So I think it's great for the IT industry but particularly great for CIOs that Ellison is channeling his competitive energies-at least on the surface-toward IBM in the high end of the hardware business. I say "at least on the surface" because, for all the things Larry Ellison is, he is surely incredibly smart and knows the value of a good sound bite.
Because to date, while Oracle in its history has sold hundreds of billions of dollars worth of software and services, here is its sum total in its history for hardware revenue: $0. Yet, by calling out IBM as his target at the high end of the hardware business, and by betting that his Exadata database machine can run twice as fast as a comparable system from IBM, Ellison has put himself into play against the very company that created not only computer hardware but also high-end computer hardware.
On the flip side, it is certainly possible that IBM will kick Oracle's teeth in, and that Ellison will have to pay the $10 million to a CIO at some company whose IBM systems hold their own against Exadata, and that much of Ellison's bravado in taunting and challenging IBM will end up being ill-advised and terribly costly.
IBM did not get to its spot as one of the pre-eminent corporations in the world because it shies away from challenges, or because it's somehow snuck under the radar and just happened to bumble its way to $90 billion in revenue with a fabulous profit margin.
So no, I don't see IBM quaking in its boots because of Ellison's challenge or for any other reason. But by reinforcing once more that customers in all parts of the IT business have lots of choices and approaches, Ellison has provided the type of spark that vibrant and lusty industries need to stay fresh and relevant and innovative.
In Oracle's challenge to IBM, Ellison's bet is expressed like this:
Your Company Could Win $10 Million! If your Oracle database application doesn't run at least twice as fast on SUN hardware as on IBM's fastest computer, your company could win $10 million from Oracle. Even IBM is welcome to enter the $10 Million Challenge!
Competition makes us all better. Competition gives buyers more choices. Competition breeds innovation, weeds out mediocrity, rewards excellence, lowers prices, and raises value. Competition becomes self-sustaining by fostering a culture of rewards and risks, by clearly delineating between achievement and intent, and by intensifying the focus on objective performance.
And Larry Ellison helps drive the competition that has made this industry so special. It is very possible that IBM will kick the snot out of Oracle, but that's okay-because in the end the real winners will be the customers.