In my previous post on this topic I promised to take a look at how a more “vertically integrated” set of IT suppliers might change things. In this post we’ll look at the challenges faced by a combination of Oracle and Sun.
The first challenge that any company will face is that a modern IT organization is orders of magnitude more complex and diverse than in era when IBM ruled the data center. For example, most IT organizations today run tens or even hundreds of applications from a wide variety of vendors on a diverse set hardware. That’s a far cry from the IBM era when an organization might have one or two computers and a handful of applications. So the big question is whether true vertical integration all the way up the hardware and software stack for the entire enterprise is even possible today. I’m inclined to think not, because even Oracle only has a handful of the applications needed by a modern enterprise
So if full vertical integration isn’t an option, the key questions are “how far up the stack can Oracle go?” and “does the convenience of vertical integration for part of the IT environment offset the issues of vendor lock-in and higher upfront purchase costs?”
The answer to the first question is that Oracle could offer a well integrated stack for Oracle databases and any applications from Oracle that live on top of that Oracle database. Using Sun’s hardware and operating system (along with OEM products like the Hitachi Data Systems enterprise arrays) they have access to a complete suite of enterprise hardware and system software. The problem is that much of that hardware is not widely used in the enterprise and many IT organizations have long since made the choice of another supplier, so Oracle has to persuade them to rip-n-replace a significant chunk of their infrastructure in order to benefit from integrated Oracle solutions.
The answer to the second question will depend a great deal on the previous choices made by an IT organization. For example an IT organization running Oracle on Sun hardware using Sun storage products may find the idea of tighter integration quite attractive. On the other hand an organization using HP servers and EMC storage to underpin it’s Oracle applications may not be interested at all.
An area of particular concern is the hypervisor, given Oracle’s recent acquisitions, it’s clear that they want to be a player in the server virtualization world. The problem is that many large enterprises are already deploying VMware ESX and to a lesser degree Microsoft HyperV and Citrix XenServer along with a suite of tools to manage the virtual environment. If Oracle fails to displace these products and becomes a “virtualization island” with it’s own set of management tools, then much of the vertical integration advantage disappears, as IT organizations are forced to work with two sets of tools, one for Oracle solutions and one for everything else.
Posted by: Nik Simpson