Billionaire Oracle CEO Larry Ellison doesn’t expect the U.S. economy to significantly improve until halfway through the next decade – a gloomy scenario he dubbed an L-shaped recovery.
“The American consumer is so deeply in debt, this is not going to come back, certainly for five years,” he told a packed ballroom at a Churchill Club event in San Jose. “I believe we’re going through some fundamental changes.”
In a wide-ranging and humor-filled chat with former Motorola (MOT) CEO and Sun Microsystems (JAVA) executive Ed Zander on Monday night, Ellison riffed about the state of innovation in the technology industry, Oracle’s (ORCL) acquisition of Sun, his sailing hobby, and the cloud computing trend. The event was a rare opportunity to hear Ellison talk off the cuff – he tends to be guarded with the press, and lately has done few interviews.
Ellison, 65, said that even after 32 years at the helm of Oracle, he doesn’t see retiring anytime soon. He intends to develop Oracle into a technology powerhouse that provides not just software, but computing, storage and networking gear. The company recently started mapping out its five-year plan, and he intends to continue at the helm at least long enough to execute it. “We’ll see how I feel after five years,” he said.
Below, some more gems from Ellison.
On the value of Sun to Oracle:
“If, just for one dollar, if we could buy IBM (IBM), HP (HPQ), Sun or any of these tech companies, I’m not sure we wouldn’t pick Sun.”
(As Ellison later pointed out, Sun is losing $100 million a month, while IBM makes a couple billion dollars a month. I think we know which he would actually buy for a dollar.) Ellison said he has no intention of spinning out MySQL, and said he feels confident that European regulators will approve the deal.
On his frustrations with how cloud computing has become a trendy term:
“Cloud? Clouds are water vapor. My objection to cloud computing is the fact that cloud computing is not only the future of computing, it is the present and the entire past. Google’s (GOOG) now cloud computing. Everybody’s cloud computing. … All it is, is a computer attached to a network. What are you talking about? What do you think Google runs on? It’s databases and operating systems and memory and processors! What are you talking about?”
On Microsoft’s (MSFT) relevance:
“They make a lot of money. I think they’re clearly relevant. I divide the computer industry into two groups. And I know for a long time I was constantly picking a fight with Microsoft. Now Oracle’s constantly picking a fight with IBM. Because you’ve got to pick your enemies very carefully, because you’re destined to become most like those enemies you select.”
“Microsoft, culturally now, is a very consumer-centric company. They’ve got the Xbox. They’ve got Zune. … I think they are obsessed with Apple (AAPL). They’re obsessed with Google. … Under the new administration at Microsoft, I see all of their energies going into being successful in the consumer space.”
On the Obama administration:
“I don’t know anyone who’s against universal healthcare coverage, but it’s going to be very expensive.”
“I voted for President Obama, and I’ll kind of confess to that right now. And I am surprised at how much spending there is. I am surprised that there are so many huge spending programs.”
On net neutrality:
“I think it’s very dangerous for the government to engage in pricing for companies. So I’d be a little bit worried if the government came in and did all the pricing for Safeway, priced food, even though food’s essential. I think net neutrality, or having lots and lots of government regulation about how the phone companies can price their network, which they built and they own, is very interesting. Now, it’s great for Google. And it’s really bad for the phone companies. In general I believe in free markets, and I think this is a case where government regulation is not necessary.”
On Oracle’s culture:
“We are the largest employer of MIT and Caltech engineers in the world. We are the largest employer of Stanford and Harvard, CMU mathematicians in the world. We are overwhelmingly dominated by engineering at Oracle. The idea that we are a sales and marketing company, which people will write about quite often, is ludicrous on the face of it. … The company is all about engineering. It’s the only thing that works. “