Oracle CEO Ellison Announces ORCL Database With Sun Hardware

Oracle Corp. (ORCL) Chief Executive Larry Ellison Tuesday showcased a machine that integrates Oracle's database software with the hardware of Sun Microsystems Inc. (JAVA).

Redwood City-based database giant Oracle, which announced it would buy Sun in a $7.4 billion deal in April, is starting to see the benefits of combining Oracle's software with Sun's hardware, while the deal is still awaiting regulatory approval.

Oracle is under mounting pressure to map out its plans for Sun's future as some Sun customers defect to rivals, but its ability to do this is hampered by an ongoing investigation by European Commission antitrust authorities. The EC said earlier this month it was triggering a more detailed investigation into the deal, citing "serious concerns" about the possible impact the deal could have on the database market. The investigation could take up to four months.

Tuesday, Ellison said Oracle would launch what he described as the world's first online transaction processing database machine, Exadata version 2, which incorporates Oracle's software with what is known as FlashFire technology from Sun Microsystems.

In a presentation which also included John Fowler, a senior executive at Sun Microsystems, Ellison said the computer, which handles both online transactions and data warehousing, is twice as fast as its predecessor, version 1, and faster than most machines made by rivals including computer giant International Business Machines Corp. (IBM) and database specialists Netezza Corp. (NZ) and Teradata Corp. (TDC)

Oracle's key competitors, such as IBM and Hewlett-Packard Co. (HPQ), have been aggressively pursuing Sun's customers since the deal was announced, seeking to take advantage of confusion among Sun's customer base about the future of Sun's product roadmap.

IBM claims to have won over 250 customers from Sun in the first six months of 2009 and says customer defections have accelerated since Oracle's acquisition was announced. Sun saw its share of the global server market decline by more than one percentage point in the second quarter of 2009, according to technology research firm IDC.

It's unclear whether Oracle's decision to publicize details of its collaboration with Sun is taking place with the knowledge of regulators. According to one Brussels-based lawyer, companies are typically restricted from engaging in detailed strategic planning while a deal is still being considered.

Ellison said, however, that the partnership had been in the works for some 15 to 20 years.

Oracle shares closed down 0.3% at $22.66 Tuesday.

-By Jessica Hodgson, Dow Jones Newswires; 415-439-6455; [e-mail]