Oracle gunning for IBM's position in business hardware

Oracle boss Larry Ellison said Wednesday that he is out to dethrone IBM in the realm of business network hardware, including high-end computer servers.

"Our biggest competitor is IBM," Ellison said during an on-stage chat with Kara Swisher at the prestigious All Things Digital conference hosted by the Rupert Murdoch-owned technology news website.

"IBM was number one in databases. Now we are number one," he said.

"And they were number one in middleware (programs that help different elements of a computer system communicate), now it's us; they were number one in high-end servers, and we will be number one in the high-end servers."

Oracle's high-end offerings, such as Exadata and Exalogic, are well placed to "beat" IBM pSeries systems, according to Ellison.

However, he said that California-based Oracle was not a competitor to IBM in services, which has been a priority for the century-old New York-based technology pioneer.

The servers are a relatively new business for Oracle, which was founded in 1977 and specializes in business software and databases.

Ellison has been head of engineering at the company since it was founded. Oracle got into the hardware business when it bought server-maker Sun Microsystems in 2010.

According to figures released Wednesday by IDC, Oracle is currently ranked fourth in worldwide server market revenue, with its share declining to 6.1%, behind Hewlett-Packard (29.3%), IBM ( 27.3%) and Dell (15.6%).

But Ellison said tracking market share was misleading, since Oracle was sacrificing sales of entry-level systems to focus on more profitable high-end gear with fat profit margins.

"Our margins are probably higher in the server industry," Ellison said.

He explained that Oracle was emulating the model set by Apple in the consumer electronics market by providing fully integrated systems designed to be simple for users.

"We found that data centers were unnecessarily complex", Ellison said.

That led to the decision to bring together hard disks, data storage, networks, and rich databases, because "if we do all we can do it is much more reliable, much lower cost."

"This is the Apple model," he said, before paying tribute to the iPad, iPhone, iPod and Macintosh computer maker's legendary co-founder and boss Steve Jobs, who died last year.

Mr. Ellison also announced that on June 6 all Oracle software will be accessible online in the Internet "cloud" and that he will mark the occasion with his first "tweet" on the micro-blogging website Twitter.

All Oracle applications have been "rewritten" to be offered online, which he said had given the company a wide edge over its biggest competitor in software, Germany-based SAP.