Oracle unveils new line of faster servers to energise hardware business

Oracle Corp Chief Executive Larry Ellison unveiled a new line of faster servers on Tuesday, the latest step to revive a shrinking hardware division and shore up a core software business threatened by smaller rivals.

Servers built with Oracle's new "T5" microprocessors have beaten several performance records and run business databases and applications much faster than previous versions, the billionaire told reporters at a launch event in Redwood City.

Ellison is focusing Oracle's hardware division, acquired through the $5.6 billion purchase of Sun Microsystems in 2010, on selling high-end server equipment, including the "SPARC" T5- and M5-powered servers and microchips shown off on Tuesday.

Tuned to work with the company's software products, they are part of Oracle's vision of becoming a one-stop shop for cloud-computing products, offering applications, databases and computing infrastructure over the Internet.

"When Oracle bought Sun, a lot of people thought the SPARC microprocessor was a real laggard and would never catch up. We've done better than catch up. We've caught up and passed the competition," Ellison said.

In future, Oracle will build more features from its library of databases, middleware and other applications directly onto its SPARC microchips, making them more efficient.

"That's going to let us gain a greater and greater advantage going forward," Ellison said.

With sales of lower-end servers facing tough competition from the likes of Hewlett-Packard Co and other competitors, Oracle's hardware business has seen its revenue fall every quarter since the Sun acquisition.

The growing number of competitors offering cloud-based services and the ability of customers to mix and match between databases, software and hardware is making it harder for Oracle to sell its products in lucrative packages.

Ellison had said in December he expected hardware systems revenue to start growing in the fiscal fourth quarter.

But on a conference call with analysts last week, he said that customers were holding off buying new equipment in anticipation of the release of the newer T5 and M5-powered machines.

© Thomson Reuters 2013