BOSTON (Reuters) – Oracle Corp (ORCL.O: Quote, Profile, Research, Stock Buzz), the world’s No. 3 software maker is teaming up with Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz) to sell powerful, specialized computers that companies use to analyze data on their business activities.
The move, which Oracle Chief Executive Larry Ellison announced onWednesday, will expand Oracle’s footprint in the hardware business andput pressure on smaller players Teradata Corp (TDC.N: Quote, Profile, Research, Stock Buzz) and Netezza (NZ.P: Quote, Profile, Research, Stock Buzz), which specialize in selling those devices, known as data warehouse appliances.
Forrester Research analyst James Kobielus said that the machines arethe most powerful data warehouse appliances that Oracle has everdeveloped. The products will help the company better compete withTeradata, whose machines have been able to crunch more data than onesfrom Oracle, he said.
"Oracle needed to scale out on the high end," Kobielus said.
But he and some other analysts said that there may not be huge demand for appliances with so much capacity.
"Pretty cool stuff, but it will likely have limited market reach,appeal," said Sageza Group analyst Clay Ryder. "The real question isjust how many customers are there for a solution of this scale andperformance?"
Kobielus of Forrester Research estimates that Oracle and its rivalssell some $9 billion in data warehousing software, hardware andappliances each year, a market that is growing at an annual clip ofabout 15 percent. Oracle has the largest share, followed by Teradata,then IBM, he said.
Companies use data warehousing equipment to store and analyze crucial data from customers and transactions.
Phone companies looking to sell existing customers new productsmight look for clues on possible needs by analyzing call patterns witha data warehouse. Credit card companies store information ontransactions, which allows them to quickly review new purchases in abid to instantly identify fraud.
Redwood City, California-based Oracle has previously developedless-powerful data warehousing appliances with HP as well as hardwarevendors IBM (IBM.N: Quote, Profile, Research, Stock Buzz), EMC Corp (EMC.N: Quote, Profile, Research, Stock Buzz), Dell Inc. (DELL.O: Quote, Profile, Research, Stock Buzz), Silicon Graphics Inc (SGIC.O: Quote, Profile, Research, Stock Buzz) and Sun Microsystems (JAVA.O: Quote, Profile, Research, Stock Buzz), analysts said.
Charles King, an industry analyst with Pund-IT Research, said thatthe products announced on Wednesday appeared to be similar to onesdeveloped with Sun that were announced at Oracle’s users conference inNovember 2007.
Hardware appliances account for a relatively small share of revenueat Oracle, the world’s largest maker of computer database software. Itgets virtually all of its sales from computer programs and relatedservices.
Hewlett-Packard will manufacture the devices and Oracle’s salesforce will sell them.
Palo Alto, California-based HP, one of Oracle’s closest businesspartners, ships more servers than any other computer manufacturer.
Netezza Chief Operating Officer Jim Baum said that he is not concerned about Oracle’s new product.
"You just can’t slap together existing solutions in clever packagingand expect to deliver much faster performance," he said in a statement.
(Additional reporting by Eric Auchard and David Lawsky in San Francisco; editing by Carol Bishopric)
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