Oracle this week made nice with Dell. Yes, DELL, the company that Oracle CEO Larry Ellison dismissed as a low-end commodity box provider while he was pumping up Oracle’s high-end “engineered systems.” Well, now Dell is apparently Oracle’s special friend in the X86 market. What the two companies announced in a bizarre video appearance by Oracle co-prez Mark Hurd at a Dell event was that Dell is now a “preferred x86 server partner” for Oracle and while Oracle is likewise a “preferred enterprise infrastructure partner of Dell.”
Oracle CEO Larry Ellison
That’s interesting because not all that long ago, HP was Oracle’s bestie in x86 servers . Of course that was before HP fired Mark Hurd for cheating on expense accounts and inappropriate interaction with a female contractor and before Larry Ellison blasted HP very publicly for doing so, and HP sued Mark Hurd and….well you get the picture.
Now, before it got into the server — er engineered systems — business by virtue of buying Sun Microsystems for $ 7.5 billion in 2010, Oracle courted most of the major hardware guys with the exception of archrival IBM. HP CEOs Carlie Fiorina then Mark Hurd and Michael Dell, typically keynoted at Oracle OpenWorld.
As an enterprise software company, Oracle needed good relationships with companies selling servers into enterprises and to bundle with those servers if necessary. In fact, the very first Exadata engineered system, which came out before the Sun deal, was actually an HP box. But then with its ownership of Sun and its server lineup relationships got more complicated.
As one Dell partner at the event told CRN’s Joe Kovar: ”The last thing I ever expected at this event was to see Mark Hurd’s face.” 
Let’s face it: A customer buying a Dell box running a raft of Oracle software isn’t likely to buy an Oracle engineered system. And, as I’ve reported for a while, Oracle hasn’t exactly hit the cover off the ball selling hardware – hardware revenues have headed south ever since the Sun acquisition — although Oracle would argue that the hardware it does sell is highly profitable.
Anecdotal evidence is that most people who buy Exa-boxes are doing so at discount and are not necessarily loading up those boxes with new Oracle software but consolidating what they already own on new hardware. Anyway, my thesis is that if Oracle truly were happy with its hardware sales and profitability it wouldn’t be doing this.
There ‘s even some concern that sales of Oracle’s business applciations is flagging. Last week, according to the Wall Street Journal’s CIO Journal, Forrester analyst Paul Hamerman reiterated his thesis that Oracle customers are not moving from their legacy apps to Oracle’s new implementations, once known as Fusion. Oracle has strongly denied that contention.
NSA spying, fallout for cloud computing adoption?
For folks worried that using consumer oriented services like Facebook clearly had more reason to worry this week as news broke (and kept breaking) about the U.S. National Security Agency’s monitoring of internet and cell phone data. GigaOM’s Mathew Ingram did a great job updating this story all week and David Meyer outlined the huge ramifications this could have in Europe where data privacy is a key concern.
You’ve got to wonder if this will have a chilling effect on various “cloud first” initiatives. Earlier this week, I wrote that Amazon Web Services might deploy ”mini me” GovClouds outside the U.S. for workloads that government agencies — or even businesses – would prefer to keep in-country. Since posting that I’ve had several emails from people who would know that AWS is, in fact, doing this.
Given that AWS, one of the few internet powers not named in the NSA story — is U.S.-based, I wonder if there could be pushback from other countries that otherwise would consider a GovCloud implementation.
Meanwhile, Amazon finally acknowledged the existence of a “secret” contract to build a private cloud for the CIA but it took IBM to get it out of them. IBM contested the contract award to the General Accountability Office which ruled in IBM’s favor and recommended a “re-do” of the process. Kudos to Federal Computer Week reporter Frank Konkel for keeping ahead of this story.
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