Oracle, Cisco on Path to Challenge IBM, HP in Enterprise Data Centers

By Chris Preimesberger  |  Posted 2009-10-19 Print this article Print

News Analysis: Oracle and Cisco Systems are working on entirely separate, but similar tracks in long-term efforts to become full-service systems providers on par with IBM and Hewlett-Packard. Oracle, a 32-year-old vendor of database and enterprise application software, will get a lot closer to that goal if it gets final regulatory clearance to close its $7.4 billion acquisition of server and storage manufacturer Sun Microsystems. Meanwhile, networking equipment vendor Cisco Systems, at 25, is focusing on its Unified Computing System initiative to expand its presence and influence in corporate data centers.

Oracle and Cisco Systems are rolling hard and fast on separate but parallel tracks to become full-service systems providers that want to enjoy the international business reputations and prestige of IBM and Hewlett-Packard.

As "full-service system providers," Oracle and Cisco would have to demonstrate the ability to deliver and assemble all the hardware, software and services needed to build an enterprise IT system or a new data center.

Oracle, due largely to its planned $7.4 billion acquisition of Sun Microsystems, is a 32-year-old database and middleware software company aiming to become a new-generation systems vendor.

Cisco Systems, at 25 years of age, is primarily a networking hardware company that, behind its new Unified Computing System initiative, is evolving into its own network-centric systems company. 

Both corporations are acquisition-oriented, each having added a number of companies in the last few years to build out their product lines. Both have charismatic chief executive officers [Oracle's Larry Ellison, Cisco's John Chambers]. Both are No. 1 in their specific market sectors; both are headquartered at IT's Ground Zero in Silicon Valley.

Each has played a major role in the growth and maturity of enterprise IT. Oracle rules supreme in the enterprise parallel database and middleware businesses; Cisco invented and has produced much of the networking equipment that serves as the framework for business on the Internet.

That's not all. Both have outgrown their primary market segments and must add incremental markets to their mix. They're like sharks that can't stop moving, needing more and more water through their gills and food in their stomachs to grow.

So, here's the theorem: Oracle, in Redwood City, Calif., and Cisco, about 15 miles south in San Jose, may have started under completely different circumstances at different times, but they are clearly aiming at the same target: The top couple of steps on the IT systems ladder.

True or false?

"Yes, I agree wholeheartedly with your assertion," David Hill, principal analyst with The Mesabi Group, told eWEEK. "Not all high-technology companies feel the compulsion to grow, but high-profile companies, such as Oracle and Cisco, want to grow -- because their executives want to reap the rewards of growth, but also because financial analysts, in particular, and the investment community, in particular, expect it of them."

As a "big fish in a size-limited pond, each has to grow outside its current market pond," Hill said.

"Moreover, the decision in enterprise IT infrastructure purchases is often about what bundle of products and services that they need (say for the new generation of data center) and individual products may be left out (even if they are the better products)," Hill said.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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