Oracle CEO: Sun Deal Key to Beating IBM

Larry Ellison loves IBM Corp. (NYSE:IBM), but what he'd love even more is to beat the technology giant on as many fronts as possible.

At a Churchill Club event in Silicon Valley Monday night, the Oracle Corp. (NASDAQ:ORCL) CEO idolized Thomas J. Watson, who developed IBM into one of the most powerful sales organizations and served as its president from the 1920s through the 1950s.

"T.J. Watson's company was the greatest company in the history of the enterprise," Ellison said. "We want to be T.J. Watson's IBM."

To get there, though,will mean upping the ante against today's IBM, and Oracle's pending $7.4 billion agreement to buy Sun Microsystems Inc. (NASDAQ:JAVA) is going to provide the key, he said.

"We've already beaten IBM in software, now, if everyone will let us, we will beat IBM in hardware," Ellison said. "That is our goal."

The "everyone" Ellison was referring to presumably was the European Commission, which is reviewing the deal now and in particular is examining whether competition will be harmed if Sun's open source database management product MySQL gets absorbed by Oracle (The Deal Pipeline subscribers can read more about the EC's investigation here). Ellison said he was confident that European antitrust authorities would follow the lead of the U.S. Justice Department, which cleared the deal a month ago.

"Once they do their job, they are going to come to the same conclusion," he said. "MySQL and Oracle do not compete at all."

Besides stressing that Oracle has no plans to spin off the MySQL product, despite the fears of some, Ellison expressed displeasure with how long it might take for the Sun deal to close. The company is bleeding $100 million a month, he said, presumablyfrom lost business due to customer uncertainty.

"The longer this takes, the more money Sun is going to lose," Ellison said. "That's a big problem."

Ellison's observations touched on a range of other subjects, prompted (and sometimes interrupted) by Ed Zander, the former Sun president and Motorola Inc. (NYSE:MOT) CEO who interviewed Ellison on stage Monday night:

• Cloud computing. He's made fun of the term before, referring to it as "fashion-driven," but got particularly fired up about it's overuse Monday. Taking on a derisive surfer-dude accent, he prodded the multitudes of companies that claim to offer cloud computing: "Oh, like, yeah, I've always been doing cloud computing." He then attributed the term to "some nitwits on Sand Hill Road."
• Obama. Ellison, who said he voted for President Obama, also said he was "surprised there are so many huge spending programs we are facing."
• Innovation. When asked what advice he'd give to someone looking to start the next big thing in tech, Ellison suggested avoiding information technology. "I'd probably go into biotech, not computing," he said. "Go into a field where the rate of innovation is very high. The computer industry is maturing."
• Alinghi, the Swiss America's Cup sailing team. Ellison, who has funded a huge trimaran in a bid to win the sailing trophy, has been embroiled in a law suit with the America's Cup defender over match rules. "I think we're going to win, unless they cheat."

-- Olaf de Senerpont Domis

Comments

[BeachRider:]

LE is the Glamour for ORCL. He talks to money-people about business-views of his company. The JAVA purchase looks organized from that perspective. The problem is adapting JAVA's specialized technology-capability to Oracle's wide platform of software.

If LE doesn't spin-off MySQL, it is because he wants its impact carefully controlled vs Oracle's Database. I can see why the EU is worried, but they will kill MySQL and Sun if they aren't careful.

Sep 22 10:15 AM