Will Oracle move into networking or storage?

With the appointment of Mark Hurd as co-president of Oracle Corp., something big is on the way and it could be the acquisition of a storage or a networking vendor.


In 1979, when it was known as Relational Software Inc. and launched its first product, Oracle only did one thing: relational database management systems.

A generation later, it started to evolve into a general enterprise software company. In 2005, it moved into human resources software with the US$10 billion takeover of Peoplesoft, and entered the customer relationship management arena with the US$5.85 billion merger with Siebel Systems.


But for Oracle, being one-stop shop for enterprise software was not the end goal. Oracle had to get into the hardware business as well, which is why it bought Sun Microsystems Inc. for its servers and its Java programming language and operating system.


As CEO of HP, Hurd oversaw HP's acquisition of 3Com Corp., which was HP’s way of competing head to head with Cisco Systems Inc. Earlier that year, Cisco dropped HP as a certified reseller and Cisco rolled out its own servers, dubbed Unified Computing System.



Just before Hurd was forced out of HP, the Palo Alto, Calif. IT giant was competing with Cisco in providing both networking and computing products, as well as storage. Oracle has enterprise software and servers but does not make networking or storage products.

All of this to say Oracle could become an even bigger, more diversified IT player if it offered a complete package of financial and HR software, plus the underlying database, server, storage and networking hardware.

It has about US$9 billion in cash, even after the Sun acquisition. There has been a lot of consolidation in the networking industry, with Brocade Communications Systems Inc. buying Foundry Networks, Avaya Inc. buying the enterprise products of Nortel Networks Corp., but there are still plenty of smaller firms manufacturing switches and routers for large IT departments.


The battle between HP and Dell Inc. for 3Par Inc. shows the importance of the storage industry. While Oracle has no problem competing on the merits of its software, Hurd will no doubt have ideas on integrating storage and networking into the mix.

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