Never one to be shy and retiring, Larry Ellison is giving the impression that he is enjoying himself, Fran Howarth of Bloor Research writes.
Well-known for his abrasiveness and for being someone who does not suffer fools gladly, Ellison stood up to answer questions at a recent briefing for financial analysts, during which he cracked a string of jokes - some of which might have been worthy of an Italian politician.
Ellison appears to believe that the acquisition of PeopleSoft is only a matter of time. Pointing out that the largest enterprise applications vendor, SAP, is larger that the number two, three and four challengers combined, he doesn't appear unduly worried about any government blocking the deal.
Asked what steps Oracle would take to push the deal forward, Ellison stated: "If the government says we can buy it - that's it." If allowed to continue pursuing the acquisition, the first step is to get the poison pill removed. And, if that doesn't work, Oracle will take control of the board at the next PeopleSoft shareholder meeting in June 2004 and push the deal through.
The reason is that Ellison is absolutely dedicated to the idea of an all-encompassing suite of applications, integrated into infrastructure technology. The reason for this is that integration, services and maintenance cost so much more that just purchasing a software licence - making best-of-breed point solutions too expensive and complicated to run. And it is only when the applications are tightly integrated and coupled to a good underlying technology base, running off a single database, that companies can achieve the scalability, flexibility and reliability that they require to run their businesses.
According to Ellison, there are four types of technology company right now: companies with products based on a single area of functionality; single product companies; best-of-breed vendors; and integrated suites. But only one type is going to survive. Of the first, Ellison points to some of the companies that have sprung up in recent years offering solutions for procurement and sourcing - or, in Ellison terms, "one-feature" companies. According to him, most have ceased to be a factor in the market and many more will fail.
Then there are the one-product companies, such as i2 in the supply chain market. Ellison doesn't have much time for them either, contending that the integration costs are too prohibitive, making the software too expensive to run. He doesn't think there is much of a future for one-product companies.
Companies offering best-of-breed solutions may have more of a fighting chance, according to Ellison, but he points out that implementing best-of-breed solutions is only a transitional strategy before companies move to a suite when it becomes available. He points to Siebel, which he believes has a best-of-breed CRM suite - although even that is expensive to implement since it lacks other applications, such as HR or financials.
The expense of the implementation costs means that best-of-breed solutions only have real applicability for the largest organisations. He points to Siebel's claims that it has the top ten companies in certain vertical industries, such as insurance and banking, as customers - but retorts: "Yes. That's your market, man. No one else can afford you."
But, looking into his crystal ball, Ellison states that there are three companies that are going to make it: SAP, Microsoft and, of course, Oracle. He doesn't even count IBM as a survivor in the applications space, pointing out that it has tried to compete in the market, but its offering was flawed. According to Ellison, the shake-up has only just begun - only a surviving few will make it.