Dell database servers costing less than $10,000 account for $460 million a year in sales, according to the company. Michael Dell said he expects that total to climb to $1 billion annually over the next two years.

According to the company, Dell has sold about 30,000 servers running Oracle software, up from about 15,000 a year ago. That software was sold separately.

Pricing for the Dell PowerEdge servers running Red Hat Linux bundled with Oracle's Standard Edition One database, including services and support, will start at $4,108. No pricing information was available on the Windows package.

About the Author

John K. Waters is a freelance writer based in Silicon Valley. He can be reached at john@watersworks.com.

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