Oracle Taking A Lesson From Apple

Apple has built a reputation for functional, high-quality products by closely integrating hardware and software.

Its Macintosh computers run the Mac OS X operating system. Its iPods and iPhones run their own custom software and integrate with the iTunes music, video and apps stores.

Oracle appears to be building its own strategy around hardware and software integration, and on Tuesday CEO Larry Ellison said the first attempt at integration is proving a success.

“Exadata is actually our first experiment,” he explained on an evening conference call with analysts. “We expect sales to accelerate.”

Already, quarterly sales of the database machine for data warehouses place it among Oracle’s top product introductions, he added.

The implications for the company are profound with its pending acquisition of Sun Microsystems. Oracle has been rumored to be shopping around Sun’s hardware business, suggesting it is mostly interested in the computer maker’s software properties, such as Java, MySQL and perhaps, Solaris.

But if it is facing up to keeping the hardware business, its integration strategy could create shockwaves across the industry and especially for competitors Hewlett-Packard and IBM. They, too, might be forced to think more about the propriety nature of their products and less that one box is an easy substitute for another.

That might be easier for IBM, with its diverse software business, but more of a challenge for H-P.

It would also force the remaking of Oracle into an Apple-like vendor of hardware and software – no easy task for company with a history of software-only development.

On Tuesday conference call, President Charles Phillips Jr. suggested Exadata is an example of how Oracle will knit Sun’s hardware and Oracle’s software together. “We’re pretty excited,” he said.

Exadata is a relatively new product, added Ellison, but four-quarter customer wins against competing products from IBM, Teradata and Netezza include some long established companies – including one California computer and phone maker.

There was little mistaking the veiled reference to Apple.