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Oracle's hardware gambit: Not so crazy

Larry Ellison has a lot riding on Oracle's burgeoning alliance with HP and its new data warehouse appliance. And unlike his failed network computer project a decade ago, this time around, he just might do hardware right.

Larry Ellison is finally in the hardware business. Maybe the second time's a charm.

Oracle CEO Larry Ellison Dan Farber

In the late 1990s, Ellison tried to drum up support for a network-based computer. He barnstormed around the country with Sun Microsystems' Scott McNealy and made the case for a thin-client alternative to the Wintel duopoly. They were so convincing that Intel embarked upon a crash course to squeeze down costs before the NC could ever get going. Intel prevailed in that contest and Ellison moved on.

Now he's back on a considerably bigger scale--not to mention on more familiar turf.

Oracle's announcement this afternoon qualifies as big news. So does its burgeoning development relationship with Hewlett-Packard, which may be even bigger news. (HP's Ann Livermore noted that HP and Oracle already share about 150,000 joint customers worldwide. If the companies don't blow what looks to be a big opportunity, that number can only grow.)

Oracle's got a lot more riding on its "data warehouse appliance" (as Mark Hurd described the HP Oracle Database Machine) than in the days when the network computer was Ellison's rallying cry. The first units feature 168 terabytes of disk data and 64 Intel cores. HP, which made the systems according to an Oracle design, will supply hardware support. Customers still have to order the machines from Oracle, which should make Ellison happy about the opportunity for his sales team to to cultivate (and sell) that customer list to their hearts' content.

Forrester's James Kobielus noted that Oracle had demonstrated that it can now scale its DW/DBMS platform to address the petabyte-scale analytics requirements that will soon come into the enterprise mainstream everywhere."

Indeed, Ellison made the case that customers will receive better performance because Oracle has coupled its database software with custom hardware. Dana Gardner, who has a good writeup of the event, points out that in this case, the idea is to bring the "intelligence closer to the data, that is bringing the Exadata Programmable Storage Server appliance into close proximity to the Oracle database servers, and then connecting them through InfiniBand connections."

How these two companies were able to keep this secret for most of the three years it took to complete the project is a source of some chagrin to the Fourth Estate and associated blogger types who follow this stuff. But the announcement is already being hailed as "earth shattering"--and perhaps the hyperbole this time isn't so over the top.