Dell, Oracle tout alliance on enterprise server systems

Dell Computer Corp. CEO Michael Dell and Oracle Corp. CEO Larry Ellison shared a stage Wednesday to detail a growing alliance built around selling clustered server systems to enterprises, while predicting that their systems and open-standards approach would relegate proprietary systems to niche status.

“There is no question that standardization is increasingly taking hold in an increasingly large portion of the enterprise opportunity,” said Dell. “Proprietary systems are going to continue to become the exception and the niche.”

Dell’s strategy is to sell servers primarily using two to four processors that can be combined, or clustered, to boost processing power. A key component of that strategy is Oracle9i’s ability to run on such clustered systems.

In a posh Fifth Avenue hotel, the two companies Wednesday introduced new low-cost cluster configurations starting at US$18,000. The systems are optimized for the Oracle database, which can run both Red Hat Linux Advanced Server and Microsoft Windows environments. Dell already has sold some 22,000 servers running Oracle databases.

To help push RISC/Unix systems into niche status, Dell and Oracle also announced a services partnership to ease migration from proprietary systems. Prices will depend on project requirements, but a migration to Oracle9i that takes 10 days to implement would cost about US$35,000.

With the release of Oracle9i last year, Oracle also came out with a technology called “real application clustering” that allows Dell servers to be grouped together by end users who can then “basically assemble your own supermainframe,” said Ellison.

One IT manager who sees an open-systems threat to proprietary models is Andy Miller, director of network operations at Wyndham International Inc. The Dallas-based hotel and resort operator is running a variety of operating systems, including IBM Corp.’s AIX and Sun Microsystems Inc.’s Solaris. Solaris is a prime candidate for replacement with a Dell hardware and Linux combination because of price issues, he said. Wyndham’s reservation system, which runs on AIX, was written specifically for that environment by the vendor, he said.

A proprietary Unix system “locks me in as the consumer of those products into very specific, regulated growth models,” said Miller “The more open-source, the more open-standards-based it is, the more flexibility I have, the more choices I have. And that to me is a huge benefit.”

But Dell’s goal to replace proprietary vendors in the enterprise could raise costs for vendors that need highly reliable systems, said Steve Randich, the CIO of Nasdaq Stock Market Inc. in Washington. Nasdaq needs the very top tier of reliability, but mainstream vendors aren’t going to try to fill that niche because they don’t have the economic incentive do so for a relatively small number of customers, he said.

But Randich, a heavy Dell user, fears that if these niche players, which could include major vendors making high-performance platforms, are pushed out of mainstream market, “they are going to have to drive up the price for that [highly reliable system] in order to maintain a reasonable profit.”

If that happens, he said, it “will compel firms like ours to use standard solutions in order to meet the cost and economic requirement, but then customize our applications to close that reliability gap.”

Ed Wojciechowski, the CIO of Menasha Corp., a Neenah, Wisc.-based maker of packaging and paperboard, plastics and high-density polymers, among other products, said he moved two years ago to Linux systems running on Dell hardware. He welcomes any tighter alignment between Dell and Oracle.

“Our model is Linux, Dell and Oracle, so anything that brings those closer together, we think, is a benefit and fits our business model,” said Wojciechowski.

Peter Kastner, an analyst at Aberdeen Group Inc. in Boston, said today’s announcement helps Linux, because Oracle and Dell are saying that Linux with Oracle “is good enough to run two companies that are north of US$10 billion dollars.” It also helps Red Hat Inc., because that company is the provider of enterprise Linux, he added.