Oracle leads the cloud rush

At the peak of the gold rush, it’s said that the greatest commercial success came from the supply of shovels rather than finding gold. Larry Ellison reminded us of this last week when Oracle announced a strategic investment in Mellanox -...

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At the peak of the gold rush, it’s said that the greatest commercial success came from the supply of shovels rather than finding gold. Larry Ellison reminded us of this last week when Oracle announced a strategic investment in Mellanox - global market leaders in Infiniband switches; the defactostandard for enterprise datacentres and cloud computing architectures. As Ellison knows so well, in the euphoria of the “cloud rush”, wires, switches, databases and servers are today’s shovels, and he wants a closer role in their production. Oracle has had a relationship with Mellanox for around 8 years, architecting Infiniband into the initial Exadata launch joint venture with HP. Ellison then dumped HP to re-launch Exadata on Sun kit and Oracle recently specified it into it the new Exalogic Middleware machines revealed at Openworld. This could be a defensive play to inhibit other competitors such as IBM and HP from acquiring control of assets, or perhaps it signposts a later move to full acquisition as it suits them. A spokesman for Oracle denied any hostile plan to acquire but with a holding of 10.2% (c$70M paid) and ample war chest, its options are wide open and the Oracle flag is well and truly planted in this foundation block of the cloud. Currently the only real threat to Infiniband is emergent technology from China but more “cloud-rush” acquisitions can be expected soon and we’ll keep you posted. In the meantime, you can bet that Mellanox will be one to watch.

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