Oracle Says Fear of Microsoft Will Drive Its Growth

By John Pallatto  |  Posted 2004-07-15 Print this article Print

Feeling the heat of Microsoft's ability to "sell more and charge less," Oracle officials say the company will continue to expand through acquisitions as customers seek to work with a smaller number of IT products and vendors.

REDWOOD CITY, Calif.–Viewing Microsoft as its most fearsome future rival, Oracle will continue to make strategic acquisitions that bolster its suite of enterprise application software and data management tools, company CEO Larry Ellison said Wednesday.

"Why do we fear Microsoft? They sell a lot of products," Ellison said. "The more product you sell, the less you have to charge for it," he said in addressing financial and industry analysts at company headquarters here.

If left unchecked, Microsoft Corp. will keep getting bigger and gradually will move deeper into the markets where Oracle Corp. has long been a prominent player, Ellison said. So, Oracle will follow suit to stay ahead of Microsoft. "Our strategy is to get bigger–sell more, charge less," he said.

Oracle is also focused more than ever on competing head-to-head with Microsoft in database software sales, Oracle chairman Jeff Henley said.

Oracle is able to win 90 percent of the deals when it is competing directly against Microsoft SQL Server for a new account, Henley said. "But there are a lot of deals that we never see" because the customer doesnt examine Oracle as an alternate to SQL Server, Henley said.

To read the details about Oracles fiscal 2004 financial results, click here.

Oracle is engaged in a "three- to five-year process to crush Microsoft," Henley said, because the latest versions of the Oracle database have the ease of use and data management features to challenge SQL Server in the SMB (small to midsize business) market where Microsoft has been strongest.

Oracle also will grow by continuing to acquire companies that will help it enhance its products or gain access to a wider customer base, he said.

Henley added that Oracle is in a good position to take advantage of a general consolidation of the software industry, which he said is already well under way as customers seek to work with a smaller number of IT products and vendors. Ellison said the shift means it will become harder for the industry to support a large number of competing vendors selling point solutions.

Next Page: Customers will drive consolidation.

John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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