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Global CIO: IBM & Oracle Expose Hewlett-Packard's Achilles' Heel

While HP's systems strategy is on hold, Oracle and IBM are leading customers into the new age of highly integrated and optimized systems.

As various disruptive forces rock the traditional enterprise-IT business, IBM and Oracle are grabbing leadership positions in the emerging market for highly integrated and optimized systems by not only battling against but also collaborating with each, while Hewlett-Packard by contrast seems either uninterested in this dynamic new sector or unsure of how to approach it.

While most of the discussions around this relatively new breed of purpose-built machine or appliance has focused on Oracle's Exadata V2 database machine and its billion-dollar run rate for 2010, IBM has launched four new optimized ERP systems that bundle its new Power 7 hardware with enterprise apps from SAP, Infor, Lawson, and none other than Oracle's very own JD Edwards brand.

If that Oracle-IBM collaboration can take place in spite of the fangs-out catfight in which those two companies have otherwise been engaged, and if that collaboration can also be taken as a measure of how appealing CIOs are finding these new optimized systems, then I can only scratch my head at HP's apparent reluctance to jump even tentatively into this new category that has the potential to cut integration costs for CIOs while also letting them focus more of their teams' time and brainpower on customer-facing opportunities instead of internal tuning and tinkering.

And with each passing day, HP is also losing ground to a handful of other highly capable and ambitious players in this brand-new market, ranging from powerhouses like EMC, which has bought its way into the action by acquiring appliance maker Greenplum; Teradata, which has been offering narrowly focused but highly successful purpose-built data-warehousing machines for almost two years; Netezza, which has continued to grow nicely in spite of being tiny relative to some of its competitors; and even Microsoft, which is jumping into the field with a parallel data-warehousing system that it says will be the first of several specialized machines it intends to bring to market this year.

Microsoft hasn't identified its hardware partner, and perhaps that partner will be HP. But if it's not, you've got to wonder: what does HP know about this market that the companies mentioned above don't know? Or, why is HP avoiding a potentially high-growth new category that gives hardware companies the opportunity to step beyond the commodity server business and up into the more-sophisticated, higher-value, and higher-margin world of integrated and optimized systems?

While lots of Oracle software is currently running in data centers around the world on HP hardware, the fact that Oracle itself is now in the hardware business will not make it any easier for HP to buddy-up with Oracle in this new market. While that competitive position on the hardware side certainly doesn't preclude an HP-Oracle pairing in the future—just look at the IBM + Oracle (JD Edwards) pairing mentioned above—it also doesn't simplify it, and when you're playing the sort of catch-up that HP will have to play, simplicity is far preferable to complexity.

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So if Oracle could be a bit dicey as a software partner for HP, then what about SAP? That's certainly an option, and at SAP's Sapphire event in May, the company announced forthcoming optimized systems featuring SAP software running on HP hardware and on IBM hardware. But that news all came from SAP, and Hewlett-Packard has had very little to say about its views of this space, or the opportunities it sees, or how these machines might fit into its massive product portfolio.

In the meantime, IBM itself has had no such reticence about its very aggressive position on optimized systems and its partnership with SAP in expanding its fleet of such machines. In its materials announcing the four new Power 7 integrated systems, IBM said this about how the new ERP machine extends the special relationship between IBM and SAP, noting that IBM committed extra investment dollars to the new machine running SAP software, according to an IBM spokesman:

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