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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

May 30, 2012 at 4:21 PM

D10: Oracle’s Ellison on cloud computing, sailing and more

RANCHO PALOS VERDES, Calif. _ Oracle Chief Executive Larry Ellison’s appearance at the All Things D conference opened, appropriately, with a video ad depicting Oracle catamarans charging through rough water off San Francisco.

After chatting about Ellison’s America’s Cup exploits, host Kara Swisher asked about his perspective as perhaps the longest running tech chief executive in Silicon Valley, having run Oracle since 1977.

Ellison responded with a discussion about how different networks – such as electrical and phone networks – are similar to the Internet. They are complex networks that consumers access with simple devices.

The personal computer became a complex device that people used to access the complex network that is the Internet.

Ellison recounted how the direction things were heading was obvious to him. He came up with the concept of a “network computer” or simple terminal connected to the Internet 20 years ago.

The network computer vision is becoming a reality as consumers are increasingly using simple devices such as smartphones and tablets to connect to the Internet, he said. (Although today’s phones and tablets are as powerful and technicially complex as PCs were a decade ago …).

“It’s taken a long, long time for the technologies to mature, the software and hardware technologies to mature, to where the Internet has become just that – enormously complex on one side but on the consumer side, very simple,” he said.

“We migrated the complexity off the desktop, away from the PC and moved that complexity into Internet servers,” he continued.

Swisher asked about Ellison’s early objections to the term “cloud computing.” Ellison said it’s a good brand; what he objected to was people using the term to say they’d come up with something new.

“I’m no longer resisting the name – call it whatever you want,” he said.

“I’m not interested in cloud computing?” he said. “I started NetSuite. NetSuite was my idea,” he said, referring to an early software-as-a-service company, which may now be called a cloud computing service.

Ellison saidi that six months after NetSuite started, Marc Benioff found out about it and “copied it” when he started Salesforce.com.

Swisher noted that Benioff – an Oracle veteran attending the conference – has just said “you were a great inspiration to him.”

“I’m flattered,” Ellison said.

Asked about Facebook, Ellison said he used it for awhile.

“In general my breakfasts are more interesting than my friends’ breakfasts… After about three months of this I finally stopped,” he said.

On Oracle’s acquisition of Sun, Ellison said the $5.5 billion deal has “already paid for itself.”

“It is enormously profitable already,” he said.

Although top-line sales are down 20 percent, profits are up by a factor of five.

“Our margins now in our hardware business are probably the highest margins of anyone in the server business,” he said.

Ellison said “hardware is so easy because most hardware is software. If you look at an iPhone, it’s beautiful … but 98 percent of the complexity is software, and arguably some of the chip technology.”

Ellison declined to comment on Oracle’s lawsuit with Google over Java technology, or its suit with Hewlett-Packard over his hiring of his friend, former HP Chief Executive Mark Hurd in 2010.

Then Ellison skewered Hurd’s replacement, Leo Apotheker, calling him “Leo-off,” a play on the pronunciation lei-oh.

On June 6 Oracle is announcing general availability of the “Oracle cloud” with applications including full ERP and CRM suites.

Ellison said that’s probably the day he’ll send his first tweet on Twitter.

To conclude, Swisher asked, what keeps you going?

“Red Bull,” Ellison quipped.

Then he said he’s fascinated by people and what can be done with technology “and to constantly test limits.”

Asked about doing more manufacturing of tech products in the U.S., as Apple’s Tim Cook discussed Tuesday, Ellison said Oracle already does some and manufactures high-end hardware in Hillsboro, Ore.

Ellison said one challenge is the shortage of manufacturing engineers in the country. He said the U.S. needs an “enlighted immigration policy” that invites people to were educated in the U.S. to work here as well.

“It’s just insane what we do,” he said.

Comments | More in | Topics: Billionaire techies

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