Ellison Squashes Oracle-NetApp Acquisition Rumors3:18 PM EST Wed. Oct. 03, 2012
Despite rumors to the contrary, Oracle is not looking to acquire NetApp, the storage industry's No. 2 independent vendor.
That's the word from Oracle CEO Larry Ellison in response to a question about his company's acquisition strategy from a CNBC reporter during the Oracle OpenWorld conference.
In a video of Ellison's remarks at the conference, Ellison said that his company is currently not planning any major acquisitions.
"We are really focused on the fact that over the last seven or eight years we have re-engineered all our applications for the cloud," he said. "That's a huge opportunity for organic growth."
An acquisition of NetApp would not fit current Oracle strategy, Ellison said.
"NetApp, again, that would be a very large acquisition," he said. "They are a good company. But right now we are not focused on any large acquisitions. We think the organic growth opportunity for us in the cloud and with engineered systems are enormous, and that's what we're focused on."
Instead, Oracle is focusing on many of its other acquisitions and its organic development to develop what the company calls "engineered systems," or IT solutions that combine server and storage platforms from its 2010 Sun Microsystems acquisition with versions of its enterprise software optimized for best performance on that hardware.
For instance, Ellison cited the company's new Oracle Exadata X3 Database In-Memory Machine. Officially unveiled Monday at Oracle OpenWorld, the Oracle Exadata X3 Database In-Memory Machine can store hundreds of Terabytes of compressed user data in Flash and RAM memory as a way to improve the performance of database and cloud computing workloads.
"We think we have all the assets in house to enable us to grow very rapidly on an organic basis."
Many industry watchers are not so sure and have been predicting for months that Oracle will acquire NetApp as a way to regain market share in the all-important storage industry.
Oracle last month reported first fiscal quarter 2013 sales down 2 percent over the same period last year, led by a huge 24 percent plunge in hardware sales during the same period.
NEXT: Oracle's Storage Business Could Use A Boost
Oracle's storage revenue is also fading away. During the first quarter of 2012, Oracle's storage hardware revenue plummeted 17.5 percent to $70.4 million, according to analyst firm Gartner. However, Oracle's NAS business grew 42.9 percent over last year thanks to the strength of its ZFS file system-based appliance family, Gartner said.
NetApp, in that same report, retained its customary No. 2 position in the storage hardware market with first-quarter revenue of $691.5 million, up a solid 9.8 percent over last year. That gave NetApp a 12.7 percent share of the overall market, up from its 12.5 percent share last year.
Building or acquiring a significant storage business would help Oracle be more competitive in the burgeoning converged infrastructure business.
While Oracle competitors including IBM, Hewlett-Packard, Cisco, EMC and Dell have introduced converged infrastructure solutions that tie server, storage and IP networking into a single vendor, integrated solution for building data centers and moving customers towards cloud computing, Oracle's engineered solutions either lack a solid storage component or include its ZFS technology.
PUBLISHED OCT. 3, 2012