Anyone responsible for making data center IT investments must be watching the escalating row between Oracle and HP with intense interest. 

While the data center industry rightly puts much emphasis on the long term nature of facilities infrastructure investments which stretch over a decade and more, it should not be forgotten that on the enterprise IT side, long term investments are also being made and vendors rely companies being tied into their vision. When looking at strategic IT investments what every CIO ( and CFO) wants to know about is the product roadmap. As technology converges, this has never been more important.

The extraordinary events of summer 2010 which saw the exit of Mark Hurd as CEO of HP are rumbling on and as things get legal the latest moves must be raising questions among many budget holders about the roadmap for Oracle database and applications on HP hardware. The road ahead, which yesterday seemed clear and direct, now looks vague and uncertain. 



Mr Ellison: Sabre rattling in defence of his friend

At the top of major corporations it is all about relationships and as loyal as he is to his friend, would Oracle CEO Larry Ellison threaten one of his biggest partners - HP represents a major route to market for Oracle products - without having a back up plan? 

It seems implausible that Mr Ellison would show disregard for his own shareholders by splitting with a strategic partner without having a viable alternative. That leads to the question, who would make a viable strategic partner? In the server world there are only IBM, Dell and Fujitsu operating at scale. But Cisco last year moved its tanks onto the server market lawn, ripping up a long term alliance with HP in the process.

One possibility is that there are already Oracle missions despatched to Cisco's HQ which is just down the road from Oracle's headquarters in Redwood Shores CA in San Jose, CA to discuss greater collaboration between Oracle's Sun server division and Cisco's Unified Computing System (UCS) team. 

Whether one adheres to the cock up or conspiracy view of history, the recent history of the IT industry is one of strategic alliances and broken partnerships.

Swift declaration

Ellison's swift declaration that HP's application for an injunction to stop former Mark Hurd from joining Oracle as President threatens the partnership between the companies fits the definition of sabre rattling. 


Hurd: Has joined Oracle despite HP's writ

HP's writ says that by accepting the appointment Mr Hurd has breached the terms of his exit settlement agreement and that it is seeking to protect its trade secrets. 

The statement from Oracle's CEO was direct: "Oracle has long viewed HP as an important partner. By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace."

Mr Ellison's veiled threat is again directed firmly at the HP board which he says is making it 'virtually impossible' for Oracle and HP to continue working together. 

This echoes Mr Ellison's letter of August 9th in support of his friend which didn't pull any punches in its criticism of the HP board. Though he didn't name any names he cited six directors who apparently voted for Mr Hurd's exit. 

Data center arms race - some recent background

When Cisco announced its UCS in March 2009 DatacenterDynamicsFOCUS (Focus Issue3 April 2009) said it would spark an arms race as vendors aligned into separate pacts. 

At the outset Cisco lined up EMC, VMware, BMC and Accenture as its partners. HP subsequently announced a strategic alliance with Alcatel Lucent. 

Not long after Cisco's HP and the networking giant announced that they would cease working together on product roadmaps. 

As enterprise IT has trended towards convergence these partnerships (and in the absence of partnerships, acquisitions ÔÇô witness the recent bidding war between Dell and HP for 3Par) - have become increasingly important. 

But one man's alliance is another man's treason. 

Will we see Cisco/Oracle Sun pact? 

Cisco's UCS is based on Intel's 5500 series Xeon processors and while Cisco hasn't made any serious inroads into the server market as yet, it clearly saw its best chance of success as being an Industry Standard Server X86 architecture. 

One question is how reliant on Intel does Cisco want to be? 

When Oracle bought Sun for $7.4bn in April last year, there was much comment about what would happen to Sun's hardware business. Sun does have an alliance with Fujitsu for its Sparc based machines but as with its own sales these are stuck at the softer high end market. See the recent IDC server figures which show that even in a growing market Oracle has been losing market share and revenue. (See table below.) The trend over many quarters that saw Sun struggling against HP, IBM and Dell as their Intel servers ate into its traditional proprietary mid and high end market has not been reversed by the Oracle acquisition. 

Prior to Oracle's swoop IBM had been in talks to buy Sun but the deal was aborted. 

Everyone asked what would Oracle do with a hardware company and the perceived wisdom was that Ellison, being a software man himself, was buying Sun for its Java and Solaris software. Just last month Oracle detailed  its roadmap for Sun though it was noted at the time that most of the emphasis was on the Solaris operating system and not on the future of its Sparc architecture. Through Sun, Oracle also has a storage business in StorageTek and it too has a convergence offering covering server, O/S, application and database and storage. The missing piece is networking.


Cisco's Chambers: Changed the server battleground

This time it's personal 

Now with this latest row it could be that Oracle will pair up with Cisco. Having a second front in the server war wouldn't do Cisco any harm and in terms of the global server market Sun's Intel based business is negligible. 

How well Cisco CEO John Chambers knows either Mr Ellison or Mr Hurd is unknown, as is whether the quietly spoken man from Ohio wants to sit around a table with the quintessential playboy CEO and his best friend. 

But Mr Chambers has form when it comes to taking on HP. Mr Hurd was in charge HP when he effectively shredded its partnership thanks to the UCS launch. 

Now that circumstances have changed in such an unpredictable way, will former friends who became adversaries now combine again to take on HP? 

Whether or not Mr Hurd succeeds in joining his friend at Oracle, Cisco must be considering whether 'my enemy's enemy is my friend.'