Help! My vendor’s Oracle and I'm locked in!

Software-hardware all from Oracle excludes others, like Microsoft

Howard Street between 3rd and 4th streets in downtown San Francisco will soon reopen to traffic as another annual Oracle Open World (OOW) convention wraps up. With a reported 41,000 attendees, Oracle’s gathering is the only tech event that spreads out over the street that separates the North and South halls of the city’s Moscone Center. This year’s OOW, though, was not just about taking over Howard Street but taking over the IT industry.

It’s clear from the product announcements and executive presentations that Oracle is stepping up its vendor lock-in game dramatically. By introducing Oracle hardware running Oracle software, the company wants to squeeze out most other vendors, including Microsoft. It's not that we haven't heard this debate before, but some OOW attendees were skeptical of the move.

“Hardware and software engineered to work together” was the theme of the five-day event. With Sun Microsystems now part of Oracle, it is now a vendor of servers and storage hardware, processors, operating systems and the Java software development platform as well as its legacy middleware and database management software. Oracle CEO Larry Ellison, positioning Oracle as an IT systems company on par with IBM and HP, repeatedly talked up the wisdom, economics and the beauty of enterprises buying an integrated Oracle solution.

“We believe fundamentally that if you engineer the hardware pieces and the software pieces to work together you get a much better overall product. It’s more reliable, it’s easier to install, it’s faster and more secure,” Ellison said.

Two of Oracle’s biggest announcements were of integrated systems, starting with the Exalogic Elastic Cloud machine, intended to establish a private cloud computing resource within an enterprise. On Monday, Oracle co-president Mark Hurd, just two weeks on the job and just a few dozen miles up the freeway from his old job as CEO of HP, introduced the newest model of the Exadata Database Machine, version X2-8, for data warehousing and online transaction processing. “Exadata changed the game,” Hurd said.

The Exalogic and Exadata products are Sun/Oracle co-branded iron that are optimized to run on Oracle Linux or Sun’s Solaris operating systems, Oracle database and middleware and Java applications. You just cut one check to Oracle Corp., Redwood Shores, Calif., and all your problems are solved.

Others aren’t so sure.

“Your Oracle sales reps are coming to town,” warned David Vellante, CEO and co-founder of Wikibon.org, a Web site where industry analysts and others share their views on the IT industry. “You will be eaten alive, your costs will go up ... and you’ll be locked-in for a decade.”

By bundling hardware and software, Oracle will realize an advantage Sun never had, Vellante argued, which is access to a captive base in the applications and database market. He also says Oracle partners such as HP and EMC (he didn’t specifically mention Microsoft, but I think they’ll be effected, too), will be competing against Oracle’s bundled solutions.

Bundling is not the perfect solution Ellison makes it out to be.

“Integrated product stacks certainly offer technical/performance benefits but I don’t believe many enterprises will be willing to lock themselves into relationships with single vendors,” said Charles King, principal analyst at the research firm Pund-IT.

Enterprises have become pretty adept at choosing from an array of different vendors for an integrated IT system and don’t necessarily need a turnkey solution from one vendor, King stated in an e-mail interview. Also, customers might spend more on a bundled Oracle system than if they priced components individually.

In addition, Oracle’s move to bundle Oracle Linux or Solaris as the OS ignores the huge market share that Microsoft Windows still enjoys in the x86-based server installed base, including on many Oracle/Sun systems, he added.

“Windows is the dominant OS. If Oracle doesn’t provide those clients Windows-based offerings, it gives them a very good reason to talk with the systems vendors who do,” King stated.

Oracle’s takeover of Howard Street has ended and the flow of taxis, black Town Cars and other vehicles quickly resumed. Will Oracle’s move to take over IT meet a similar fate?

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