Global CIO: Larry Ellison's Hardware Boasts Are Nonsense, Says IBM
Ellison says his Exadata machine is converting IBM customers, but IBM says Ellison's dealing in smoke and mirrors rather than reality.
"Oracle is so eager to throw dirt at IBM that it forgot the facts," the IBM spokesman's email reply said. "Here are a few that Oracle forgot to point out:
"1) Gartner is seeing a rebound in the server business, but that apparently has missed Oracle, since its revenue share declined nearly 40 percent. 2) Also according to Gartner, Oracle's unit shipments declined nearly 30 percent, as customers move away from Sun servers. And 3) Meanwhile, IBM according to Gartner gained share in x86, UNIX and high-end systems in the first quarter."
IBM also referred to a report by Gartner analyst George Weiss, and cited from that report the following points:
**"With limited published product road maps for server hardware and operating systems, uncertainty surrounding Oracle's hardware road map continues.
"**Most clients would favor Solaris on x86 if Oracle would support the OS on other than Sun hardware.
"**Expect revenue from Oracle's high-end SPARC offerings to fall further behind IBM and HP.
"**Users have told Gartner that the combined Oracle and Sun sales force has so far been ineffective in selling servers.
"**We believe users are concerned about the increased power of Oracle to control pricing in fully integrated hardware and software stacks." (End of excerpt from report from Gartner's Weiss.)
The mutual diss-fest was set off by two developments, one tactical and one strategic—and CIOs need to bear in mind that the while the provocative comments from both sides are attention-grabbers, the more-vital play resides in the strategic analysis of why Exadata is has so quickly become a billion-dollar product.
Tactically, the trigger was some very pointed claims made by Ellison about IBM during Oracle's June 24 earnings call with analysts during which Ellison said the following:
"And our current version of the Sun Exadata Database Machine substantially outperforms IBM's fastest computer in both data warehousing and transaction processing. As a result, in our previous quarter, Q4, some of IBM's largest customers began buying Exadata machines rather than big IBM servers.
"And the 2011 Exadata pipeline continues to grow and is now approaching $1 billion, making Exadata the fastest-growing new product in Oracle history," Ellison said. . . .
"Again, I said the competition has really shifted from companies like Teradata and Netezza to big IBM machines, and the Q4 results bore that out. We beat IBM 30 times in Q4; we beat Teradata 9 times in Q4; and we beat Netezza 7 times in Q4, and we've sold the Exadata machine into some of IBM's largest and bluest accounts, including Bank of America; Carrefour, the largest retailer in the world behind Wal-Mart; and Thompson-Reuters. . . .
"Exadata Version 2 is a relatively new product. As long as we can demonstrate in benchmarks that we're a lot faster than IBM's fastest computer, the appliance is particularly attractive in OLTP, because since OLTP is mission-critical and all these pieces fit together, our architecture is not only faster than IBM's, it's much more reliable," Ellison said.
"I think the combination of much better performance and the fact that it's an appliance, where all the pieces are engineered to fit together and are tested together, and the fact that it's a fault-tolerant architecture gives us a huge advantage over IBM in the OLTP space."
Strategically, the issue centers on the industrywide move—sparked, I contend, by Ellison and Exadata—toward large and immensely powerful integrated and optimized systems with precisely tuned hardware and preconfigured software. IBM has begun showcasing its "workload-optimized" systems that it has offered for some time, IBM and HP are both working with SAP on high-end analytical systems, and HP and SAS have a similar appliance in the works.
And these new machines—along with those from Teradata and Netezza—aren't just for data warehousing anymore, as Ellison notes in his comments above: instead, he's driving Exadata into production-level OLTP systems, and Oracle says customers are snapping up the high-end appliances faster than it can make them.
This is a critical point because we all might find it easy to dismiss all of this as just some standard BS-swapping between two high-spirited competitors. But it's important for CIOs to see beyond that posturing, because there's something much more significant at play here: the shape of high-end platforms and systems that will play essential roles in enterprise architectures for a long time to come.