In their candor and substance, Larry Ellison’s remarks at a recent Churchill Club event in San Jose were infinitely superior to the shuck-and-jive partisan proselytizing he did last night at Oracle OpenWorld in San Francisco.
Then again, Oracle OpenWorld is a partisan event, where the faithful gather for reaffirmation and inspiration. So it was only to be expected that the Oracle CEO would erect, then systematically rip apart, a competitive straw man for the amusement and edification of his followers.
His target this year was IBM, which has been doing considerable damage to Sun Microsystems’ grip on its installed base of server customers. The reason IBM is able to plunder everything under the Sun (if you’ll excuse the pun) is because Oracle’s pending $7.4-billion acquisition of the latter is mired in an extended review, which could go well into January, by regulators at the European Commission.
During this review period, Oracle is losing tine and money, which usually amount to the same thing in business. By Ellison’s own admission, in his frank talk at the Churchill Club, Sun is losing $100 million per month as the two companies await definitive merger approval.
Losses on that scale make a man irritable.
That is why, even as he anticipates that the acquisition eventually will be approved, Ellison has no recourse but to don the verbal brass knuckles. He must masquerade an anxious defensive maneuver as a confident offensive thrust. But if anybody can do it, Ellison can.
IBM serves as a convenient punching bag. Like Microsoft, it’s an unalloyed competitor to both Sun and Oracle. Neither Oracle nor Sun has any use for IBM. That’s not the case with HP or Cisco, which figure to be future competitors of an Oracle-Sun combination. Those vendors have value as near-term partners, or, at the very least, as neutral parties.
Ellison wants to steer clear of fighting on more than one front. You might have noticed that he likes to isolate his adversaries, not picking a scrap with more than one at any given time. It’s a wise course, strategically and tactically. It’s also a bit of a feint, because Ellison knows — if his Sun strategy is pursed to its logical conclusion — he’ll be competing against not only IBM, but against Microsoft (with MySQL), against HP (in server and perhaps network hardware), and against Cisco (in the converged data center).
But, hey, why fight those battles now? Put the focus entirely on IBM, because that’s one of the companies, along with HP, poaching Sun hardware customers in the here and now.
I suppose Ellison’s speech to the loyalists at Oracle OpenWorld served its purpose. It had enough bon mots and red meat to keep them sustained and coming back for more. Even so, Ellison was playing a role, one he knows well. He talked a lot, but he said nothing new.