Oracle's recently announced acquisition of Sun Microsystems offers a vast range of technology options for the database giant, and Ellison believes that Sun has a strong role to play, particularly in the development of systems that offer a combined hardware/software solution.
"We are definitely not going to exit the hardware business. While most hardware businesses are low margin, companies like Apple and Cisco enjoy very high margins because they do a good job of designing their hardware and software to work together," he said.
"If a company designs both hardware and software, it can build much better systems than if they only design the software. That's why Apple's iPhone is so much better than Microsoft phones.
"Oracle started designing hardware and software to work together a few years ago when we began our Exadata database machine development project. Some of our competitors, Teradata and Netezza for example, were delivering preconfigured hardware/software systems, while we were just delivering software.
"The combination of hardware and software has significant performance advantages for data warehousing applications. We had to respond with our own hardware/software combination."
Of particular interest to Ellison is Sun's SPARC processor business, an area that he is keen to expand because of the obvious benefits of designing bespoke chips for particular systems.
"Once we own Sun we're going to increase the investment in SPARC. Our primary reason for designing our own chips is to build computers with the very best performance, reliability and security available in the market," he said.
"Some system features work much better if they are implemented in silicon rather than software. We'll be able to plan and synchronise new features from silicon to software, just like IBM and the other big system suppliers."
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