Oracle to Bundle 10g Database on Dell Servers

by Timothy Prickett Morgan

Almost exactly a year ago, Larry Ellison, the CEO and founder of database maker Oracle, and Michael Dell, the chairman and founder of server maker Dell, announced an alliance whereby they would attack the vast Unix and mainframe installed bases by pitching Oracle's 9i Real Application Clusters running on Dell's PowerEdge Xeon-based servers running either Linux or Windows. Flash forward a year, and the two companies have finally figured out that they should let customers order Oracle's 10g database preloaded on PowerEdge servers, just like Dell (and all other server makers) do with Windows operating systems and are starting to do with Linux distributions.

While this may seem an obvious thing to do, controlling the sale of something as expensive as Oracle 9i RAC or Oracle 10g is a tricky thing. Oracle's existing sales people and channel doesn't want Dell muscling in on its turf. But Ellison and the other people at Oracle know they have to make Oracle 10g a no-brainer sell, just as obvious and easy as Microsoft 's bundling of Windows Small Business Server 2003 is for SMB customers. And this is why Oracle has relinquished some control over its sales to Dell as part of a pre-load agreement it announced with the company yesterday.

Under that agreement, Dell will be able to preinstall Oracle 10g Standard Edition One, the entry version of the database that scales up to two-way servers, on its PowerEdge 2650 and PowerEdge 2600 two-way Xeon servers. If customers prefer, they will also be able to buy a shrink-wrapped license to Oracle 10g Standard Edition as part of a server purchase and install it themselves, or if they have an installed PowerEdge server, they will be able to buy Oracle 10g Standard Edition directly from Dell. As part of the agreement, Dell will provide level one technical support for the Oracle database, as well as installation and customization servers; Oracle will provide level two and level three tech support. Oracle 10g Standard Edition costs $4,995 per processor or $149 per user.

It is obvious why Dell wants this deal, and the guy whose name is on the company said so. "We think this is going to help expand our business into the high-end enterprise server market," Dell explained, "as well as down into the SMB market where we are seeing good growth." What Dell is not doing--at least not yet--is selling the full suite of Oracle 10g editions, mainly because it is trying to sell clusters of two-way machines as an alternative to big SMP boxes. This time last year, Dell had 15,000 customers running Oracle, and now it has 30,000. Dell said that his company had a 22 percent share of the database server market for machines priced under $10,000, which he reckoned is a $500 million market that would grow to $1 billion over the next few years.

Both Dell and Ellison tried to pitch the agreement as being exclusive, but the reality of the situation is that it is only exclusive for now. It is hard to believe that Hewlett-Packard, Sun Microsystems, and even IBM, which only loves Oracle inasmuch as its Unix and some Windows customers ask it to, will try to get similar deals if this agreement helps Dell sell more iron and software. Ellison would not say exactly how Dell's competitors in the server racket would react. "They're struggling to do it," he said, "and I am sure they are going to try." One of the secrets to pre-installing Oracle 10g is that it takes the installation process down to about 15 minutes, which compares pretty favorably to the many hours and days it used to take to get prior releases of Oracle running from a stack of CDs. How much this has to do with prebundling and how much it has to do with improvements in Oracle 10g is not clear.

In addition to the pre-loading agreement, Dell and Oracle also announced that they had expanded Dell's reseller agreement to include the Chinese market, where Dell has a server business that grew at 85 percent last year. The pre-installation agreement also extends to the Chinese market. Dell said that it is certifying PowerEdge machines to run Red Flag Linux and Oracle 10g.