Oracle is launching an aggressive incursion against Cisco's data center hardware business. The company on Wednesday unveiled a new server with integrated software defined network capabilities, which Oracle chairman and CTO Larry Ellison said will offer "by far the lowest price at the data center core."

Called the Virtual Compute Appliance X5, Oracle's new infrastructure block is an Intel two-socket server with integrated storage and compute software, all connected up with InfiniBand. It will compete with VCE's vBlocks, which incorporate Cisco's Unified Computing System (UCS) servers.

"We've never really competed for the data center core," Ellison said, noting that the market for the data center fabric has become largely commoditized, with buyers looking at price as the key factor.

"Our strategy in the beginning was to deliver extreme performance," he said. "Now we're going to compete for that two-socket data-center-core business."

The market Ellison is targeting isn't trival. Last year, Cisco's data center business brought in $2.6 billion, or 6 percent of the company's total revenues.

In a presentation webcast from Oracle's headquarters Wednesday, Ellison — who's remained visible since ceding the CEO title in September — focused intently on pricing, promising repeatedly to undercut Cisco's best fabric price by nearly half.

In slides showing side-by-side price comparisons, Ellison contrasted the list prices for X5's hardware, storage, and software with Cisco's "discounted" prices, highlighting Oracle's price advantage: $562,000 for Oracle hardware vs. Cisco's $912,000.

"And this is a big secret, don't tell anybody, but we do discount off the list price," Ellison added, eliciting laughter from the live audience in Redwood Shores, Calif. "We will negotiate, and we will discount off of the list price."

Other X5 appliances announced by Oracle Wednesday handle big data, data recovery, and of course databases.