Oracle announced a new data center hardware strategy that lowers the prices of its products to increase adoption of its software.
Chairman Larry Ellison announced the fifth generation of the company”s suite of engineered systems products Weddnesday at an event at Oracle”s headquarters in Redwood City. The new products, pairing Oracle”s self-designed hardware and software, will compete with systems from traditional vendors such as Cisco Systems and EMC by being priced lower than the competition, Ellison said.
“Our new strategy is highest performance, lowest list price, best cost performance,” Ellison said.
The new products continue Oracle”s strategy of tightly coupling hardware with software to foster long-term customers. While the hardware division produced just 14 percent of Oracle”s $38.3 billion in 2014 fiscal year revenue, the company typically uses the machines to bundle in its enterprise software, providing a boost to total sales.
Oracle has invested in more products that tie its hardware to software, creating a loose classification of “engineered systems.” Sales of those systems rose in the “double digits” last quarter, Chief Executive Officer Mark Hurd said in a December conference call.
Oracle is the world”s largest database software company and one of the biggest providers of business programs. Today”s event is the company”s first substantial new product unveiling since Ellison stepped down as CEO last September. Hurd and Safra Catz were promoted to CEOs.
Oracle declined about 1 percent to $43.49 in Wednesday”s trading before Ellison”s presentation and was little changed in extended trading. The shares gained 14 percent in the past 12 months.