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Lack of interest sinking Oracle's Raw Iron?

The much-publicized Raw Iron venture to sell database server appliances--nearly a year behind schedule--is still on the drawing board.

Oracle's much-publicized Raw Iron venture to sell database server appliances--nearly a year behind schedule--is still on the drawing board.

In 1998, Oracle introduced with great fanfare the Raw Iron plan to market and sell specialized server appliances. Oracle's chief executive Larry Ellison announced the strategy at the Comdex trade show that year and said systems would debut the following March. In 1999, hardware makers such as Hewlett-Packard and Dell Computer signed on to make the machines.

But, more than 15 months later, systems still have not debuted, server makers will not commit to ship dates and many analysts are saying the plan is faulty. The stakes could be high for Ellison: If Raw Iron fails, it may be strike two for his vision of a simplified--and non-Microsoft--computing world. Ellison and other Oracle executives saw Raw Iron vindicating his failed network computer concept, which aimed to simplify computing by streamlining "client" systems.

An Oracle representative would not comment on the delay in delivering systems and said the renamed Raw Iron plan--Oracle 8i Appliance--"is on track" and that an announcement on availability of the systems is slated for the coming month.

Many analysts have harsh words for the plan.

"Oracle ran into a lack of interest," said Meta Group analyst Anthony Bradley. "There's been no demand (for Raw Iron). It's been a bomb.

"I never expected Raw Iron to do well," Bradley continued. "One of the big initiatives going forward in the industry is database and server consolidation, the ability to manage multiple databases on the same box. (Raw Iron) increases server proliferation and decreases flexibility and manageability. So it seems to fly in the face of the market trends."

With the network computer plan dead, the idea behind Raw Iron is to move the concept to the server. But demand, along with shipping systems, has failed to materialize. Oracle plans to try once again to launch the systems, now officially called Oracle 8i Appliance, next month, sources said.

"(Raw Iron) wasn't something that turned a lot of people's heads and got a lot of business," said Hambrecht & Quist analyst Jim Pickrel.

A server appliance is a back-end computer that is usually geared for a specific task, such as handling email, housing a database or storing data.

The Raw Iron initiative intended to create machines in which the operating system is invisible and customers deal only with Oracle's database software. The Raw Iron machines run atop Sun Microsystems' Solaris operating system, and Oracle said HP and Dell--along with Siemens and possibly Compaq--would build and sell the systems.

Oracle expected medium-sized businesses, which could not afford to hire a full-time database expert, to welcome the Raw Iron appliances as an easy-to-use way to get their business data organized and online. Oracle planned to ship appliances to appear in three configurations, with the smallest version starting at around $10,000 with four processors. For large installations, the server appliances could be custom-built with more microprocessors.

But the plan has been troubled from the start. Analysts said it was being pushed along by Oracle allies--and Microsoft foes--as a way to sell entire server systems that bypass Microsoft for operating systems and database software. Ellison frequently positioned the servers as a way to blunt Microsoft's push into the enterprise software market, because they'd supposedly be cheaper and easier to manage than today's multifunction machines.

Analysts said demand for the systems never materialized, and that Oracle and server makers are still testing the waters before they commit to shipping systems.

An HP representative said Oracle 8i Appliance-based systems are in beta testing but refused to disclose a ship date. Dell and Compaq representatives were not available for comment.

A representative of storage maker EMC, which is devising storage products for Raw Iron servers, said Oracle would release systems sometime in the first six months of this year.

Analysts said Oracle may have also run into problems selling server makers on the idea of specialized server appliances. Some fear that such servers could become a problem for manufacturers, if general-purpose server sales start to decline as customers find they can make do with better-tailored machines. Still, several server makers are forging ahead with server appliance plans, afraid to ignore perceived demand.

Carl Olofson, an analyst with International Data Corp., said Oracle's problems with Raw Iron are business-related, not technology driven. He said that at an analysts briefing last December, Oracle executives were evasive when asked about Raw Iron. Oracle said that the delay was due to "working out the business details" with its business partners, Olofson said.

Olofson said Oracle is "still standing behind the whole program. I do think the idea still has merits. But I can see it would be complicated, particularly when people have a variety of options at the price point Oracle is dealing with."

Whatever the outcome, the Raw Iron concept most likely will not be the cash cow Oracle had anticipated. Sources said Oracle may be retooling Raw Iron as a program tailored to systems integrators, which would sell Raw Iron systems as part of a larger package of services and products. If so, that could force Oracle to lower the price they charge to integrators in order for them to make a profit.