Dropping Itanium Will Help Oracle to Gain Hardware Customers - Business Analysts

TBR: Oracle's Decision - A Business Move

by Anton Shilov
03/24/2011 | 07:06 PM

Oracle's decision to drop support of Intel Corp.'s Itanium platform with its business software was motivated by business reasons and was an attempt to gain additional customers for mission-critical Sun SPARC server platform, says Technology Business Research, a technology market research and consulting firm specializing in the business and financial analyses.

 

According to TBR, Oracle made a measured decision to drop support for Itanium processors because this processor directly competes with its own UltraSPARC-based servers. The shift will give Oracle an opportunity to try to shift customers to SPARC servers as it is the core product in Oracle’s high-margin hardware strategy. But the move definitely impacts Oracle's image in the eyes of its own customers.

"Oracle de-emphasized commodity hardware, but continues to provide strong software support for the x86. HP-UX customers will feel the hit as HP-UX runs specifically on Itanium processors. HP announced that it would continue to support Itanium; however, the move places customers in a precarious position with Oracle software as they may not be able to upgrade," said Jessica Breen, an analyst for enterprise software for TBR.

Oracle on Tuesday said it stopped developing software for Intel Itanium-based platforms due to the fact that the Itanium was nearing the end of life. The company said that Intel and HP were going to can the mission-critical server platform in favour of more traditional x86-64 that was gaining RAS [reliability, availability, scalability] features. Both HP and Intel denied such a plan claiming that the IA64 roadmap spanned for more than a decade. Oracle noted that a number of hardware and software companies had already dropped the Itanium. Still, Oracle is motivated to cancel development of software for Itanium in order to promote its own SPARC platform.

"The Itanium disruption will allow Oracle to gain hardware customers among existing software subscribers; however, the aggressive move will also enable competitors IBM to provide alternative options to customers who are unhappy with Oracle’s tactics. Ultimately, TBR believes the disruptive Itanium tactic will only drive a partial transition from Itanium to SPARC as competitors capitalize on an opportunity to poach unhappy customers," said Ms. Breen.

But while the Oracle's move may influence sales of HP's Intel Itanium-based machines (and cause questions to HP's sales people), IBM remains the strongest alternative to SPARC with its Power-based servers, notes TBR.