HP, Oracle sign thin-server deal

Hewlett-Packard's announcement this week that it will build "thin servers" based on Oracle's Raw Iron database struck another blow to Microsoft's core product and moved HP into position with the world's leading database manufacturer.

What is being billed as an alliance will spawn various server products from HP that the company is calling Internet database appliances. The systems will come pre-installed with Oracle8i Appliance software, ostensibly eliminating the need for an operating system, although the kernel of Sun Microsystems' Solaris OS is integrated with the database.

Because Sun is an archrival of HP, "it is ironic that the core of this [product] is Solaris", said Nick Earle, HP's vice president and worldwide marketing director for the Enterprise Computing Solutions Organization. "There are a few broad smiles [at HP]. But the difference between us and Sun is that they don't have the capability to produce a product out of it. We can bring it to market and they can't."

In conjunction with HP's announcement of support for the Linux operating system earlier in the week, the Oracle alliance and HP's embracing of thin servers flies in the face of Microsoft, traditionally a strong ally of HP.

In the world of thin servers, "at some point the OS becomes irrelevant: it's the application you care about," said Nigel Ball, general manager of HP's Internet and Applications Systems division. "You could argue that this hurts Microsoft."

But analysts see the alliance to be more about HP and Oracle, than HP and Microsoft.

"Raw Iron is a kind of a non-Microsoft play," said Jonathan Eunice, an analyst at Illuminata. "But it is very specifically an Oracle play. Oracle is someone that HP needed to position itself with."

If Microsoft is sweating the news, they are not letting on.

"Customers always need an OS," said Barry Goffe, lead product manager for SQL Server at Microsoft. "In the case of the Oracle database appliance, the OS is still there, they've just taken some stuff out of it. But in reality, the OS is really a very minor part of the overall cost of ownership, and it's the database that is the largest cost."

HP and Oracle officials said they believe that the thin server, or "utility computing" approach can reduce the cost of maintaining servers and significantly increase performance.

"It comes out of the box like a toaster," said Gary Bloom, executive vice president of system products at Oracle.

The first Raw Iron systems will be Intel-based NetServers from HP. Oracle and HP will jointly market them, with HP selling the final product. The Internet business servers are intended to help companies of all sizes lower costs "without the complexities of a general purpose operating system."

According to Oracle CEO Larry Ellison, Dell Computer is also planning to build the Internet database appliances, although no specifics are available. Oracle is currently in talks with Compaq and IBM.

"I imagine that a couple of more OEMs would sign up for it," Goffe said. "It's kind of a no-brainer for them. There is no downside. The proof of the concept is whether people actually buy it."

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