OracleWorld: Ellison predicts downturn will lead to killing field of vendors

Oracle is in talks to buy all or part of Hewlett-Packard's middleware product portfolio, Oracle chairman and chief executive...

Oracle is in talks to buy all or part of Hewlett-Packard's middleware product portfolio, Oracle chairman and chief executive Larry Ellison confirmed at the OracleWorld conference in Copenhagen, Denmark.

His keynote address to the conference also predicted a dramatic consolidation among systems vendors, which will limit the choices for IT users. "That is not entirely good news," the Oracle chief warned.

Ellison would not discuss the talks but did say that buying HP's middleware business would be a "tiny" acquisition that was comparable to Oracle's takeover of WebGain's developer tools last week.

The HP middleware portfolio includes a J2EE (Java 2 Enterprise Edition) application server, a transaction server, a messaging server, various XML tools, HP's eSpeak software for building network-based services and its Process Manager business modelling tool.

Ellison said that Oracle's own 9i Application Server "is pretty much fleshed out" and that Oracle does "not need to buy an application server".

Ellison used his keynote presentation to promote Oracle's Real Application Clusters on Linux machines and attacked Oracle's competitors.

Answering a conference attendee's question about how Oracle will be able to grow while IT budgets are tight, Ellison predicted "a killing field" because of the economic slump and said that Oracle does "not need an IT spending recovery to grow".

"It will be utterly brutal." Ellison said. "You are going to have a consolidation of [IT] spending on three or four survivors and those survivors will do extremely well."

Supply chain specialist i2 Technologies and procurement software makers Ariba. and CommerceOne are among the companies that Ellison believes "will vanish". Their business will go to others, including Oracle, Ellison said.

Ellison also launched a frontal assault on BEA Systems, its chief rival in the J2EE application server market. BEA is the worldwide market leader in that market in terms of revenue, according to several analyst firms. Ellison, who claims Oracle's application server already leads the market in terms of user numbers, said Oracle will pass BEA in terms of revenue next year.

"I think we will be first in terms of revenue in a year," he said, adding that BEA may be the next company to go under. "BEA is under tremendous pressure as a niche player reliant on one product."

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