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Oracle, Dell join forces to fight Microsoft

CEOs Larry Ellison and Michael Dell shook hands today on a deal designed to give Oracle and Dell an advantage over Microsoft in the small and midsized market.

Ramping up its battle with Microsoft another notch, Oracle Corp. today announced an agreement with Dell Inc., designed increase sales in the midmarket by bundling Dell servers with Oracle's database software.

Today's announcement represents an expansion of the existing relationship between the two companies, and reflects Oracle's dedication to attracting coveted customers in the small and midsized arena, according to Oracle CEO Larry Ellison.

This is not a scaled down version of Oracle. This is an Oracle database running on the world's fastest processors.
Larry Ellison
CEOOracle Corp.

Dell will offer Oracle's Standard Edition One database prepackaged on Dell PowerEdge 2600 or 2650 servers running on Linux and Microsoft Windows. The server-and-software bundle will be available at a starting price of $4,995 per processor or $149 per user, Ellison said, during an afternoon press conference where he and Dell detailed the deal.

As part of new agreement, Dell will have a nine-month, exclusive license for bundling Oracle's database with Dell servers in North America and Europe, Ellison said.

"This is not a scaled down version of Oracle," Ellison said. "This is an Oracle database running on the world's fastest processors. We want to create the largest market, and provide customers with more choice."

As part of the deal, Dell will also take initial support calls for customers and has agreed to resell Oracle Consulting Services to answer database-specific and migration issues.

The new deal puts Oracle and Dell on a collision course with Microsoft, which dominates the SMB market, said, said Dana Gardner, senior analyst at Boston-based Yankee Group. In turn, Microsoft wants some of what Oracle has, Gardner said.

"Microsoft wants to have an end-to-end, common data strategy, much like Oracle, where the formats for data are highly integrated from client to server," Gardner said.

About a year ago, Oracle and Dell announced a deal to install Oracle's 9i database cluster software on Dell's two-processor PowerEdge 2650 servers for Linux platforms.

A few months ago, Oracle slashed the price of its 9i Standard Edition database for SMBs in an effort to compete directly with Microsoft's SQL Server. Now Oracle is about to start a road trip, designed to help the company pitch its products to independent software vendors (ISVs).

Much of the midmarket business flows through ISVs and channel resellers, and Oracle sees this education process as a way of telling smaller customers that it cares about them, Gardner said.

Noel Yuhanna, a senior industry analyst with Cambridge, Mass.-based Forrester Research, said that the announcement Tuesday gives Oracle an advantage over Microsoft, which has frustrated some customers by delaying the release of the latest version of SQL Server 2000 database called "Yukon."

"It's an important partnership between Dell and Oracle and I think customers are going to benefit with this partnership especially since Standard Edition One has the Oracle RAC solution," Yuhanna said.

Although the deal makes Oracle more competitive to small- and medium-sized businesses, Microsoft customers won't be switching to Oracle very quickly said Kevin Kline, president of the Professional Association for SQL Server (PASS) users group and director of technology for SQL Server Solutions at Quest Software. Microsoft continues to tout its lower cost of ownership coupled with ease of manageability and ease of installation, Kline said.

"SQL Server has demonstrated that it has a lower total cost of ownership and speaking from user communities point of view, Oracle still hasn't demonstrated that," Kline said. "I don't think this will point any new customers in the direction of Oracle right away."

To provide your feedback on this article, contact Robert Westervelt.

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