Channel Marker

Sep 29 2010   6:10PM GMT

Oracle sets sights on chips

badarrow Barbara Darrow Profile: badarrow

So, Oracle’s in the market for chip companies. And AMD quickly leapt to the top of the list of prospective targets.

Oracle CEO Larry Ellison told financial analysts late last week that the company–which has bought something like 60 companies over the past few  years–is still in shopping mode. And that chip and vertical software companies top the wish list..

AMD carries a market cap of around $4.7 billion. For its most recently closed quarter, Oracle had more than $12 billion in cash. There’s no reason this deal couldn’t happen.

One might say that Oracle’s already bought a chip company in Sun Microsystems and its SPARC franchise. Of course, Sun no longer did any chip manufacturing per se. It retained the IP but fabrication of SPARCs Fabricating was left to Fujitsu.

In any case, a nagging  chip question has dogged Oracle since  it closed the Sun deal last January. For one thing, the only hardware it’s promoting –Exadata and Exalogic servers–is based on Intel microprocessors. 

And, at a meeting with a few Sun and Oracle partners in August, a hardware channel exec said Oracle has no interest in investing R&D dollars into Intel machines. The question from the VARs was obvious: “What about Exadata?”

Answer: “We’re looking at other platforms.”

Other platforms? Why not say SPARC? There’s something odd going on here.

In the meantime, the critiques on Oracle’s data center appliance plays are not all glowing. While Ellison painted Exalogic as the latest-and-greatest in hardware-and-software technology knit together from inception. Others called it a return to the mainframe, which may be a good or bad thing depending on what you think of mainframes.

John McCarthy rejected that analogy.

“It’s worse than that! It’s a return to the VAX! It’s the hardware, the OS, the database all combined. They’re putting all their wood behind one arrow,” said McCarthy, who is VP and principal analyst for Forrester Research.

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