Dell and Oracle cluster up

Dell Computer on Wednesday joined hands with software maker Oracle to build computing clusters.

Dell will offer new clusters based on its servers, Oracle's 9i database software and the Linux operating system. The two companies will also work together to create a new suite of professional services related to clusters. The new agreement, which expands a five-year partnership between Dell and Oracle, lets Dell sell Oracle software on its servers outside the US.

Dell CEO Michael Dell, speaking at a press conference in New York, said the deal furthers the company's goals of offering more computing performance for customers that use standard components such as Intel processors and Linux operating systems.

"We've done quite well in selling Intel-based servers for file and print, internet infrastructure and [Microsoft] Exchange and messaging but this widens the opportunity in a database-type environment," said Terry Klein, vice president of Dell's Advanced Systems Group in an interview with News.com.

Clustering is the art of tying together large numbers of standard computers, switches and storage systems into functional supercomputers. Clusters have become popular of late as they can create a large amount of computing power on the cheap. Unlike traditional supercomputers, which cost millions of dollars, clusters can be built and upgraded by using off-the-shelf items.

Dell, which has sold a large number of clusters recently, loves clusters particularly because they help sell a lot of servers.

Dell is looking to sales of servers, storage systems and professional services to install and maintain them to further its goals of doubling revenue over the next few years and increasing its market share. Dell believes that while its market share stands at around 15 to 16 per cent now, it will be able to corner 30 to 40 per cent of the world PC market in the future.

One of Dell's largest computing clusters resides at the State University of New York at Buffalo. That cluster includes more than 2,000 Dell PowerEdge servers running Red Hat Linux.

Analysts said it's no surprise that Dell and Oracle broadened their agreement. The companies targets similar customers - businesses that want to move their data to Intel-based hardware - and the deal enables them to combine forces to reach these customers.

"What we have here is a growing commitment between the two companies, as they both believe they'll be able to build [sales] volume on the migration of legacy data over to industry standard platforms," said Brooks Gray, analyst with Technology Business Research.

The new Dell-Oracle clusters will start at $18,000, the company said.

That price includes two dual-processor Dell PowerEdge 2650 servers with direct-attach SCSI storage, the Oracle software license and two years of gold-level support, which includes 24 hour, four-hour response-time service, Dell said.

Meanwhile, the new service offerings will centre on a combination of hardware planning and implementation expertise from Dell and software knowledge from Oracle.

The announcement came before Dell's annual financial analysts meeting, scheduled for Thursday morning. There, Dell is likely to update analysts on its goals for revenue, profits and market share gains as well as its latest products for business customers.

Dell may also update its financial outlook for its first fiscal quarter of 2004, which ends this month.

Analysts polled by earnings tracking firm FirstCall expect Dell to stick with its previous guidance of a profit of 23 cents per share on revenue of $9.5bn.

In separate news Wednesday, Dell said the first Dell/EMC CX200 storage system to be manufactured has rolled off the production line. The CX200, which caters to the entry level of the network storage market, was created by the two companies under a partnership begun in 2001.

John G Spooner writes for CNET News.com