Sun 'a national treasure,' says Oracle's Ellison

Oracle CEO Larry Ellison at Oracle OpenWorld 2008 (Oracle photo)

 Oracle CEO Larry Ellison says with Sun Microsystems part of his company, the software giant will be a computer “systems” company that will rival IBM.

“We’re not going into the hardware business,” said Ellison Monday night in San Jose, of the server and storage hardware Sun makes that will become part of Oracle if its $7.4 billion proposed acquisition of Sun closes. “We’re going into the systems business.”

Ellison discussed the pending acquisition, his America’s Cup sailing, cloud computing and other topics in an event hosted by the Churchill Club, a public affairs forum. He was interviewed onstage by Ed Zander, former CEO of Motorola and former president of Sun.

The U.S. Department of Justice approved the Oracle-Sun deal, which was announced in April, but the European Commission is still studying whether the acquisition would be anticompetitive. Ellison said he hopes the acquisition closes soon, as Sun is currently losing $100 million a month as a standalong company.

Despite speculation at the time that Oracle, known for its database management software and for not selling computer hardware, would somehow sell off parts of Sun once acquired, Ellison declared, “We’re keeping everything.”

Ellison specifically mentioned Sun’s tape and disk storage hardware, Sparc processors, Solaris operating system, Java software development environment and MySQL open-source database management software, as businesses Oracle will keep after the merger. MySQL is seen as particularly vulnerable because it competes with Oracle’s primary business line of commercial database software, but Ellison said the two do not compete head-to-head in the market.

“Sun has been a national treasure the last couple of decades and we believe that with the combination of that Sun technology and Oracle technology we can compete and beat IBM,” Ellison declared.

Ellison also said the Sun acquisition would give Oracle entrée to large system business opportunities in the banking, telecommunications and airline reservation sectors, which are big users of Sun Microsystems technology.

He faced a skeptical host in Zander, who worked at Sun from 1987 to 2002, and was president the last three years of his tenure. Zander compared Oracle’s strong earnings, market share and customer retention to Sun’s losses and declining market share and asked Ellison, “What could you possibly be thinking?”

Ellison scoffed at IBM claims that it has snatched away 250 Sun customers in the last six months, due to uncertainty about Sun’s future. “What does that mean?” Ellison asked. “I don’t think there’s a single example of a Sun customer who’s replaced all of their machines with IBM computers.”

Among several moments of levity at the event in a ballroom at the San Jose Fairmont Hotel was a question from the audience by Scott McNealy, current chairman of Sun, about the city’s local National Hockey League franchise. He asked Ellison: “Will you buy the San Jose Sharks so we can rename [their home ice] the Sparc Tank?”

Asked outside the ballroom for his comments on the pending deal, McNealy said, of Ellison, “I think he got a good deal,” but didn’t elaborate.

When the merger was announced April 20, Sun and Oracle said they expected it to close “this summer.” The Churchill Club event at which Ellison spoke was held the first day of fall.