Wolfe's Den: Why Oracle's Sun Servers Are Sinking (And Why That's A Good Thing) - InformationWeek

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12/2/2010
01:16 PM
Alexander Wolfe
Alexander Wolfe
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Wolfe's Den: Why Oracle's Sun Servers Are Sinking (And Why That's A Good Thing)

Gartner reports scary Q3 sales news for the server business Oracle took control of when it acquired Sun Microsystems, but Larry Ellison's focus on optimized systems such as Exadata is the reason Oracle needn't worry.

As O'Connell's comment telegraphs, things were much worse this cycle. In Gartner's Q3 tally, Oracle's "by revenue" market share fell from 8.1% to 6.2%. More glaringly, Oracle dropped entirely off of the top 5 volume list. (They've been displaced by NEC.)

Ace In The Hole

So why I am so blithely sloughing over the sagging Sun server numbers? It's because building mostly commodity servers doesn't provide a long-term strategic advantage. Integrated offerings like Exadata do. (I use the phrase "mostly commodity," because I don't want to lump UltraSparc systems in the low-end bucket.)

Integrated offerings are the future, particularly when you're talking about a vendor with an enterprise software portfolio, which is trying to make a case for the high value of its product. That's even more important in a world where a second wave of commodity pressure has emerged on the apps front, via cloud and SaaS.

So far, Exadata is looking like a smart play, the pressure from IBM notwithstanding. (Actually, what IBM is doing further validates this area.) Earlier this year Ellison said the value of Exadata deals in the pipeline approached $1 billion. That was in June, so if things remain on track, Oracle's optimized systems sales will presumably make up for much of the revenue lost by the drop in commodity servers.

There's also a technical advantage attendant to Exadata. Integrated and optimized systems have a spillover effect in that they support the more rapid advance of compute platforms than would otherwise occur in a grind-it-out commodity market.

I got some perspective on this earlier this year when I talked with John Fowler, Oracle's executive vice president of systems. He talked about some of the internal optimizations being designed into Exadata, aimed at reducing latency (the amount of time needed to access data):

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