Ellison wants to model new Oracle after T.J. Watson Jr.'s IBM

Introduction

>> For 30 years it's been software, software, software, software, high gross margin, operating earnings, cash machine, customer stickiness, locked in, sell out multiple platforms, Sun - my dear beloved alma mater - Systems, now struggling, lower gross margin, operating earnings, commodity hardware, and losing market share. Tell me this makes sense?

>> OK. There's a book I was interviewed for called Software. And if you read the book, which 4 people have, it's about 11,000 pages... and there is a chapter I think called something like What do You Want to be When You Grow up? And I think the short answer to that was, we want to be T. J. Watson Jr.'s IBM. Not Lou Gerstner's IBM, not Paul Maisano's IBM. We want to be T. J. Watson Jr.'s IBM. And that's when IBM really was the dominant software company, dominant's a bad word, I'm not allowed to use that word... when IBM was both a... well they were the dominant software company in the world, and they translated that position in software to become the dominant system's company in the world. We are not going in the hardware business. We have no interest in the hardware business. We have a deep interest in the systems business. Let me tell you the great systems companies. Cisco is a great systems company. They ship a hardware-software combination that allows them to be instrumental in the acceleration of the internet. And we think by combining our software with hardware, that we can deliver systems that can be the backbone of most enterprises in America and around the world. So it's really the combination of the 2. We have no interest in competing with Dell, and the plain old running Windows on X86's or HP with running Windows in X86's. We are very interested in running airline reservation systems, and we're very interested in running banking systems, and telecommunication systems. And that requires both hardware and software.

>> So when you think about this thing.... some people think it was totally defensive. You didn't want IBM to have it. With Solaris it was Java, it was the telecommunications financial service markets. You guys thinking about these kinds of things? Or did this just come on your lap and you decided to go after it?

>> Well it was in the book. You go back, and seriously, look at the book. I think T. J. Watson Jr.'s IBM was the greatest company in the history of enterprise on Earth, because they had that combination of hardware and software running most of the enterprises on the planet. And the... that company was... that company was the dominant company in computing when I came into this industry. Pre-Intel, there was no Intel, there was no PC, there certainly was no Mac or any of this stuff. It was IBM, IBM, IBM. And I was told IBM was not a company against whom you competed. IBM was the environment in which you competed. We've already beaten IBM in software... on modern systems. And now, if everyone will let us, we'd like to see if we can beat IBM in hardware.

>> So are you going to keep all the systems?

>> We are keeping everything. We're keeping tape, we're keeping storage, we're keeping X86 technology and Spark technology. We're going to increase the investment in it. Sun, if you look around at technology companies, and if we could just for 1 dollar, if we could buy IBM, HP, Sun, or any of these tech companies, I'm not sure we wouldn't pick Sun if they're all the same price. And Sun was selling at a hell of a discount. So Sun has fantastic technology. We think it's got great microprocessor technology, needs a little more investment but we think Spark can be extremely competitive. It's got the leading tape, archival storage systems. We think open storage, their new Dis system is absolutely fantastic. Java speaks for itself. Solaris is overwhelmingly the best open systems operating system on the planet. Sun has been a national treasure for the last couple of decades, and we think with the combination of that Sun technology and Oric technology, we can compete and succeed and beat IBM; and that's our goal.

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