The Oracle of Oracle Speaks

Larry Ellison is the oracle or Oracle. He makes public pronouncements less frequently than he once did, and that’s a shame.

Thankfully, as reported at the Fortune website, he broke his self-imposed vow of public reticence at a Churchill Club event in San Jose last night. It’s always good to be able to parse the master’s words.

And why not? Can a cat not look at a queen? Can a beggar not question a prince? Can a dog — yes, I would be that mangy mutt — not have his day?

Without further ado, then, I will present selected quotes from Chairman Larry, interposing my own remarks after each one.

On the economy:

“The American consumer is so deeply in debt, this is not going to come back, certainly for five years. I believe we’re going through some fundamental changes.”

It’s refreshing to see such candor from somebody in a position of wealth and influence. If there’s self-interest in this remark, I’m struggling to detect it.

Unlike the talking heads on CNN and CNBC, Ellison is giving us the straight goods. As I’ve said before, the American consumer is tapped out, the halcyon days of endless IPOs and gold-plated stock options will not return, and whatever recovery we experience will be muted and tepid.

Ellison also begged to differ with economists and pundits who predict a “V” or “W” shaped recovery. What letter does Larry think will most closely represent the shape of the economic recovery? The letter “L.” Look closely at the letter “L.” It will become evident that Ellison is forecasting a recovery not worthy of the designation.

Again, he’s right. For the last while, the American economy repeatedly has called on its consumers to lift it out of the doldrums. George W. Bush even told people to go shopping after the terrorist attacks of 9/11. But the frenzied shopping has come to an end. What worked for the US economy before won’t (and can’t) work now. It’s time for a new playbook.

On Sun’s value to Oracle, Ellison said:

“If, just for one dollar, if we could buy IBM, HP, Sun or any of these tech companies, I’m not sure we wouldn’t pick Sun.”

That’s disingenuous. Where did the candor go?

As Jon Fortt of Fortune points out, Sun is losing $100 million a month, while IBM makes a couple billion dollars a month. Ellison didn’t get to where he is today by picking losers.

On Oracle’s ultimate intentions for MySQL:

“No, we’re not going to spin [MySQL] . We are keeping everything. We’re keeping tape. We’re keeping storage. We’re keeping x86 and SPARC. And we’re going to increase investment in all of them.”

This is a problem, but it isn’t insurmountable. The European Commission clearly has concerns about what Oracle, as the pending owner and custodian of MySQL, will ultimately do with it. That’s the reason the EC held up Oracle’s acquisition of Sun, subjecting it to an extending review that will last into early 2010.

On whether the European regulators will approve the acquisition:

“The US took their time and deliberations and cleared it. The Europeans have to do their job, but I think once they do their job, they’ll come to the same conclusion.”

I think he’s right. That said, you’d never want to bet the house on a decision being mulled by European regulators.

On the consequences of the acquisition’s delayed approval:

“The longer this takes, the more money Sun is going to lose, and that’s not good for anybody.”

Well, the delay isn’t good for anybody affiliated with Oracle or Sun, but I don’t see HP or IBM, or even Microsoft and SAP, shedding anxious tears or rending clothes in anguish. To the contrary, those companies are eagerly rubbing their hands together and hoping the delay continues indefinitely.

On cloud computing:

“Cloud? Clouds are water vapor. My objection to cloud computing is the fact that cloud computing is not only the future of computing, it is the present and the entire past. Google’s now cloud computing. Everybody’s cloud computing. … All it is, is a computer attached to a network. What are you talking about? What do you think Google runs on? It’s databases and operating systems and memory and processors! What are you talking about?”

Regardless of whether you think cloud computing means “a computer attached to a network” or “never having to buy another server again” (because your applications are served up remotely), the definition of cloud computing should be readily understood by everybody. Right now, that’s not the case. That’s because cloud computing has become a marketing buzzword, an intentionally ambiguous phraseology meant to create an impression of fuzzy warmth in those that hear and see it.

Score another one for Larry. I wish he’d speak publicly more often.

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