For instance, Ellison likes pairing the name Bill Gates with the phrase "convicted monopolist" whenever possible. More recently, Ellison made a point ofrather than reciting each letter, as the company prefers.
But Ellison's attack on SAP goes far deeper than words, as Oracle's recent acquisitions show. First, Oracle launched a full assault on joint rival PeopleSoft, which ended in aand one of the largest mergers ever in the software industry. Oracle quickly followed that up by for ownership of Retek, paying more than $600 million for the company--about twice its market value before the bids started rolling in.
Oracle has been gobbling up companies left and right in its efforts to overtake SAP in the market for enterprise applications software.
If Larry Ellison can pull it off, the buyout strategy has the potential to not only reshape his company but the entire industry. Specifically, it could legitimize mergers in a culture that tends to shun all things "not invented here," or "NIH" in Silicon Valley parlance.
After years of faltering in that $47 billion market, Oracle is charting a bold new course, analysts said. But it's risky, too. Big software acquisitions are rarely blazing successes.
If Ellison can pull it off, the strategy has the potential to not only reshape his company but the entire industry, one analyst said. Specifically, it could legitimize mergers in a culture that tends to shun all things "not invented here," or "NIH" in Silicon Valley parlance.
"It's important for Oracle and how the financial community looks at Oracle and how prospective (software) buyers look at Oracle," said AMR Research analyst Jim Shepherd. "It's also important for the industry, which is asking, 'Is Larry right? Is this the way the industry is going to develop in the future?'"
Of course, Oracle is no Baan. It's one of the most profitable and respected companies in software, with enormous resources and a globally recognized brand.
Oracle is also buoyed by its highly successful database management software business, whichdespite inroads by IBM and Microsoft. It's still Oracle's money engine, accounting for about three-quarters of overall revenue. So even if the applications effort fizzles, Oracle won't be in immediate peril, analysts said.
So why, then, does Oracle bother? For one thing, it wants to diversify its business beyond database software, where competition and open-source programs are increasing threats.
For another, business applications are a much bigger commitment for an IT buyer than are databases and other underlying technology. Business applications can have an immediate impact on workers and their productivity and are hard to replace once they're in. For that reason, the selection of an applications package can take months or years and often involves the top officers of a company. This gives suppliers considerable influence for years.
"If you really want to capture the hearts and minds of the IT food chain, you have to start talking about applications, not (behind-the-scenes) technology," said Joshua Greenbaum, analyst at Enterprise Applications Consulting.
But as an applications supplier, it helps to be big. SAP, the largest of the suppliers, with $9.7 billion in revenue last year, is forecasting 10 percent to 12 percent growth in software license sales this year. The rest of the market is growing revenue at about 6 percent annually.
That's why Oracle is so bent on bulking up. The company's last great attempt in that regard was with a much ballyhooed redesign of its programs called 11i. But the initial release of the product, and by the time Oracle worked out the kinks, a global recession put a damper on information technology spending that has yet to fully subside.
Now another redesign is in the works, and this one's even more ambitious. Under the code name, Oracle is combining its own software with programs from PeopleSoft, Retek and a company PeopleSoft had acquired called J.D. Edwards.
It's aiming to release a new product from that effort in 2008 and hopes to blow the competition away with it. In the meantime, SAP and Microsoft, a newer entrant in the market, are working on next-generation versions of competing products that are due out around the same time.
SAP executives are quick to dismiss Oracle's strategy, saying it's likely to get bogged down.
"You don't get more powerful by eating more," SAP Executive Board Member Shai Agassi said. "You get more bloated."
An Oracle representative defended the company's position, saying the acquisitions have strengthened its work force, product set and research capabilities.
And even SAP plans to pick up the pace on acquisitions. Executives say they're looking for small companies with interesting technology SAP doesn't already have, minimizing the chances for indigestion.
Oracle hasn't ruled out more acquisitions either. After all, two of its highest ranking executives, Co-Presidents Safra Catz and Charles Phillips, are former investment bankers.
In the short term, Oracle is likely to stick to smaller deals though, like the one it announced last week, a 120-person company specializing in computer-user authentication.
Analysts also expect more Retek-like deals from Oracle. Retek was a midsize company with lots of big retail customers that had sought a buyer. Applications companies with a strong presence in the banking, health care, government or pharmaceutical industries are likely next targets, said AMR's Shepherd.
But once things settle in the applications market, Oracle may dust offthat became public last year during the company's fight for PeopleSoft. On it were applications players Siebel Systems and Lawson Software, as well as numerous IT "infrastructure" companies, including BEA Systems, Sybase, Business Objects and Documentum.
Yet analysts are concerned about the law of diminishing returns. Already, Oracle is showing signs of it. The company'slast month showed that Oracle and PeopleSoft sold more software licenses as separate companies than they did as a combined one.
Oracle dismissed it as a blip in the transition, and stock traders showed mercy as database sales proved healthy.
But some analysts are doubtful. Goldman Sachs projects that Oracle's share of the applications license market will dwindle this year to about 20 percent, compared with 27 percent at the end of last year. Goldman has SAP climbing 7 percentage points over that time, to 70 percent.
The strategy is a long-term one, however. It could even take years to prove out, ensuring that Ellison & Co. have their hands full for quite some time.
"There are a lot of loose ends," Greenbaum said. "Oracle will be under the microscope for quite a while."