Oracle will stay in the hardware business, Ellison says

08.05.2009
Oracle plans to stay in the hardware business following its planned US$7.4 billion acquisition of Sun Microsystems, CEO Larry Ellison has said, adding more detail to earlier statements made by the company.

"We are definitely not going to exit the hardware business," Ellison said, according to a of an interview with Reuters that was filed with the U.S. Securities and Exchange Commission Thursday.

Oracle was primarily interested in Sun's Solaris OS and its Java software, which Oracle relies on for many of its . But Sun also has a significant hardware business, which includes servers and its family of Sparc microprocessors, and Ellison plans to keep them around as a key component of Oracle's 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," Ellison said. "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's comments confirm Oracle's intention to maintain and grow Sun's hardware business, which were outlined in general terms in an April 20 that discussed Oracle's plans for Sun.

"After the closing, Oracle plans to be the only company that can engineer an integrated system where all the pieces fit and work together so customers do not have to do it