Oracle’s Ellison Unveils Faster System to Challenge SAP, IBM

Oracle Corp. (ORCL) introduced two new computer systems, one with faster data access and another for organizing information from the Web, as it aims to win market share from International Business Machines Corp. (IBM) and SAP AG. (SAP)

Chief Executive Officer Larry Ellison unveiled one system yesterday, called the Exalytics Intelligence Machine, that analyzes information within its dynamic random access memory. The approach makes the product many times faster than machines that store data on disk drives, Ellison said in a speech at the company’s OpenWorld conference in San Francisco.

Thomas Kurian, an executive vice president, said today that Oracle will release another system, dubbed the Big Data Appliance, to sort information collected by the open-source software Hadoop -- used for unstructured data such as e-mails and social media postings -- and load it into Oracle’s database.

Oracle -- the world’s largest maker of database software and the second-biggest maker of business applications, behind SAP -- is seeking to keep its database relevant for computing jobs that involve increasing amounts of information. Embracing open-source software tools like Hadoop may help the company hold its lead in the market as customers seek ways to sift through information from new sources, such as Facebook and Twitter.

‘New Stuff’

“When you talk about big data, this is new stuff,” said Peter Goldmacher, an analyst at Cowen & Co. in San Francisco. “It’s not cost savings -- it’s an opportunity for IT to drive growth.”

For example, companies could meld information from Twitter with customer data stored in Oracle’s database to decide which customers’ posts are most important, Goldmacher said.

The Big Data Appliance system also includes a so-called NoSQL database that can store large quantities of information from Web applications and social-media sites, Kurian said.

Responding to Ellison’s introduction of the DRAM-based Exalytics system, Sanjay Poonen, president for global solutions at SAP, said Oracle’s approach to in-memory computing requires customers to buy and maintain more hardware than a competitive SAP system, called Hana.

“They’ve taken old technology and thrown more hardware at it,” he said. “It’s another machine you have to buy.”

Hana will soon let users analyze data from the Web gathered with Hadoop, Poonen said.

Sparc Chips

Ellison also said that Redwood City, California-based Oracle plans another update to its Sparc microprocessor next year that’s twice as fast as its recently released T4 chip. The idea is to challenge IBM for more hardware sales through Oracle’s Sun Microsystems unit, gained in a $7.4 billion acquisition last year.

“We want to take IBM on in their strongest suit, which is the microprocessor,” Ellison said. Oracle’s T4 chip runs software written in the Java programming language faster in a benchmark test than a competitive IBM system, he said. The company introduced a new Sparc SuperCluster system on Sept. 26 using the Sparc T4.

Steve Mills, an IBM senior vice president, said Ellison may struggle to make inroads with the Sparc chip. Oracle would have to make billions of dollars in investments to keep Sparc competitive with IBM and Intel Corp. in the future, he said last week in an interview.

“Sparc’s out of gas,” Mills said.

Oracle’s Sun hardware sales declined 1.4 percent to $1.67 billion in the three months ended in August as it emphasized more-profitable systems over lower-priced ones.

High-End Hardware

Oracle has been pushing high-end computer hardware, including its Exadata system loaded with database software, and Exalogic, a system that runs business applications. Ellison reiterated that Oracle has sold 1,000 of the Exadata machines to companies, including Procter & Gamble Co. (PG) and BNP Paribas SA, and could sell 3,000 more this year.

Oracle is integrating its hardware and software lines to deliver better performance for various computing tasks, co- President Mark Hurd said during the conference today.

In a separate interview with “Bloomberg West,” Hurd said Oracle would focus on internal growth for the time being after making about 70 acquisitions in recent years. The company also may increase research-and-development spending this year from the $4.5 billion it spent in the fiscal year ended May 31, he said.

Hurd said he’s spending 80 percent of his time at OpenWorld meeting with customers, who are spending on areas such as mobile computing and making data available faster to their users.

“We’re very focused this second on organic growth,” Hurd said. “We feel great about our portfolio.”

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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