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

Charles King, principal analyst with Pund-IT, told eWEEK he agrees in general, but with a couple of caveats.

"To my mind, Oracle's efforts reflect old line thinking of a sort -- with the company owning or having its fingers on every piece of the business datacenter infrastructure and services chain, including hardware, software, middleware and services," King said. "In a sense, what Ellison is envisioning hasn't been previously accomplished; virtually every major IT vendor partners with someone.

"In LarryWorld, partners are relegated to developers who build on Oracle's platform. Cisco is approaching the future in a much more collaborative way, working closely with partners including EMC, VMware, NetApp and others. In fact, the company's Unified Computing concept is broad enough that most any vendor of storage x86 servers (though Cisco is, of course, planning their own offerings) could play a part."

Dave Vellante, an analyst with Wikibon, told eWEEK that he agrees that Oracle and Cisco are on similar tracks -- not parallel, but very similar.

"Here's the biggest similarity in my view: The IT business is becoming an oligopoly [a market form in which a market or industry is dominated by a small number of sellers] where IBM, HP, Cisco, Oracle and Microsoft really rule," Vellante said. "Any move that any one of these vendors makes will have ripple effects throughout the industry.

"You can make a case that Dell and EMC/VMware are on that list, but these five are the big dogs with $100 billion revenues and/or market valuations. The data center stacks are integrating, and big companies are aggressively acquiring to integrate stacks because they can't innovate (in house) fast enough."

Cisco has quite an appetite for acquisitions, and clearly that's always been part of its growth strategy, Vellante said. "Cisco also wants/needs to diversify; Oracle, on the other hand, sort of fell into this position which in my view occurred as a defensive play," Vellante said.

"Specifically, there was no way Oracle was going to let Java get into the hands of IBM or any other competitor, because Oracle software is developed in Java," Vellante said. "Ellison has always seen the value of integrated hardware and software (e.g. Apple), and I think saw this as an opportunity to continue to play with the big guns in the industry."

Is this potential IT oligopoly good or bad for business overall?

"In some respects, it marks the beginning of a long, slow consolidation period," Vellante said. "I think it can be bad for innovation, but good for stability. Customers like stability, so that's good, but growth requires innovation."

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