Oracle CEO to IBM, HP: Don't Get Your Hopes Up. We're Keeping Sun's Hardware.
Larry Ellison’s got some news for skeptics predicting Oracle will dump the Sun Microsystems hardware business when its $7.4 billion acquisition of the company closes: It’s not gonna happen. In an interview with Reuters subsequently filed with the Securities and Exchange Commission, the Oracle CEO said he plans to maintain that part of Sun’s business. “We are definitely not going to exit the hardware business,” Ellison explained. “While most hardware businesses are low-margin, companies like Apple and Cisco enjoy very high-margins because they do a good job of designing their hardware and software to work together. If a company designs both hardware and software, it can build much better systems than if they only design the software. That’s why Apple’s iPhone is so much better than Microsoft phones.”
Ellison went on to note that Oracle has big plans for Sun’s SPARC chips as well. “Once we own Sun we’re going to increase the investment in SPARC,” he said. “We think designing our own chips is very, very important. Even Apple is designing its own chips these days. Right now, SPARC chips do some things better than Intel chips and vice-versa. For example, SPARC is much more energy efficient than Intel while delivering the same performance on a per socket basis. This is not just a green issue, it’s an economic issue. Today, database centers are paying as much for electricity to run their computers as they pay to buy their computers. SPARC machines are much less expensive to run than Intel machines….our primary reason for designing our own chips is to build computers with the very best performance, reliability and security available in the market. Some system features work much better if they are implemented in silicon rather than software. Once we own Sun, we’ll be able to plan and synchronize new features from silicon to software, just like IBM and the other big system suppliers. We want to work with Fujitsu to design advanced features into the SPARC microprocessor aimed at improving Oracle database performance. In my opinion, this will enable SPARC Solaris open-system mainframes and servers to challenge IBM’s dominance in the data center. Sun was very successful for a very long time selling computer systems based on the SPARC chip and the Solaris operating system. Now, with the added power of integrated Oracle software, we think they can be again.”
Oracle’s (ORCL) intentions for Sun’s (JAVA) hardware business come as great news for engineers worried they might lose their jobs as a result of Oracle’s surprise acquisition of the company. Bad news for rivals like Dell (DELL), Hewlett Packard (HPQ), and IBM (IBM), though. Having Oracle out there in the market peddling an integrated hardware and software solution is going to make their lives more difficult.