Oracle set to push hardware

Oracle, the world's largest supplier of business software, expects to accelerate hardware sales led by strong adoption of its high-performance 'engineered systems' line in Asia, especially by large companies on the mainland.

Chief executive Larry Ellison said global sales of Oracle's flagship Exadata database machine were forecast to reach about 3,000 units in the financial year to May 31, up from 1,000 units in the previous financial year.

'We think this product is just going to take off,' Ellison said at his company's OpenWorld conference in San Francisco. 'We certainly deliver the fastest computer for business that's ever been built.'

'The idea of engineering the hardware and software - all of it - so it works together gives us the opportunity to deliver better performance and lower cost, better ease of use, better security and better reliability across the board.'

He described iPhone and iPad maker Apple as an example of a company that was 'doing a pretty good job of designing hardware, software and online services that work together'.

Oracle's engineered systems line consists of pre-configured computer platforms - contained in steel cabinets roughly the size of big household refrigerators - that integrate software, servers, storage and networking systems to handle complex business workloads.

Following its purchase of computer maker Sun Microsystems for US$7.4 billion last year, Oracle stepped up development and marketing of its engineered systems line to create a new product segment in enterprise hardware technology. Oracle's first version of Exadata was co-developed with Hewlett-Packard and released in 2008.

In Asia, where Oracle has about 80,000 customers, Ellison pointed out that large companies such as China Mobile were providing 'interesting' examples of improved business performance as they deployed Exadata.

'We see our engineered systems being used to address cloud computing by telecommunications companies and outsourcing providers,' said Steve Au-yeung, the executive vice-president at Oracle Asia-Pacific.

Cloud computing enables companies to buy, lease and receive over the internet software, information and other shared information-technology resources, such as storage, that are remotely hosted in data centres. 'Cloud' refers to the internet, which is depicted in that form in computer network diagrams.

The other big-ticket engineered systems products that support users of Exadata are Exalogic and the newly launched Exalytics.

Adrian Jones, the senior vice-president for hardware sales at Oracle's Asia-Pacific and Japan operations, said the company was keen to expand its investments in marketing and hardware distribution coverage to the mainland's second-tier cities. 'That represents 21 per cent of the total available market for IT in China today. That's US$1 billion worth of IT spending,' Jones said.

On the mainland, the adoption of Oracle's engineered systems is being led by the telecommunications, manufacturing, financial services and public sectors.

Roger Li Hon-cheung, senior vice-president at Oracle Asia-Pacific's technology business unit, said China Mobile, China Unicom and China Telecom were among the biggest users of Exadata machines on the mainland.

Other prominent mainland users include giant household appliances maker Haier, aviation industry technology provider TravelSky, China Metallurgical Group Corp, Shenhua Group Corp and Huawei Technologies, the world's second-largest telecommunications equipment manufacturer.

'We've sold many systems to the Chinese government,' said Marcus Tsoi Hon-fai, the senior vice-president for Oracle's Fusion Middleware business in the Asia-Pacific.

Tsoi recalled that in the beginning, the mainland's information-technology purchasing policy strictly separated hardware and software acquisitions.

'So engineered systems were not on the list,' Tsoi said. 'As soon as they realised the value of the product, they changed the policy.'

Carter Lusher, the chief analyst for enterprise applications at market research firm Ovum, said: 'China is an especially good opportunity for Oracle because Chinese companies are growing rapidly and require infrastructure that can scale up in a relatively easy manner.'

In a report published in August, market research firm IDC said: 'Customers needing more IT horsepower - for example, to run complex data warehouse set-ups and heavy transactional applications - have adopted Oracle Exadata.'

Technology analyst firm Gartner projects worldwide data centre hardware spending to reach US$98.9 billion this year, up 12.7 per cent from US$87.8 billion last year. Data centre hardware spending includes servers, storage and networking equipment.

As of September 15, top-of-the line Exadata database machine X2 cost US$1.65 million. Its most prominent competitors are IBM's Power 795 server and HP's Superdome.

The merger with Sun has also helped Oracle to increase the number of its corporate customers worldwide to nearly 380,000 and global revenue to US$35.6 billion in its last fiscal year.

4b

The amount, in US dollars, that Oracle spends every year on research and development

- Revenue was US$35.6b last fiscal year