Oracle Corp. (ORCL)
Chief Executive Officer Larry Ellison unveiled a high-end server with more memory
and an updated flagship database to compete against SAP AG (SAP)
in meeting businesses’ growing information needs.
Oracle will also sell computing power and storage,
applications software, and its database as a cloud service businesses can rent
instead of buying outright, Ellison said in an address to open the company’s OpenWorld conference at the Moscone Center in
San Francisco.
“You can access all of these services across the network,” said Ellison. “It
makes sense for Oracle to be in all three tiers of cloud services.”
Oracle, the world’s largest supplier of
database
software, is jockeying with SAP, the top business applications maker, as
well as Salesforce.com Inc.
(CRM) and Workday Inc. (WDAY),
for the edge in cloud computing for businesses. Its revamped 12c database, the
first new version in five years, will let customers move their
computing jobs from data centers to the Internet, Ellison said.
The company’s addition to its Exadata line of servers, called the X3, will be
able to house as much as 22 terabytes of flash computer memory and four
terabytes of DRAM in a single server rack to greatly speed up business reports.
That’s four times as much flash storage per rack than a previous version of
Exadata, Ellison said.
‘Ideally Positioned’
“If you thought the old Exadatas were fast, you ain’t seen nothing yet,” said
Ellison, wearing a suit and black turtleneck and standing before eight giant
screens bearing his slides.
He said Oracle is “ideally positioned” to deliver many components of hardware
and software -- including its database, application-connecting middleware and
computer systems -- as a cloud computing service delivered entirely through the
Internet, or with some equipment sitting in customers’ data centers.
“Oracle should be in this business,” said Rick
Sherlund, an analyst at Nomura Holdings Inc., who recommends buying the
shares. “Oracle has to reposition for the cloud.”
Ellison has said the 12c database will let Oracle
serve multiple companies’ data-processing needs from the same information
storehouse and will arrive by early next year. The company’s Exadata and
Exalogic systems, plus its database, Java development tools and social
media-analysis software, can be delivered to businesses as a service Oracle
manages over the Internet, co-president Mark Hurd said
in an interview last week.
Growing Data
Hurd, along with other Oracle executives including Ellison, will be speaking
at the OpenWorld conference this week, which runs through Oct. 4.
International
Business Machines Corp. (IBM), Microsoft Corp.
(MSFT) and VMware Inc. (VMW) are
also vying to supply more of the platform software that can help companies move
to cloud computing. SAP’s High Performance Analytical Appliance uses hardware
from IBM, Hewlett-Packard Co.
(HPQ) and others to store data in computer memory for faster analysis.
SAP and Oracle are battling to sell products that
can load more of a program’s data in memory to let businesses gain an edge by
drawing insights from growing volumes of data, said Bill Hostmann, an analyst at consultancy Gartner Inc.
“People’s ability to make decisions is still based on pretty small sets of
data,” said Hostmann, who has advised Oracle on its new products. “That’s what’s
really driving the market.”
Cloud Shift
Oracle, based in Redwood
City, California, is depending on new products and a shift to cloud
services to help reverse a slowdown in growth and a stock price that has
underperformed those of its rivals. Sales declined 2.3 percent in the fiscal
first quarter ended August, dragged down by a drop in the hardware business
acquired from Sun Microsystems in 2010.
New software license sales, a measure of freshly signed business -- tapered
to 5 percent growth in the quarter, from more than 16 percent a year ago.
The new Exadata servers -- which pack computing power, storage capacity and
high-speed networking into a single chassis to speed performance of Oracle’s
database -- can set the company apart from competitors, Hurd said last week.
“SAP has an in-memory machine that’s a little smaller than what we offer,”
Ellison said.
SAP has positioned machines running its HANA in-memory computing software as
a potential replacement for Oracle databases. The machines are “a real-time
platform” for analyzing data and offer a different proposition to Oracle’s,
which let companies “do the same things they’ve been doing for years, only
faster,” SAP spokesman Jim Dever said in an e-mail on Sept. 28.
Shares of Oracle closed Sept. 28 up less than one percent at $31.46. The
shares have gained 23 percent this year, compared with gains of 35 percent for
SAP and a 51 percent climb for shares of Salesforce.com.
(Source: Bloomberg)