Oracle’s Ellison tells why he’s chasing low-margin business
The database company, which recently bought Sun – and its jewel, Java – is keen to move into the difficult hardware business…
Oracle CEO Larry Ellison says although hardware has become a low-margin business, when it’s done right and hardware and software is designed together it’s anything but.
Think Apple’s iPhone, he said in a recent interview.
“That’s why Apple’s iPhone is so much better than Microsoft phones.”
Ellison also cited network supplier Cisco as another hardware-plus-software company enjoying high margins. And he said Oracle’s Exadata database machine was an example of Oracle doing similar. It runs data-warehousing functions 10 times faster than when Oracle software runs on conventional hardware, he said.
Now, since buying Sun Microsystems, Oracle is drilling down even further into hardware – into the chip business, in fact, with Sun’s SPARC chips. Ellison said there were plans to increase investment in SPARC because Oracle views designing chips as very important. He cited SPARC chips as an example.
“SPARC is much more energy efficient than Intel, while delivering the same performance on a per-socket basis.”
“Some system features work much better if they are implemented in silicon rather than software… [we aim to] synchronise new features from silicon to software, just like IBM and the other big system suppliers.”
Oracle aims to challenge IBM’s dominance in the datacentre, said Ellison. Sun was successful selling computer systems based on SPARC and the Solaris operating system, he said. “Now, with the added power of integrated Oracle software, we think they can be again.”
He added that Oracle would keep Sun’s other businesses in disk storage and tape back-up as he believes systems that are engineered to work together work the best, being highly reliable and secure. However, Oracle intends to carry on working with HP, which builds its Exadata machine using Intel processors, and has no plans for a SPARC Solaris version of the machine.
“It delivers record-setting database performance at a lower cost than conventional hardware… [and] is the most successful product introduction in Oracle’s 30-year history.”
Sun’s Solaris operating system is the leading platform for the Oracle database. After acquiring Sun, in April, Oracle said it would now be “the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together.”
The deal also saw Oracle acquire the valuable Java – Sun’s programming language that’s designed to run on almost any platform, online or offline. Oracle’s Fusion Middleware is built on top of Java’s language and software.
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