"To a lesser extent it may also compete with cloud-based database offerings," Menninger said. "If you look at Oracle's advertising campaigns, it's not surprising to see new combined offerings of hardware and software. The market now seems to be very receptive to appliance-based solutions."

The new offering will likely see some competition from other Oracle products as well, Kobielus added.

Oracle needs to be careful how it prices, positions and markets its Database Appliance product if it wants to avoid cannibalizing sales of lower-end Exadata boxes, he cautioned.

Beyond that, other rival products in the same category Teradata's 2600-series appliances, the IBM Netezza TwinFin and EMC Greenplum's Modular Data Computing Appliance. "Among them, Oracle has the most OLTP-optimized appliance that is also a strong data warehouse appliance," Kobielus said.

Curt Monash, a principal at Monash Research said he doubts that the new product will boost Oracle's place in the small to mid-size business market.