The week in cloud: Oracle and Dell make strange bedfellows; NSA spygate fallout

Oracle(S orcl) this week made nice with Dell(s dell). Yes, Dell, the company that Oracle CEO Larry Ellison dismissed as a low-end commodity box provider while he was pumping up Oracle’s high-end “engineered systems.” Well, now Dell is apparently Oracle’s special friend in the X86 market. What the two companies announced in a bizarre video appearance by Oracle co-prez Mark Hurd at a Dell event was that Dell is now a “preferred x86 server partner” for Oracle while Oracle is likewise a “preferred enterprise infrastructure partner of Dell.”

Coopetition run amuck?

Oracle CEO Larry Ellison

Oracle CEO Larry Ellison

This is all interesting because not all that long ago, HP(s hpq) was Oracle’s bestie in x86 servers . Of course that was before HP fired Mark Hurd for cheating on expense accounts and inappropriate interaction with a female contractor and before Larry Ellison blasted HP very publicly for doing so, and HP sued Mark Hurd and … well you get the picture.

Now, before it got into the server — er engineered systems —  business by virtue of buying Sun Microsystems for $7.5 billion in 2010, Oracle courted most of the major hardware guys with the exception of archrival IBM(s ibm). HP CEOs Carlie Fiorina then Mark Hurd and Michael Dell, typically keynoted at Oracle OpenWorld, for example, touting their respective servers as the best possible hardware to run Oracle databases and applications.

As an enterprise software company, Oracle needed good relationships with server companies at least in part to compete better with IBM which offered servers and databases. In fact, the very first Oracle Exadata engineered system, which came out before the Sun deal, was an HP box. But  with its ownership of Sun and its server lineup, relationships with other hardware vendors got more complicated.

As one Dell partner at last week’s confab told CRN’s Joe Kovar: “The last thing I ever expected at this event was to see Mark Hurd’s face.” Michael DellI mean, come on:  A customer buying a Dell box running a raft of Oracle software isn’t likely to buy an Oracle engineered system. And, as I’ve reported for a while, Oracle hasn’t exactly hit the cover off the ball selling hardware — hardware revenues have headed south since the Sun acquisition — although Oracle would argue that the hardware it does sell is highly profitable.

Anecdotal evidence is that most people who buy Exa-boxes are doing so at discount and are not necessarily loading up those boxes with new Oracle software but consolidating what the software they already own on new hardware. Anyway, my thesis is that if Oracle truly were happy with its hardware sales and profitability it wouldn’t be snuggling up to Dell.

NSA spying, fallout for cloud computing adoption?

For folks worried about putting private information on consumer oriented services  like Facebook(s fb)  clearly had more reason to worry this week as news broke about the U.S. National Security Agency’s monitoring of internet and cell phone data. GigaOM’s Mathew Ingram did a great job updating this story all week  and David Meyer outlined the huge ramifications this could have in Europe where data privacy is a key concern.

You’ve got to wonder if this will have a chilling effect on  various “cloud first” initiatives. Earlier this week, I wrote that Amazon Web Services might deploy “mini me” GovClouds outside the U.S. for workloads that government agencies — or even businesses  —  would prefer to keep in-country.  Since posting that I’ve had several emails from people who would know that AWS is, in fact, doing this.

Given that AWS,  one of the few internet powers not named in the NSA story — is U.S.-based, could there be pushback from other countries that otherwise would consider an Amazon GovCloud implementation?

Meanwhile, Amazon finally acknowledged the existence of a “secret” contract to build a private cloud for the CIA but it took IBM to get it out of them. IBM contested the contract award to the General Accountability Office which ruled in IBM’s favor and recommended a “re-do” of the process. Kudos to Federal Computer Week reporter Frank Konkel for keeping ahead of this story.

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