Oracle price blitz 'no Lidl vs Morrisons'

Larry Ellison's attempt to undercut EMC and Cisco on converged infrastructure should not be seen as a supermarket-style price war, top partner argues

Larry Ellison has been given the thumbs up by the Oracle channel as he laid down the gauntlet to EMC and Cisco by claiming to offer lower Oracle prices on converged infrastructure.

During his announcement yesterday, the Oracle founder also introduced three new integrated appliances, which were updates of previous versions – Virtual Compute Appliance X5, Oracle FS1 Series Flash Storage System, and sixth-generation Oracle Exadata Database Machine X5.

Along with these updates, Ellison hailed a strategy of lowering prices which he hopes will help Oracle get ahead of its rivals such as EMC in the core datacentre market.

Ellison said: "We're going to compete for that core datacentre business. Our appliances and engineered systems deliver the highest performance by a large margin at the lowest purchase price for the datacentre core."

He specifically targeted EMC in his speech, claiming: "Our list price is less than half of their discount prices."

But despite the fact Oracle is dropping its prices, Andrew Norris, vice president for Oracle-engineered systems at Inoapps, believes this is not a change of strategy from the firm which has prided itself on producing best-of-breed products.

Norris told CRN: "This is not like Morrisons going to war with Lidl over the cost of bread. Oracle's idea of a price war is to build their own unique offering in a system that engineers all the parts together and their USP is you don't need to go and find the best-of-breed products from different vendors and install and manage it, we can do it all for you.

"With Larry's view when he talked about the Oracle virtual computer appliance and how it was much cheaper than an EMC and Cisco device; what Oracle hasn't necessarily done is slash their prices.

"They are pointing out that if you have to build something yourself and buy an EMC storage device, and a Cisco router and build a converged virtual appliance yourself, the cost of installing, building and managing those is going to be more than installing an Oracle virtual computer device which is already done," he said.

Norris commented that while there is an element of Oracle lowering their prices these announcements are Oracle saying it can reduce costs by putting all the different elements of an appliance together because it is the only vendor which can offer the complete range of an IT stack.

"In a way, it will give Oracle resellers an edge because it continues to play on Oracle's strategy over the last five years of building a converged infrastructure product that constitutes Oracle's best-of-breed products pulled together in one or a few machines," he added.