Oracle (ORCL) is finally completing its buyout of Sun Microsystems. Sun has a history of serial layoffs that often involved thousand of people, and the conventional wisdom was that Oracle would cut more jobs as it integrated the company into its operations.But the conventional wisdom was wrong, as it often is with Oracle's offbeat founder, billionaire Larry Ellison. He has decided to exploit Sun's background in hardware and double down on his bet on Sun's products. That's prompting Oracle to hire 2,000 people to create and market large computer systems.
According to The Wall Street Journal, Ellison says he has believed for some time that the future of computing is systems that combine hardware and software. Oracle is the world's largest business software company, but it has never had any hardware operations to speak of.
The risk Ellison is taking is considerable. Software margins are generally better than those for hardware because of the cost of manufacturing hardware components. By moving in this direction, Oracle will be going head-to-head with large companies like IBM (IBM) and HP (HPQ) in the competitive world where hardware and software are bundled together.
But Ellison has faced long odds before when he bought and integrated other firms into Oracle. And it bears remembering that Oracle's shares are up almost 80% over the last five years. IBM's are up less than 40%.
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