Oracle Gearing Up for Battle in Converged Datacenter

I just commented on Larry Ellison’s public remarks at a Churchill Club event held in San Jose last night.

In that post, though, I neglected to draw notice to a particularly interesting comment that was attributed to Ellison by Fortune’s Jon Fortt:

Ellison, 65, said that even after 32 years at the helm of Oracle, he doesn’t see retiring anytime soon. He intends to develop Oracle into a technology powerhouse that provides not just software, but computing, storage and networking gear. The company recently started mapping out its five-year plan, and he intends to continue at the helm at least long enough to execute it.

Let me play part of that back again: “He intends to develop Oracle into a technology powerhouse that provides not just software, but computing, storage, and networking gear.”

It would be interesting to hear Ellison expound further on that idea. On the surface, it sounds a lot like the converged datacenter strategies being pursued by Cisco and HP.

In the meantime, while waiting for Ellison to clarify what he meant, we might gain some insight into where he’s heading by perusing a blog post written earlier this year by Jonathan Schwartz, Sun’s CEO and president.

Here’s a key excerpt:

As I’ve said before, general purpose microprocessors and operating systems are now fast enough to eliminate the need for special purpose devices. That means you can build a router out of a server — notice you cannot build a server out of a router, try as hard as you like. The same applies to storage devices.

To demonstrate this point, we now build our entire line of storage systems from general purpose server parts, including Solaris and ZFS, our open source file system. This allows us to innovate in software, where others have to build custom silicon or add cost. We are planning a similar line of networking platforms, based around the silicon and software you can already find in our portfolio.

We believe both the storage and networking industry’s proprietary approach, and their gross profit streams, are now open to those us with general purpose platforms. That’s good news for customers, and for Sun.

At the heart of this convergence is Solaris – enabled by technologies such as ZFS (around which we’re building our entire storage line), and Crossbow (around which you’ll see us build some very compelling networking products).

From what Schwartz wrote and the diagram (see below) included in his blog post, one wouldn’t be making an unreasonable leap of logic to conclude that the Sun blueprint for datacenter systems convergence would have put it on a collision course with Cisco and HP, both of which have similar plans for datacenter domination.

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If Oracle adopts Sun’s manifesto and jumps into the ring against Cisco and HP, it will be hoping that its own software and Sun’s open-source Solaris will represent the “secret sauce” that confers sustainable competitive edge over its rivals. What’s fascinating is that each of the three will have come from a different jurisdiction of the datacenter — Cisco from networking, HP from computing, Oracle from enterprise software — all working feverishly to buy or build the parts that complement and complete the whole.

IBM is in the competitive mix, too, though it is taking an integrator’s approach to datacenter convergence, not relying on owning all the hardware, perhaps reasoning that it is heading toward commoditization anyway. For IBM, software and professional services are the keys to the datacenter kingdom.

Oracle could contend that, on paper, its acquisition of Sun’s hardware and open-source software gives it a clear advantage in putting together cost-effective, converged datacenter solutions for enterprise customers.

But the market isn’t a piece of paper. Plenty can go wrong on the road to execution.

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