The Commonwealth Bank has embarked on an infrastructure consolidation project that analysts predict will save the bank "mega-bucks".
In December, the CBA was named as the first Australian customer of the Oracle/Sun Exadata V2 system.
The bank intends to use the machine - built on Sun hardware and pre-installed with integrated server, storage and database software - to consolidate some 300 Oracle-based apps used throughout the bank.
The CBA calls it "Oracle-as-a-service".
The Exadata V2 is an expensive piece of kit - priced between US$350,000 for a quarter-rack and US$1.15 million for a full rack (the CBA won't disclose which it has purchased).
It will power everything from transactional engines (now that Oracle has added Flash memory to the V2) to business intelligence software. All of these apps would otherwise have run on multiple discrete boxes and potentially been managed by different staff under disparate policies.
The shared infrastructure approach the CBA has opted should improve the quality-of-service the IT department can provide users. Better results are anticipated from, for example, the central management of backup and disaster recovery.
IBRS analyst Kevin McIsaac believes the Exadata is a throwback to the IBM mainframe era of the 1960s - or (perhaps more appropriately) the AS400 mid-range era of the 1980s. The main difference is that the Exadata was built using industry standard components, specifically for database-driven applications.
McIsaac considers it a positive direction for the industry. "It's the most interesting innovation in the infrastructure space since VMware came on the scene in 1999," he said.
He said an integrated device approach reduces administration, hardware and software licensing costs, and helps the customer "no longer have to be a systems integrator."
It reduces administrative costs "by the fact that it is a fully-integrated solution purchased from Oracle as a one-stop shop," he said. "Server, storage and database are integrated out of the factory."
McIsaac estimates that replacing numerous physical servers and storage with an Exadata would enable a single DBA (database administrator) to perform his or her own role, plus replace the storage or UNIX administrator.
Further, because the box comes pre-installed with storage, it negates the need for high-end storage arrays to be attached to the server. McIsaac suspects this to prove disruptive to storage vendors (such as EMC or NetApp.)
Finally, the "as-a-service" approach has the potential to reduce the cost of software licensing. Even Oracle's senior director for Exadata Solutions, Peter Thomas, concedes the model will save the CBA "a bucket load of money".
Whilst the Exadata comes pre-installed with Oracle licensing agreements, the CBA's "as-a-service" model should technically allow the bank to run more instances of Oracle software per processor.
As Oracle charges for its software licenses on a per-processor basis, the bank should expect to save considerable sums on software licensing.
But is that necessarily bad news for Oracle? Not in the long term.
The push to a 'private cloud' model, in which organisations are consolidating infrastructure to offer compute to their users on a utility basis, will eventually force most enterprise software vendors to adjust licensing accordingly.
If Oracle's licensing model didn't play nice with CBA's plans, another vendor might prove more attractive. And the more apps a customer pools together under a shared resource powered by the Oracle database rather than some other middleware, the more incentive the user has to continue basing new apps on Oracle.
Have you looked at an "as-a-service" model within your business? What do you see as the pros and cons?