Dell ushers in new midmarket wares

Dell Corp. said plans under its recently expanded partnership with Oracle Corp. will help extend Oracle 9i capabilities to companies that couldn’t afford them before – but not all analysts agree that smaller enterprises will benefit in the long run.

Under the terms of the agreement, Dell will offer a server/storage platform optimized for the Oracle9i database with Real Application Clusters (RAC) for both Red Hat Linux Advanced Server and Microsoft Windows environments, for an estimated starting price of US$18,000.

The scalability of this solution, according to Wendy Giever, spokesperson for Dell Enterprise Systems Group in Austin, Tex., “addresses the needs of quite a few customers, from small and medium businesses through to enterprises.”

Customers now have the option of starting small and scaling up as the need arises, she said. “It’s simple to add another node, whereas if they were looking into a proprietary solution, they would have to buy a big box and hope they’d need it in the long run.”

Giever said that in the medium-business realm – defined as firms with 100 to 500 employees – an $18,000 price tag is “doable.” She estimated these clusters would cost one-third of what a Unix configuration would.

Lower cost is exactly what Oracle CEO Larry Ellison was emphasizing during a Dell press conference in New York City earlier this month, she noted. “Larry kept saying that in order to get more performance, you have to be willing to spend less.” Giever said the shift toward lower-cost, faster servers is one fostered by Intel and other companies; Intel processors tend to be refreshed more often for speed than RISC- (reduced instruction set computer) based chips.

“Now with Intel-based servers, you get the same availability that only used to come from proprietary platforms, and only used to be available on RISC,” she said, adding that with these changes, “there is really no more reason to buy proprietary.”

IDC Canada Ltd. analyst Warren Shiau said acceptance among smaller enterprises would be more likely in Canada if Oracle modifies its pricing level or tailors its offerings for the lower end. But for now, he added, the Dell/Oracle offering will probably appeal more to the lower end of the enterprise – “those companies that are just beyond that mid-market limit,” defined as 200 to 500 employees by the Toronto-based research firm.

Gordon Haff, senior analyst with research firm Illuminata in Nashua, N.H., said Dell is treating the new 9i RAC as “an opportunity to compete in the enterprise database area without having to offer any specific custom hardware with lots of processors.”

It’s also a chance for Dell to play in the high-end database area with commodity servers, Haff said. In the past, Dell hasn’t shown any interest in playing in hardware niches. “Standards-based servers are what Dell is good at doing. I think they see this as an ability to expand the types of applications they can address, without expanding outside of their hardware comfort zone,” Haff said.

In the long term, as this technology becomes easier to install, it will start to appeal to smaller companies that need to run databases, but that couldn’t afford specialist hardware in the past.

However, “by and large, this is not an SMB (small and medium business) hardware/software combination,” Haff noted. Oracle is still a very high-end product, and there are still complexities associated with clustering that require a reasonable level of it expertise. “This is not the type of installation that a typical SMB is going to use,” Haff said, adding that for most smaller companies, standard Oracle 9i or other lower-end databases running on a two- or four-way server should suffice.

“This is just a different way of building a fairly high-scale database,” and the concept will probably be too sophisticated for smaller enterprises with fairly modest transactional needs, he said.