SAN FRANCISCO: Oracle has maintained that its hardware division is not at risk from the shift to cloud computing, as the firm plans to sell to software-as-a-service providers instead.
Speaking at the Oracle OpenWorld show in San Francisco, executive VP of systems, John Fowler, played down suggestions that Oracle's hardware business would be cannibalised by the firm’s burgeoning focus on cloud, a focus epitomised by new CTO Larry Ellison during his keynotes at the show.
"The company that builds the best hardware to run the cloud is going to win and that’s what we’re focusing on," Fowler said.
"What cloud changes, is the people who buy hardware may change over time. An enterprise forever to come will buy their own hardware and will use some cloud services.
"The cloud services like Salesforce.com or anyone else, have got to run their services on hardware so they’re an economic opportunity."
As evidence of this, Fowler noted that the Oracle cloud is built on its own hardware - Oracle servers, storage and network.
"When we figure how to build clouds without any hardware, that might become a good thing. People are making enormous investments in hardware to build clouds, including Oracle itself," he added.
"Oracle has a gigantic investment in 19 data centres. We have an economic advantage as we get all of that at cost of goods, and we fix all of that ourselves."
As well as embracing the opportunity to sell to its rivals, Fowler said that Oracle has no concerns about supporting third-party software on its hardware.
"I have folks who work hard to make sure that EMC works with our servers. It’s a very calm and methodical approach," he explained.
"We know there is no possible way to address customers’ needs without running other software and integrating with other people’s products. We are very aggressive about working with Intel and working with other people’s products.
"The customer wins. They get to pick. Enterprises are very complicated places with lots of different applications and we’ve got to be really good at working with other storage, other servers. And I’m going to try to build the best in those areas."
Oracle has suffered a slight decline in hardware revenues over the past year, the group accounting for 14 percent of total sales in the most recent quarter compared with 15 percent last year.
It is worth noting that hardware systems were still worth $1.2bn to Oracle in that quarter, a sizeable chunk that the firm is unlikely to want to see fade away owing to under-investment or lack of focus.
However, Fowler conceded that his division has had to embrace its software side when it comes to selling engineered systems, which combine Oracle hardware and software.
"With engineered systems, it turns into a bit more of a software discussion, as we’re talking about how do you have much higher database performance, how do you administer it more clearly, how do you do multi tenancy as opposed to how many PCI Express slots would you like," he explained.
"That’s a work in progress. I think we’ve gotten pretty good at it but it did take us some time. We want to talk to customers not about how many PCI Express slots they want to have, that’s not that useful any more.
"We want to talk about how long the application will run, and here are 10 other customers in your space and what they did with the technology."
But he had some reassurance for the customers "that really want to talk about slots and things" as Oracle still has its technical sales consultants on hand.
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