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Oracle strikes while Raw Iron is hot

CEO Larry Ellison says the database maker has struck a deal with Dell to sell its Oracle 8i appliance and is negotiating similar agreements with Compaq and IBM.

3 min read
SAN FRANCISCO--Oracle chief executive Larry Ellison said the database maker has struck a deal with Dell to sell its Oracle 8i appliance and is negotiating similar agreements with Compaq and IBM.

Dell will sell the Oracle 8i appliance, formerly known by the code-name Raw Iron, directly from its Web site, which should boost sales, Ellison said at NationsBanc Montgomery Securities' annual technology conference here today.

Ellison, whose company inked a similar agreement with Hewlett Packard on Friday, said the company is close to signing a similar partnership with Compaq and IBM.

"It's easier for customers to buy the Oracle 8i appliance and easier to install because it's a pre-configured box. It expands the market for us," Ellison said of the Dell deal.

Ellison touted the benefits of the Oracle 8i appliance, an Intel-based server that includes a database, and Java Web server.

The Raw Iron plan is an attempt to create a new market for database server appliances that can lower overall costs and simplify administration. The plan is also intended to blunt Microsoft's push into the enterprise software market.

Although the Raw Iron server appliances contain parts of Sun Microsystems' Solaris operating system, they will not need a separate operating system, which will further reduce management costs in comparison to Windows NT machines, Oracle claims.

Because of the lack of an operating system, the all-in-one system will make it cheaper and easier to manage than a Windows NT server, Oracle claims.

Ellison added that the company--which used to sell its products using a concurrent user model--will sell the 8i appliance based on the size and power of server processors, which can be more favorable for Web-based businesses and easier to manage for customers.

"We want it to be more like selling a Saturn car," Ellison said.

Analyst Merv Adrian, of Giga Information Group, said the Dell deal today will help Oracle's database sales. Because Dell sells directly, it forces the database company to focus on making the 8i appliance it simpler to use and install and entice customers that normally would not consider buying Oracle.

"I think for the next two quarters, it's business as usual for Oracle, but if the model takes hold, it will generate new business for Oracle. They could have a dramatic increase in volume."

"Break them up and let them compete"
Ellison also chimed in on the antitrust trial between the Department of Justice and Microsoft. He said the company should divide up Microsoft's technologies, split off the company into two pieces, and have Microsoft president Steve Ballmer and Microsoft chairman Bill Gates running separate companies.

"Break them up and let them compete," he said. "And prevent them from making acquisitions for five years."

That's important because the company should not be allowed to use the "ill-gotten" revenue they received with their monopoly, he said.

Earlier today, Sun chief executive Scott McNealy warned against breaking up Microsoft, and compared the company to a "planned economy."

When asked about the Internet stock craze, Ellison said many Net stocks are overpriced. Some Internet stocks will survive, but many of them will bomb, he said.

He added that many of the consumer-focused Internet stocks today will be replaced by Internet companies that are more business-to-business focused, where most of the revenue will be made. He added that he expects Oracle's stock price will rise once investors realize it's vital role for e-commerce. Oracle announced a 3-for-2 stock split earlier today.

Ellison also added that Oracle's Enterprise Resource Planning software stacks up well against upstart sales automation software providers such as Siebel Systems, and he expects to steal away some of their customers. Oracle has a more complete package, he said.

"They can't take on an entire job," Ellison said.