Ellison: The Net will break Microsoft

"Right now, the center of gravity is the personal computer. The Internet is shoving the computer out of the center?my prediction is the PC will become a peripheral product," said Ellison, in a speech at the Bay Area Council Outlook Conference here. The annual event examines the economic future of Silicon Valley.

Regardless of the outcome of the government's antitrust trial, Oracle's chairman said the Internet is an "organic revolution" in the industry that is moving businesses and consumers away from Microsoft Windows and client/server-based computing to network computing.

"The labor to run PC networks has proved to be enormous?You had to hire all these expensive [information systems managers] to run around your headquarters to maintain all these desktops distributed all over the place," he said.

A better idea, he said, is the Internet. "You will change your corporate networks to look like the Internet, and you will stop scattering your applications across desktops," he said. "We will compete on quality, innovation, price, and performance and not on monopoly control. That's good for everybody except for one company."

The emergence of the Internet will force companies to think of competition globally, rather than locally, he said.

"Buyers and sellers will be matched by the computer for everything: books, CDs, clothes," he said. "You will have efficient electronic models for everything. It's an extraordinary opportunity, but terrifying. You have global access to markets, but also global competition."

The Internet will also change education as U.S. colleges offer courses and degrees online throughout the world, he said. "It means education becomes much less expensive," and accessible to more people, he said.

Competition, however, will increase as the global village shrinks, he said. "What happens when these very talented people around the world, China, India, Southeast Asia, get access to education?" he asked, adding that U.S. residents only make up 3 to 6 percent of the all students who receive math doctorates in U.S. colleges.

"The Internet does in fact change everything in my industry, your business, our economy, our culture," he said.