REDWOOD SHORES, Calif. (CNN/Money) -
Larry Ellison has become a huge fan of Microsoft.
Okay, Oracle CEO Ellison hasn't exactly embraced the if-you-can't-beat-'em-join-'em mentality regarding the menace from Redmond. But he suddenly is full of praise for Microsoft's prowess. Emulating Microsoft's success, it seems, isn't such a bad idea these days.
Oracle is no slouch itself, of course. But by having built its empire selling to businesses -- its core product is a database program that allows companies to manage their operations efficiently -- Oracle never got to be the monopoly that Microsoft is. Oracle always has had to deal with big competitors like SAP, Sybase and IBM as well as pesky startups that offer applications that run alongside Oracle's databases, like Siebel Systems, I2 Technologies and Manugistics.
Ellison's new-found admiration for Microsoft, then, revolves not around his love for Bill Gates or Steve Ballmer, but rather on Microsoft's success at packaging its software in "suites," or groups of software products. Microsoft's landmark Office product is the example Oracle is following with its new product, the "Oracle Collaboration Suite."
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The offering essentially is a juiced-up Oracle database that also happens to run e-mail, voicemail, calendar and file-sharing functions. "The suites always win," Ellison said Wednesday, during an hour-long, rambling monologue/Q&A session with financial analysts at Oracle's headquarters. "The specialty guys can never survive for long."
Among his many qualities, Ellison has the timing of a comedian. "A great man said," he began his talk, adding a pregnant pause, as a slide projected a 1998 quote from Bill Gates suggesting that one day all corporate software applications would reside on a central computer. "Bill is a genius," deadpanned Ellison. "We owe it all to him." He went on to say that Oracle's strategy going forward in the software industry would be exactly the same as Microsoft's: integrated suites of products, sold in high volume and for low prices.
Larry sees the bright side
Note the total absence of financial talk. No need for that. Times are tough, and Ellison's the first to admit it. That's a strength for Oracle (ORCL: Research, Estimates), of course. Ellison guesses that tech spending won't ever return to where it was. But with so many software companies becoming irrelevant, the competition for remaining budgets will be easier.
Ellison took the occasion of his meeting with analysts to answer their concerns about the state of the company. Oracle needs no No. 2, says Ellison, the sole leader of the company since former President Ray Lane left to become a venture capitalist.
And why, Ellison wonders, does everyone beat him up for the number of executives who've left to be CEOs elsewhere? PeopleSoft, Siebel, Veritas and Salesforce.com, to name a few, all are headed by former Oracle executives. It's considered a good thing that GE populates the CEO offices around the country. Why not Oracle?
As Ellison's world is largely black and white, it's always interesting to hear who he praises and who he dismisses. Dismissed are specialty software makers (his definition) Siebel Systems and I2, as well as IBM's software business.
Praised are SAP ("a survivor"), Microsoft (for its suites, not its applications), and IBM's consulting practice. At the low end of the applications business, Ellison also had surprising praise for a Silicon Valley neighbor, Intuit, which has been buying up a handful of nice software providers, a trend noted recently in this space.
Buy Oracle's stock? There's no hurry on that -- the business isn't going anywhere. But then the company isn't going away either. And neither is Ellison.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at email@example.com.
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