Dell and Oracle launch assault on $1bn app server market

By Wylie Wong

Dell customers will soon be offered access to Oracle's application server software - technology that runs ebusiness and other Web site transactions - as part of a joint alliance that will be unveiled later today.

Analysts say they expect Dell will help Oracle make further inroads into the $1bn-a-year market for application servers, crucial software that's become a standard piece of ebusiness infrastructure. Oracle ranks third with 12 per cent of the bundled application server market, behind leaders IBM and BEA, according to analyst firm Gartner.

"The challenge for Oracle is to try to sell its application server (software), not to Oracle shops, but to new accounts, so the Dell partnership will help them there," said analyst Shawn Willett of Current Analysis.

Oracle has turned to the application server market to augment sales of its flagship database management software. Oracle bundles extra features into its application server, including portal software that allows companies to create Web portals for their employees, customers and business partners.

The new deal expands Oracle's existing relationship with Dell. In June, Dell certified its PowerEdge servers to run on release 2 of Oracle's 9i database software and Red Hat's Linux Advanced Server. In that collaboration, the three companies developed new Linux clustering technology that allows businesses to harness multiple servers to run a very large database. The technology allows servers to share the work or take over from each other if one fails.

With the new deal, Dell customers can also turn to Dell to buy Oracle's 9i application server software, said John Magee, vice president of product marketing for Oracle's 9i application server and tools. The Dell partnership allows Oracle to sell to mid-sized companies - a growing, lucrative market that the database giant has been targeting. Oracle has historically sold a greater amount of its software to large corporations.

"This gets our 9i application server into the mid-market - the smaller-sized companies - that Dell targets," Magee said.

Dell, which has an existing relationship with IBM, also sells IBM's WebSphere application server and DB2 database. Dell entered the deal to sell Oracle's application server because its customers have been asking to buy Oracle's products, Dell spokesman Bruce Anderson said.

Wylie Wong writes for News.com