Teradata isn’t really a hardware company–at least not in the general-purpose hardware sense of HP, Dell, etc. It’s more an appliance company; like NetApp or Netezza; what you’re buying is the software intelligence about solving a particular problem, but the way it’s bought and sold is tied to specific (hardware) systems. Some call this “iron-wrapped software.”

Exadata is a great analogy; a relational DBMS plus the pre-configured hardware to run it–so the system can be highly optimized for the task at hand, but more important, so that the customer doesn’t have to bother with the nuts and bolts. Hurd has experience selling this kind of appliance-ized technology at Teradata, and HP ramped up similar thoughts during Hurd’s tenure, including its Neoview data warehousing play and BladeSystem Matrix.

While the “infrastructure by the pound” model is definitely on the rise, Oracle’s probably more interested in the fact that Hurd has now worked with a large number of premier global enterprises at two different vendors. He has a lot of contacts and friends among customers. He’s been talking to them for years about what they want in data processing and analytics, and he knows the competitive landscape well. He also was highly effective as an operational manager at HP, bringing it discipline and much-improved results. Finally, he knows exactly how Teradata (an Oracle enemy) and HP (a huge route-to-market for, and leading frenemy of, Oracle) work from the inside. So if you can get over the ‘stepping out with a contractor’ and ‘diddling his expense claims’ issues, he can be a great asset for Oracle.

“First of all, hardware maintenance isn’t as lucrative or perpetual, so the economics will break Oracle’s profitability model,” he wrote. “On the front end of build and sell, Oracle will have to out-Dell Dell—the industry leader in building commodity servers—by multiples upon multiples to consider any hardware line successful in comparison to traditional software.”

Considering Oracle’s push into Sparc-based hardware rather than x86 commodity servers, I don’t see the company being able to out-Dell Dell at any point. Rather, it seems as if Oracle will pare down Sun to profitability and push high-margin hardware such as Exadata and other big Sparc boxes.

Guyer says that Oracle’s profit model for software includes online downloads and trials, followed by pricey charges when key features go into production. As Guyer notes, hardware cannot be downloaded and so Oracle must adjust its sales model to accommodate the Sun acquisition.

Back when Sun was on its own, it offered a plethora of “try and buy” offers where customers could play with the hardware for 60-90 days to see if they liked it. If they did, they bought it. If not, they returned it. Sun paid shipping costs both ways. That program ended Dec. 18, according to the Sun Try and Buy website.

“The not-so-funny joke over the last several months has been that Oracle offers a buy-and-try on Exadata, direct-only to customers, including a strict no-return policy,” Guyer wrote. “Oracle claims that demand has outpaced production, resulting in a $1B pipeline and inability to ship units without signed purchase orders.”

We’ll see how that works. Is there anyone out there who has bought hardware from Oracle and wants to tell us about it? Comment here or drop me a line.

In his hour-long Q&A session following the Oracle + Sun press briefing, Oracle chairman Larry Ellison addressed a wide range of topics both seriously and playfully from his brazen confidence about the newly combined company fundamentally changing the way IT will buy products to trash talking competitors to lambasting the press. Some moments of the performance will certainly find their way onto “The Best of Larry Being Larry” DVD.

Much of the trash talking focused on IBM, a competitor Larry continues to have a curious love-hate relationship with. He again said he believes the Sun acquisition will allow him to recreate the IBM of 1960s, a company that delivered seamless hardware-software solutions bundled with great technical support.

But apparently a lot of things Big Blue has done since the 1960s has caused it to drift away from the “IT gold standard” it came to represent, which Larry now believes he can resurrect with Sun’s help.

With one hand Larry gives the old IBM a pat on the back: “Our vision for 2010 is the same as IBM’s in 1960 – deliver seamless systems. That strategy made IBM the most successful company in the history of the world. We like that model.”

And with the other hand Larry gives the present day IBM a backhander: “How many servers can IBM put together for OLTP applications? Umm, one. Just one server attacking really big jobs. They can’t scale out, do clouds or clusters. It fascinates me why IBM didn’t come out years ago with something like our Exadata Database Machine. We have huge advantages over them.”

Or completely dismissing their chances to succeed in the database business: “IBM is so far behind, they don’t have any chance at all. In databases, they are a decade or so behind us. I’m serious.”

Boldly, he believes the Oracle-Sun approach to selling stacks of integrated systems along with support directly to the largest customers will significantly alter IT industry’s approach to how it receives, installs and supports mission critical components:

“At the heart of what we are trying to do, and what customers are really looking for, is to completely change the experience of buying systems from databases to middleware to development tools. No one has ever had all that inside one company and did so with open technologies.”

Some other quotes for the The Best of DVD:

On press reports just prior to this week’s event speculating that Oracle would lay off half of Sun’s workforce:

“The people who reported that should be ashamed of themselves. The truth is we are hiring 2,000 people over the next few months and that will be twice as many people as we are laying off. We will make $1.5 billion (in profit from Sun products) in the first full year. Sun has a fabulous installed base and pipeline of technology.”

On Oracle’s plans for Sun’s MySQL open source database, the product that caused the European Commission to hold up the deal for almost four extra months:

“MySQL will be made better. We will do a better job at improving at it than has been done for the past five years. For instance, we have our own version of Linux that we have added new features to. We also want to make both Solaris and Linux better. Our goal is to make all these systems better technologically because we can make more money for products and support.”

On what he valued more, wining the America’s Cup or winning a deal against IBM:

“I don’t have to choose.”

On whether he plans to buy the Golden State Warriors:

“I’m trying, I’m trying, but unfortunately you can’t have a hostile takeover of a basketball team.”

On whether Oracle is missing out by not competing in the consumer electronics market ala Apple:

“We are not good at a hundred different things, but we are good at a small number of things and that is what we need to do. I am not sure Oracle is the right company to take on Apple in telephones. Instead of making phones we’ll make Java that goes into those phones. It would be very dangerous for us to go into consumer electronics.”

On plans for going after the high end of the market with Solaris-based solutions as opposed to focusing on opportunities at the lower end:

“Unix still does well at the high end, which is where Solaris is going. We won’t be making it for single systems though, but for a cluster of computers. The high end to me is not Intel vs. SPARC, it is more like a cloud of SPARC machines in the data center. It will be a long time before Linux catches up there. I am a Linux fan, but I don’t think the high end is in danger for us at all.”

On whether the acquisition of Sun now makes Oracle too big a company to consistently deliver innovative products:

“Everyone said IBM was in trouble because of its size and that was just nonsensical. This idea that you are too big to innovate is just insane. A long as you have quality people – and we have quality people in quantity – I will never hear me tell you Oracle is too big to innovate.”

I had mentioned in a blog last week that with its newfound power and position in the IT industry thanks to the Sun deal, Oracle might display a bit more humility than hubris. Larry and company might be more humble eventually, but not this week.

But Larry didn’t have all the best one liners. In his opening remarks Oracle President Charles Phillips, under siege from jilted mistress YaVaughnie Wilkins’ billboard campaign highlighting their once romantic relationship said, “welcome to this important day in the history of enterprise computing. Hopefully you have had a smoother week than I did. But on to bigger and better things.”

Well, maybe not so slowly. Ellison said Sun is losing some $100 million a month. This news comes less than a month after Sun reported a loss of $147 million for the August quarter.  Things are clearly getting worse.

Interviewed on stage, perhaps fittingly, by ex-Sun executive Ed Zander, Ellison said the longer the EU’s approval process takes, “the more money Sun is going to lose, and that’s not good for anybody. We want to get this (acquisition) done to save as many jobs as we can.”

Ellison did express confidence the EU will approve the deal, but obviously would like to see that approval way before the January 19, 2010 deadline. If indeed it takes that long, Oracle’s integrated hardware-software strategies will have to come from way back in the pack to catch IBM and Hewlett-Packard, both of whom have been successfully marauding Sun’s user base.

Nonetheless, Ellison said he is still intent on competing hard against IBM and HP, adding he has “no interest in the hardware business,” per se but has a “deep interest in the systems business.” This means Oracle will focus on very high performance systems, such as the Exadata 2 system it jointly rolled out with Sun last week, and not commodity level boxes.

Continuing on his roll, Ellison said he had no plans to sell off Sun’s popular open source database, MySQL, despite some of the reservations expressed by the EU. Earlier this month EU officials said Oracle having control over the leading proprietary database and the leading open source database could end up significantly limiting users’ choices in the database market.

Ellison shot back last night saying Oracle’s flagship database doesn’t compete with MySQL, asserting each product is sold to very different users. Oracle’s product is aimed at large corporations for mission critical applications while MySQL is for programmers who can download it for free and generally use it for Web-based applications. It is good to see Larry take a swing back at the EU for such lunacy.

And in another case of Larry being Larry, he couldn’t help himself from taking another swing at cloud computing. I thought he got past this, but he still hasn’t had his fill. Asked what sort of threat cloud computing presented to Oracle’s business, Ellison said there was nothing new about the idea, “that is was just water vapor, just a computer connected to a network.”

Come on now Larry, we know its semantics but look at what your competitors can do with just the right words and a huge marketing campaign.

In a somewhat surprising piece of advice to aspiring entrepreneurs in the audience, Ellison said they should think about pouring their money and energies into biotech and not IT. So one of the richest guys in the world, who made his fortune from IT, doesn’t think it offers the next generation any growth opportunities?