“Sun has been by far our most profitable acquisition. It has already paid for itself,” he said in an interview with Kara Swisher at the D: All Things Digital conference posted to the internet Wednesday. Sun cost Oracle $7.4 billion, but Sun had nearly $2 billion in cash at the time, making the deal net out at $5.6 billion. That $5.6 was apparently the number Ellison was referring to.
Oracle has lost server market share since buying Sun, and former employees say that Oracle has flipped the culture at the Sun business unit. Before the acquisition, Sun was run by the engineers. Now, at Oracle, it’s run by the financial people.
That seems to suit Larry Ellison just fine. According to him, Sun is now a much better business. “People say: ‘Oh but your hardware business is going down.’ Well, yeah, in the unprofitable part of it that we’re getting out of,” he said. “So we used to sell other people’s disk drives and we used to bid on contracts where we lost money. Our margins now in our hardware business are now probably the highest margins of anyone in the server business.”
Oracle is enmeshed in legal disputes with Hewlett-Packard, Google and SAP, but in the interview, Ellison seemed to be singularly interested in one competitor: IBM.
“If you look at where we compete with IBM, they used to be number one in database; we’re number one in database; they used to be number one in middleware; we’re now number one in middleware. They’re number one in servers right now, in high-end servers, and with our new Exadata machines and Exalogic machines, I argue that it will be a couple of years and then we’ll pass them in high-end servers.”
Another area where IBM is ahead of Oracle is cloud computing. To date, IBM has promoted its cloud services more aggressively than Oracle. In fact, not so very long ago Ellison famously tagged cloud computing as redundant, insane gibberish.
But last fall, Ellison changed course and introduced Oracle’s own Public Cloud. And onstage this week, Ellison said his company was readying an update to the service, set for next week, where Oracle is expected to add important business tools — Enterprise Resource Planning and Customer Relationship Management — to its cloud products.
That event will also mark the occasion of his first Twitter messages, Ellison said.
We hope his Tweets will be as colorful as his interviews.