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The Oracle conspiracy

For those who attribute Machiavellian motivations to everything Larry Ellison does, here’s a doozy of a theory.

Just suppose the real endgame of the Sun Microsystems buy, when it finally becomes official, is to take hardware (and related services) off the table in large accounts. How happy would he be to block HP hardware (and services) and IBM hardware (and services) from shared accounts? Very, I’m guessing.

Assume  that Ellison takes what he’s already done to its logical conclusion: Give customers their hardware (SPARC- or Intel-based) as well as the OS (Solaris or Linux) and charge them just for the Oracle database, middleware, apps that run atop it? Months ago, Charles Phillips mentioned vertical industry appliances as a possible road to market post Sun acquisition.

It’s really the way things have been going since Oracle decided to push its $40K-per-CPU database on  cheap blades running a free OS (Linux). I’ve always wondered how long companies would pay that huge fee for software that is running essentially close-to-free hardware.

But the fact is, Oracle keeps selling–if only into its installed base. Which, in case you haven’t noticed, has grown exponentially as the company buys billions of dollars worth of software (and now hardware) companies from PeopleSoft and JD Edwards to Siebel Systems to BEA Systems to Sun Microsystems.

A source who’s spent years in IT—as a vendor exec, a VC guy—swears that this is the real plan and it has him worried.

The potential rewards are huge. If the strategy succeeds, Oracle can push a bevy of specialized appliances with soup-to-nuts stack, into accounts and circumvent HP and/or IBM both on the hardware and services front. And of course tha may or may not leave a helluva lot for Sun’s hardware partners.

If that happens, it will upend the Linux world no doubt and also put the hurt on Ellison’s once-and-again favorite whipping boy: Big Blue.

If it fails, the stakes are couldn’t be larger. It’s clear that even Oracle’s largest shops are not enamored of the company’s hard ball practices on support and service. They’re hardly likely to welcome even more vendor lock in. And there is a school of thought that holds that SQL databases are outmoded in a world of web applications. That means Oracle’s database itself could be kicked to the curb over time.

You gotta admit, it’s an interesting scenario.


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