Larry Ellison on the Oracle acquisition of Sun
"Why does Oracle, a company that prides itself on highmargins, want to get into the low-margin hardware business? Are you going to exit the hardware business?"
No, we are definitely not going to exit the hardware business. 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 good.
"OK, Apple and Cisco have proven that they can do it, but what experience does Oracle have designing hardware and software to work together?"
Oracle started designing hardware and software to work together a few years ago when we began our Exadata database machine development project. Some of our competitors, Teradata and Netezza for example, were delivering preconfigured hardware/software systems, while we were just delivering software. The combination of hardware and software has significant performance advantages for data warehousing applications. We had to respond with our own hardware/software combination, the Exadata database machine. Oracle’s Exadata database machine runs data warehousing applications much faster—at least ten-times faster than Oracle software running on conventional hardware. All the hardware and software pieces, database to disk, are included. You just plug it in and go—no systems integration required.
"Alright, Oracle’s done integrated hardware and software design with the Exadata database machine. But Exadata uses standard Intel chips. Are you going to discontinue the SPARC chip?"
No. Once we own Sun we’re going to increase the investment in SPARC. 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.
Source : Transcript of an Interview with Larry Ellison by Reuters on the Acquisition of Sun Microsystems