(FORTUNE Magazine) – Oracle CEO Larry Ellison has long been the enfant terrible of the software industry. But at age 61 he's calmer, a maturation that parallels that of the tech industry that he's helping consolidate. Oracle recently completed its first quarter after buying PeopleSoft, a hard-fought deal that took 18 months to complete. Results were so good that Oracle's stock, which has been flat for nearly two years, jumped 6% in a day. That afternoon--whaddaya know?--Ellison dropped by to chat with FORTUNE editors and senior writer Adam Lashinsky about why the merger worked, what Oracle isn't buying next, and how long he plans to remain CEO. Edited excerpts follow.

It looks as if the PeopleSoft acquisition has succeeded financially. What was the secret?

The secret is to get all the decisions about people and the organization made in 30 days. The biggest problem with acquisitions is lingering over decisions, and that leaves people wondering if they have a job. We got it done in the first month, and today we have one application sales force, one application-development organization. The integration is complete, and we are benefiting from the improvement in scale.

But speed isn't everything, is it? HP merged quickly with Compaq, but few people view it as a great deal.

Hewlett-Packard bought a business that had very, very thin profit margins where there was no intellectual property whatsoever. We were a merger of consolidation. No one thinks the application-software business is a bad business. We wanted to get bigger. In the software business your engineering investments are fixed. The only way you can grow is to have more customers. So it wasn't a merger of diversification. HP was never an efficient operator. In fact, technology companies in general are very badly managed.

So if not your neighbors, who are your role models?

I am Oracle's point person for only one customer--GE. I spend an awful lot of time at GE management meetings, and it's dazzling how well run they are compared with any technology company. They're not in businesses with gross margins of 100%. They do acquisitions very well, and they watch every penny.

How do you improve your margins?

Scale is everything in software. It means you can charge less while investing more, because you have more customers to cover the costs of generating your ideas.

Who are you going to buy next?

We have a five-year plan, which says we're going to grow our profits in excess of 20% per year in the next five years. We did 31% last year. We think our organic growth rate, ignoring all acquisitions, is in the mid-teens. So we're going to have to do some targeted acquisitions to meet those numbers.

How about Salesforce.com, of which you own 4%?

We've looked at a couple hundred companies, including Salesforce.com. But we're not going to buy them. [On July 5, Oracle announced that it's buying software maker ProfitLogic, whose products help retailers make inventory, pricing, and merchandise decisions.]

For years Oracle wasn't acquisitive. What changed?

The industry. It's in a phase of consolidation. Silicon Valley's fantasy is that it's forever young, which is just gibberish. It's really quite astonishing how inefficient and how off-scale software companies are. Every idea does not justify the creation of a company. So there are far too many software companies, and they are going to disappear in fairly short order.

You have three co-presidents now but nary an heir apparent. How long do you plan to stick around?

They'll probably have to carry me out. I don't know if I'll stick around as long as Kirk Kerkorian, but he's 88. I'm just a kid.