Businessweek Archives

Ellison's Impatience Over Sun


Toward the end of Larry Ellison’s freewheeling talk in San Jose on Sept. 21, host Ed Zander got into a spat with a fellow in the back of the room who insisted he wanted to ask Ellison two questions, not the allotted one. By the time the hotel ballroom looked back, they realized the dogged questioner was none other than Sun Microsystems chairman Scott McNealy.

“Do you have any idea what future ex-chairmen can do?” McNealy, dressed in old jeans and a blue T-shirt, asked Ellison, who was on stage being interviewed by Zander, who once served as Sun’s president. (McNealy’s second question was about hockey’s San Jose Sharks).

The ex-chairman line got some laughs from the audience, but Ellison also made clear during his talk that he, too, wants some fast answers about the fate of Oracle’s $7.4 billion bid to acquire Sun. The deal, announced in April, has now dragged on for five months as the European Union conducts an antitrust probe into Oracle’s potential power in the database market as a result of buying Sun.

Sun is losing $100 million a month “so we’d like to get this thing done,” Ellison said. “The longer this takes, the more money Sun is going to lose.”

Ellison, being interviewed on stage at the Fairmont hotel by Zander, who was also once Motorola’s CEO, held forth on his vision for making Oracle as powerful a company as IBM was in the ‘60s, said he’d work at Oracle at least another five years, and skewered the tech industry’s embrace of the term ‘cloud computing’ as marketing fluff.

Ellison said he wouldn’t spin off Sun's open-source MySQL database to allay regulatory concerns. Oracle is the No. 1 supplier of database software, and European regulators are concerned the company could stifle innovation in the database market by owning MySQL, which Sun bought in 2008. “MySQL and Oracle do not compete at all,” said Ellison. “We’re not going to spin it off.”

Ellison also threw more cold water on Oracle investors’ calls for the company to rid itself of some of Sun’s computer hardware businesses. Sun, once one of the tech industry’s most powerful companies, has seen its financial performance slide for years as customers have turned to cheaper alternatives. “We’re keeping everything” Sun has, said Ellison, including computers, chips, disk storage, and tape storage. Sun’s Sparc processor needs more investment, but overall, “Sun has fantastic technology,” he said. “Sun has been a national treasure.”

By combining Oracle’s database and other software with Sun hardware in complete computer systems, Ellison said he wanted to build Oracle into something akin to the IBM of the ‘60s. IBM rose to power in the computer industry by designing all the pieces of machines used by businesses and governments. The approach would save customers money, Ellison said.

“That’s when IBM was the dominant software company” and used that advantage to become the dominant systems company, Ellison said of the era. “Actually, you can’t use ‘dominant’; that’s a bad word,” he added. “If everyone lets us. we’d like to compete with IBM in hardware.”

Other than McNealy’s interjection, the biggest laughs of the night came when Ellison riffed a typically outrageous reaction to the term ‘cloud computing,’ the industry buzzword for computing power delivered over the Internet. His face turning red as he ranted, Ellison reminded the crowd just how uncensored he is for the CEO of a $23 billion company.

Ellison said companies slapped the “nonsense” cloud computing label on their products to hide a lack of innovation. “It’s not water vapor. All it is, is a computer attached to a network.” Then he lambasted venture capital firms that fund startups selling online versions of commonplace programs. “Microsoft Word: change ‘Internet’ to ‘cloud’ and give it to these nitwits on Sand Hill Road,” said Ellison.

By the end of his spiel, Ellison said he’d work at Oracle for the next five years, then “see how I feel.” Right before that, Ellison said he’s advise young entrepreneurs to get into biotech, not computers. “The computer industry is maturing … There isn’t this one brilliant idea that can make you competitive anymore.”

A lot of that consolidation has come at Ellison’s hands, and many businesses say it’s costing them more and leaving them with fewer choices. At the Fairmont, Ellison made his case why a bigger Oracle could work to customers’ benefit.


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus