ORACLEWORLD - Ellison on PeopleSoft, software

Oracle CEO and President Larry Ellison was on hand at the OracleWorld 2003 user show Tuesday to field questions from customers and the press. He weighed in on a number of topics, including his company's efforts to take over PeopleSoft , grid computing and pricing plans. Excerpts of what he had to say follow.

On the status of the PeopleSoft acquisition:

The government is reviewing our acquisition. They will let us know what they think in October or November. We have our fingers crossed. We're very determined to complete this acquisition. We're very patient.

On how PeopleSoft users feel about the acquisition attempt:

"A great many PeopleSoft customers are pleased with this and have wished us luck in acquiring PeopleSoft — even people that plan to stay on Peoplesoft. They would like to have a strong, reliable software vendor supporting the software. The combined business would be stronger than PeopleSoft by itself or Oracle by itself. It's not irrational (for a customer) to want to have a larger vendor."

On PeopleSoft CEO Craig Conway's comment last week that the PeopleSoft acquisition is dead:

"It's interesting that Craig said it was dead and he extended (to customers) the offer of a money-back guarantee for PeopleSoft. He said we need to give money back in case PeopleSoft is acquired. The man has to learn to be consistent."

On the applications business in comparison to the infrastructure business:

"There are an equal number of engineers in both businesses, 5,000 in applications and 5,000 in infrastructure. We apply equal resources in both businesses. We're No. 1 in infrastructure and No. 2 in applications (in the market). I read constantly (that) our apps business is a failure because we're No. 2. I think you'll find we sell more applications software than the combined PeopleSoft and JD Edwards (company)."

On what's new with the grid computing concept:

"We started the clustering quest almost 14 years ago. In Oracle Version 6, we built the foundation of the system but never got it fully working. With every release, it got a little bit better. Now with 10g, you really can cluster across lots of machines, and we have the management tools to go along with it."

On how long it will take for grid computing to be accepted and how it will affect the big server companies:

"Most customers don't use RAC (Oracle's Real Application Clusters clustering technology). Most still operate on the principle of using one large machine as the database server. It's not going to happen overnight, but there will be an inexorable move. The economics are compelling, the reliability is compelling. I don't think large machines will disappear overnight. This begins a trend. We're going to see a gradual movement from (using) one big server to the grid approach. There is plenty of time for Sun and HP and IBM to react."

On the future of the industry:

"There will be a few general-purpose suppliers like us and Microsoft, and then an awful lot of specialized companies."

On pricing:

"Counting processors is very hard. It's very hard to count users. What makes much more sense is the notion of an enterprise license. You pay so much per year for the use of Oracle software and use as much as you want. That's where everything is going."

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