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Oracle (Nasdaq: ORCL) and IBM (NYSE: IBM) are leveraging the multi-million dollar investments they have made in their Linux product lines by joining forces to collaborate on the sales 
and marketing of Oracle applications for Linux on System z.
This collaborative effort has been driven in large part by customer demand, Frank Monez, the Linux System z Initiative Manager, told CRM Buyer. "Both companies have been developing technologies for the Linux platform in recent years," he said, pointing to the System z rollout as one example. "Companies want to take advantage of that."
Not a Surprise
Planned customer incentives will run up to US$250,000, which as Jim Stallings, general manager, System z for IBM, pointed out, "creates a very compelling value proposition for these clients."
As part of this initiative, IBM and Oracle will focus on better sales training for teams in the Oracle/IBM Joint Solution Center in Montpellier, France, and the IBM Oracle International Competency Center in the Silicon Valley, by developing best practices and implementation guidance. The two will also provide additional support to customers leveraging IBM System z and Oracle's software running on Linux on the System z platform.
It is not surprising why the two Fortune 500 companies are emphasizing the Linux product: It is an important growth and revenue driver for both Oracle and IBM.
Last week, IBM reported stellar earnings and a quarterly profit of $2.2 billion -- led in large part by its hardware line. Systems and Technology Group (S&TG) revenue from System z server products increased 25 percent compared with the year-ago period. Total delivery of System z computing power, which is measured in MIPS (millions of instructions per second), increased 16 percent.
Revenue Driver
Revenue for the overall S&TG category totaled $5.5 billion for the quarter, up 10 percent. Earlier this year, IBM announced that it will invest $2.2 million in 2006 to expand its Linux Technology Center in Brazil -- specifically to complete construction of a Linux development laboratory in Hortolandia and expand a second lab in Campinas, on Brazil's Unicamp campus.
Linux is also strategic to Oracle, said Robert Shimp, vice president, Global Technology Business Unit at Oracle. "We see significant sales opportunity for Oracle's open system solutions running on Linux on System z," he added.
The companies' collaborative efforts will focus on Oracle E-Business Suite, Siebel CRM and PeopleSoft Enterprise using Oracle Database 10g Release2 on Linux on System z. Going forward, Shimp said, "we will continue to explore opportunities that exploit the unique capabilities of Linux on System z."
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