Lackluster Oracle cloud-in-a-box hardware sales. Whoops.

When Oracle purchased Sun Microsystems for $7.4 billion two years ago, I’m sure they did not see this coming: As reported by Barb Darrow, information regarding Oracle just released by Nomura Securities analyst, Rick Sherlund, “paints a bleak picture of the state of its hardware business.”

“Sherlund confirmed what GigaOM has already reported — that revenue on sales of high-end Oracle Exadata, Exalogic, Exa-whatever boxes (otherwise known as “engineered systems”) is not making up for lost revenue from other lower-end boxes, and that customers are defecting to cheaper X86-based machines. For the first fiscal quarter ending August 31, hardware revenue was off 14 percent compared to the year-ago period.”

The problem is that Oracle tried to sell a million dollar box as a database…no cloud…not what is popular.  Not a good strategy when there is commodity hardware out there that you can purchase for a fraction of the price, in some cases, with more capabilities.

The appetite for purchasing cloud-in-a-box or database-in-a-box is just not there, as Oracle and others once thought.  I suspect that is not the way we want to consume private cloud computing, nor how most public cloud providers will establish public cloud services.

I suspect these cloud-in-a-box systems will become expensive boat anchors in a few years.