clock menu more-arrow no yes mobile

Filed under:

Oracle's Ellison Picks Data Center Hardware Fight With Cisco

A promise to compete not only on performance, but price.


If there’s one thing Oracle founder and CTO Larry Ellison loves, it’s a fight with a rival. He likes them so much he’s known for publicly needling his company’s competitors almost every time he’s near a microphone.

Today his target was networking giant Cisco Systems and its Unified Computing Systems. The occasion was the launch of the latest generation of Oracle’s computing hardware aimed at corporations, which it calls its Engineered Systems.

It’s in this market segment — sometimes called “converged infrastructure” — where Oracle and Cisco compete. The basic idea behind both Cisco’s UCS and Oracle’s Engineered Systems is to build specialized hardware that packs three primary pieces of a corporate data center into a single piece of equipment: Computing, data storage and networking. Last year Gartner estimated the size of the marketplace for this kind of IT hardware at $6 billion.

In Cisco’s case, the UCS product is one it builds in cooperation with storage company EMC and data center software company VMware, and together they’ve done well. In a report issued last year, research firm Gartner gave the trio the highest marks in its closely watched “magic quadrant” study of the space.

Oracle was not far behind. One reason: Everything about its machines is Oracle-designed, so the hardware is tied tightly to Oracle’s software. Ellison has occasionally likened its approach to Apple’s — owning the hardware and the software in order to make sure the user gets the best experience.

That gave Ellison some of the leverage he used in his pitch at Wednesday’s event at Oracle HQ in Redwood City, Calif.: Oracle’s machines are designed by a single vendor, which in the end makes life easier for customers. “We’ve engineered all the pieces to work together, and we test all the software to work with the hardware,” he said. Relying on a system assembled with parts from three different vendors is more complex in the end, he argued.

With the new systems he also promised to beat Cisco on price. For example, Oracle says its Virtual Compute Appliance X5 is 50 percent less expensive to buy than a comparable Cisco product. Oracle has tended to lead Cisco on overall computing performance in this segment, Ellison said, but Cisco has been more aggressive on price. He promised to change that.

“We will compete with Cisco by delivering not only the highest performance virtual computing appliance machines in the industry, but now with the lowest price by far,” he said. “Our old strategy was to offer the highest performance and the best cost for that performance. … Now it’s highest performance with the best list price. We’re just trying to make the decisions easier.”

Cisco of course didn’t suffer Ellison’s jabs in silence. Paul Perez, VP and general manger at Cisco’s UCS data center business, reached by Re/code offered the following: “We feel pretty good about our hand in the converged infrastructure market. … This is a market Cisco created with EMC back in 2009 with a joint venture that became one of the most successful in IT history. … Oracle has a lot of catching up to do.”

This article originally appeared on

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.