Oracle uses Dell to crack SME market

07-04-2004

by Martin Lynch

Oracle is hoping to take on Microsoft in the lucrative SME arena with a deal to bundle a shrink-wrapped version of its database on Dell servers.

The deal, which builds on an existing relationship from last year, will see Oracle's Standard Edition One database sold alongside Dell's PowerEdge 2600 and 2650 servers. Initially, servers will come with the CDs bundled and customers will have the option of entering into a licensing arrangement with Oracle by "simply breaking the seal."

The server bundle is available for Red Hat Linux and Microsoft Windows with prices starting at USD4,108, with Oracle claiming that it is cheaper than Microsoft's equivalent SQL Server. Later in the year, Dell will pre-install the database on servers running Red Hat Linux and Windows operating systems.

The deal makes Dell the first Oracle partner to deliver a shrink-wrap packaged offering of Standard Edition One and, according to both companies, the arrangement will remain exclusive to Dell.

Both companies are targeting the solution at SMEs claiming that Standard Edition One can be deployed on a single, dual-processor server while promising easy installation and management. Ease-of-use will be a key factor in the success or failure of the joint venture.

"We can help customers administer the system so they don't need a database administrator," said Oracle CEO Larry Ellison in a conference that also involved Dell CEO, Michael Dell. "It's all about delivering a system that's not only inexpensive to buy but easy to use and has low total cost of ownership. It's a combination of our relationship with Dell and that technology that makes us now ready for this [SME market]," Ellison added.

Michael Dell said that his company earns around USD500 million a year in database server revenue and claimed the new deal will help boost that significantly. "We think that in the next couple of years that's going to grow to about a USD1 billion business for us, in terms of the hardware."