Oracle has big plans for virtualization. But the market may not have big plans for Oracle.
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The Oracle virtualization portfolio got a boost with Oracle's $7.4 billion Sun Microsystems acquisition, and the company has signaled a willingness to take on VMware, the market leader. Many are skeptical, based on Oracle's very late push into the market.
But even some of these skeptics acknowledge that Oracle VM 3, expected this spring, will give Oracle credible Xen-based server virtualization that could challenge VMware, Microsoft and Citrix Systems Inc.-- at least in the tens of thousands of Oracle database and application shops.
"Oracle VM 3 really does have some promise," said Chris Wolf, virtualization analyst with the Burton Group. "VMware is still dominant -- even in the data center where Oracle lives -- but in organizations where a separate group manages the Oracle infrastructure, there's an opportunity."
Oracle virtualization needs credibility
Oracle still needs to prove Oracle VM's credibility, but some IT administrators said the idea of a one-stop support call for multiple parts of the stack is attractive -- especially because Oracle has resisted certifying and supporting VMware running in Oracle shops.
Oracle still needs to prove Oracle VM's credibility.
Tucson Electric Power (TEP), a subsidiary of UniSource Energy Corp., runs Oracle applications on Sparc Solaris systems using Sun's logical partitions and Containers virtualization, but it runs VMware on its x86 systems.
The downside of combining "Oracle and VMware on x86 is that Oracle doesn't license very well for VMware," said Scott Myers, a senior systems administrator at TEP. "They're trying to steer you to [Oracle] Unbreakable Linux [and Oracle VM]."
TEP intends to stick with VMware on x86, but Myers said a single point of contact to support the full software stack is an attractive proposition.
The number of shops that, like TEP, run some Oracle product today represents a huge potential customer base in the virtualization market. Consider the following:
- The company rules the database market. Gartner's latest numbers show Oracle with a 43% share of market revenue, compared with 24% for IBM, and 18% for Microsoft.
- In enterprise applications (enterprise resource planning, customer relationship management, etc.),Oracle, with its PeopleSoft, JD Edwards, Seibel Systems acquisitions along with home-grown Oracle apps, vies with SAP for the market lead.
- With its acquisition of BEA Systems, Oracle has become a leader in application servers and middleware.
Oracle: Its own worst enemy
Still, many Oracle accounts resist the idea of this soup-to-nuts sale. They don't want to commit any more of their IT infrastructure to Oracle than they already have. That means they're not interested in freebies like Oracle VM or Oracle Linux, said an executive at a large Oracle partner on the West Coast who requested anonymity.
This pushback comes despite the fact that, in theory, use of Oracle virtualization could save these shops a lot of the money that they now spend on VMware.
"No one believes this [Oracle] stuff will remain free out of the goodness of Larry's heart," the executive said, referring to Oracle CEO Larry Ellison. "The feeling is, once he gets you hooked, he'll screw you."
This concern over vendor lock-in has soared in many Oracle shops since the Sun deal closed.
"That's why Oracle Linux has not taken off," the executive said. "We were working with a customer to move more of its low-end database tasks to [Sun's] MySQL as a hedge against Oracle, but that stopped dead once the Sun deal happened."
Despite this customer pushback, it's important to remember that Oracle has had success foreclosing third-party vendors in other parts of its stack.
"Look at Veritas," said Scott Jenkins, the CEO of the EBS Group, a Lenexa, Kan.-based Oracle partner. "Many, many Oracle shops ran Veritas for backup, then Larry [Ellison] declared war, and that all changed. Anyone who competes [with Oracle] for license dollars Larry's either going to kill or buy."
Another Oracle partner said he hasn't seen Oracle virtualization in many accounts, but he would expect companies to at least test the free offering. He acknowledged, however, that there's always a fear among customers that Oracle will jack up prices.
Still others said there's no way to know how entrenched Oracle VM is -- or isn't -- because it's a free download. Francis Poeta, the president of P & M Computers Inc. , an Oracle partner in Cliffside Park, N.J., said there's a lot of Oracle VM tire kickers out there.
Oracle virtualization and cloud computing
It's also worth considering Oracle virtualization in the context of the shift to cloud computing.
At an Oracle cloud event in San Francisco last week, Rex Wang, the vice president of marketing at Oracle, said the company has talked with Amazon Web Services (AWS) to get the cloud provider to support Oracle VM.
Today, the majority of public cloud service providers -- including Amazon, Rackspace, GoGrid and Joyent -- all use the open source Xen hypervisor for virtualization. Oracle VM is Xen-based, making it a friendlier option for Amazon Web Services and other cloud providers that have already built their infrastructure on Xen.
Oracle is keenly aware of this fact but declined to give any more details on its strategy. An AWS spokesperson also declined to comment.
Xen's popularity among cloud providers creates a disconnect for enterprise IT shops that are interested in using cloud services, because most of them run on VMware's proprietary (and incompatible) hypervisor technology. To combat this disconnect, VMware is busy persuading new cloud providers to support its architecture instead of Xen. In June 2009, for example, the company bought a $20 million stake in Terremark, which now runs exclusively on VMware.
One of the biggest issues with virtualization is reverting back to physical systems when problems occur, users at the Oracle event said.
"Oracle will insist you run on a physical system, not on VMware, before they will test for any bugs," said an IT solutions architect with Deloitte and Touche.
The problems with this approach would be magnified in the cloud, which uses both internal and external computing resources, he said.
Some solution providers said virtualization is yet another area where power and market share will shift to existing technology leaders. VMware, under CEO Paul Maritz, has moved beyond server virtualization -- a sign that even the market leader knows the days of a virtualization-specific company are numbered.
Another Oracle partner subscribes to this view. As the platform and application software giants -- Microsoft, Oracle, etc. -- get their own virtualization stories right, he said, the need for a separate third-party virtualization vendor evaporates.
News Director Alex Barrett contributed to this report.