Larry Ellison doesn't do "cheap." The Oracle chairman isn't interested in selling the low-cost one- and two-socket servers that make up a huge slice of the server market but yield little profit for the companies that make them. Even if he did, that business is pretty much sewn up by Hewlett Packard Enterprise, Dell, and the "white box" makers from China and Taiwan.
But Ellison's also a realist, and he knows customers are gradually turning away from his pricey Unix systems in favor of x86 boxes to build scale-out private and hybrid clouds. So to keep customers interested in Sparc, Ellison needs to come downmarket and provide more affordable options.
That's the thinking behind a new Sparc processor Oracle launched Wednesday, along with a new family of servers that hit lower price points than Oracle has offered in the past. They're not the cheapest of the cheap -- prices start at around $11,000 -- but core for core, Oracle maintains they're on par with x86 for cost.
"This gets us into commodity priced platforms," said John Fowler, the executive in charge of Oracle's systems business.
Kevin Krewell, an industry analyst at Tirias Research, sees the new systems as a defensive move to stem the flow of customers away from Sparc and Oracle's Solaris OS. "They're trying to hold on to existing customers," he said.
That's important for Oracle. Its hardware business generated $4.7 billion in revenue last fiscal year, down 32 percent from 2011, the first full year after Oracle bought Sun. That figure includes money from hardware support services; revenue from hardware alone plunged 44 percent over the same five-year period.
Part of that was by design. Oracle stopped selling many of Sun's lower-end products and focused on "engineered" systems -- high-performance products that yield bigger profits and help sell more of Oracle's database and applications software.
But developing new microprocessors is a costly business, and ultimately, Oracle needs to maintain a sizable hardware business to make continued investments in Sparc worthwhile.
The new processor is called the S7, a less powerful version of Oracle's high-end M7 chip launched in October. Oracle sketched out plans for the chip last year under the code name Sonoma, and it launched the first products on Wednesday atOpenWorld in Brazil.
The S7 is based on the same fourth-generation Sparc core as the M7, and it's manufactured on the same 20-nanometer process. But there are eight cores per chip on the S7, compared with 32 on the M7.
Like the M7, the new chip has "software in silicon" features for accelerating database and security functions. But it also integrates memory and I/O interfaces that for the M7 are separate on the motherboard, helping to keep costs down. There's just one version offered, at 4.27GHz.
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