Oracle CEO condemns and compliments Microsoft

REDWOOD SHORES: Larry Ellison, chief executive at No. 2 software maker Oracle

Corp., on Wednesday took shots at, and paid rare compliments to, long-time rival

Microsoft Corp. and its leader Bill Gates.

Unveiling a back-end software product that aims to secure the mountains of

data produced by the ranks of corporate workers and make it easier to search,

organize and tend, Ellison said: "It's one set of tools to manage all your

data."

Ellison joked that it was Microsoft co-founder Gates who first identified the

need for such a product in a 1998 interview. "Bill's a genius,"

Ellison told analysts gathered at Oracle's Silicon Valley headquarters for the

company's twice-yearly analyst day.

"We don't need him working here. We just read what he says... It's

cheaper," he quipped. Ellison's new product, called Oracle Collaboration

Suite, targets Microsoft's Enterprise Core CAL infrastructure software. Ellison

said his new software product would enable users to store information from

email, voicemail, shared folders and group calendars in an Oracle database.

It would also allow users to access the information via Microsoft Outlook --

the email and calendar program sold by the world's biggest software vendor --

any Web browser, wireless devices and other means. Oracle's product is less

expensive and provides more security than the Microsoft version, Ellison said.

Merrill Lynch analyst Chris Shilakes, along with other attendees, said

Oracle's new collaboration product tied together several threads the company had

recently made public.

Seeking volume sales



Oracle's outspoken leader, who lately has lost ground in his battle to
unseat Gates as the world's richest man, said on Wednesday he looked to emulate

Microsoft by selling lots of low-priced product -- particularly collaboration

and application server software.

Oracle is second only to Microsoft in terms of operating margin strength. And

while much of Oracle's advertising is focused on its database battle with

International Business Machines Corp., Ellison conceded that Microsoft remains

his main focus.

"The only software company we care about a lick... is Microsoft,"

said Ellison, who also fielded questions regarding analysts' and investors'

major concerns: executive departures and competition in Oracle's key database

market. Ellison cited Oracle's operating margin strength in his defense of the

company's management structure, which has no second-in-command.

"I like the current model," he said. "Our profits have held up

brilliantly and that's a tribute to our executive team."

He again disputed the methodology behind a research report from a division of

Gartner Inc. That report said Big Blue -- helped by its acquisition of Informix

-- had bumped Oracle from its long-held position as the world's No. 1 provider

of database software, according to revenue.

Ellison, who renewed his call for audited database numbers from IBM, said

that 52 of the Fortune 100 companies run on Oracle's database, compared with two

that run on IBM's competing database product.

Growth opportunities



Oracle and other software makers have been hard hit by corporations'
stubborn reluctance to spend money on technology products. Oracle, in

particular, recently saw its annual revenues fall for the first time in the

company's 25-year history.

Oracle's shares are down 52 per cent from a year ago, compared with Microsoft

stock's 25 per cent fall. "We had market madness. We're now returning to

reality," Ellison said.

He predicted that revenue growth in the applications space would likely not

come by selling to the world's biggest corporations, which have already aligned

themselves with companies that sell software to automate accounting, sales and

other business functions.

The middle-market, and the high end of that market, is "where the action

is in the next five years," Ellison said. Chief financial officer Jeff

Henley, said while it was still difficult to forecast demand for Oracle's

products, he believed the worst was over.

(C) Reuters Limited.