Eye on Oracle

Sep 22 2009   8:07PM GMT

Ellison hopes the EU won’t Sunset his hardware business

Ed Scannell Ed Scannell Profile: Ed Scannell

Speaking at a dinner hosted by a non-profit group in San Jose last night, Oracle chairman Larry Ellison confirmed what we wrote earlier this month: The European Union’s investigation into the Oracle-Sun deal could slowly kill Sun’s competitive chances.

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?

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