updated 06:30 pm EDT, Fri September 24, 2010
After acquiring Sun, silicon makes sense
Oracle CEO Larry Ellison has indicated he may acquire a chip maker to bolster the company's long-term position, despite its ranking as the third largest software manufacturer in the world. Following Oracle's acquisition of Sun earlier this year for $7.4 billion, Oracle is branching out from developing database management software, and is now also competing in the high-end server market. Recent years have had Sun using off-the-shelf x86 processors and struggling to compete against alternatives.
Despite a weak economy, Oracle posted a 25 percent increase in software sales this year, well above expectations, and is also set to invest a further $4 billion in research and development over the next fiscal year. The acquisition of a semiconductor firm would help Oracle deliver corporate customers a complete end-to-end solution for managing all their hardware and software technology backbones.
The timing would capitalize on an emerging trend towards cloud computing and away from a desktop-heavy focus. To address the opportunity, Oracle has previously rolled out new software packages such as Exalogic to better help companies manage cloud services.