"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.
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.