Dell's strategy is that many data centers will choose to proliferate relatively inexpensive Intel-based servers to meet growing IT demands rather than consolidate processors onto fewer, more-expensive servers. This scale-out strategy resonates with Oracle, which is looking to sell its database software into clustered and grid-computing environments. "We have no more important partner than Dell," Oracle CEO Larry Ellison said at a teleconference Tuesday with Dell chairman and CEO Michael Dell.
Michael Dell pointed out during the teleconference that his company has 30,000 customers running Oracle database software on Dell servers--double the number doing so a year ago. "We think this will help expand our business in the high-end server market and extend that into small and medium business customers, where we're seeing a lot of growth," he said. The company's close relationship with Oracle won't affect its relationship with Microsoft because Oracle's Standard Edition One "is not a direct competitor with Microsoft," Dell added.
The pre-installation arrangement between Dell and Oracle will be particularly useful to small and midsize companies, Aberdeen Group analyst Peter Kastner says. Although it could take only 15 minutes for these companies to have the Oracle database installed at a later time, it could be an expensive 15 minutes if they have to hire a service provider to do it.
While the exclusivity of Dell's arrangement with Oracle runs out at year's end, the nine-month head start for Dell could translate into 1 million shipments, Kastner says. "As the leader in the low-end server market, Dell will be able to take the exclusivity period to the bank."
The companies also are expanding their existing sales agreement into China, in an effort to make it easier for Chinese companies to run Oracle's database, application server, and collaboration suite products on Linux-based Dell servers. Oracle is certifying PowerEdge servers with Red Flag DC 4.0 Linux and Oracle Database 10g at its China Development Center in Beijing.