Is Oracle on the electronics acquisition trail?

Yet chief executive Larry Ellison started the rumour mill going last week when he told an Oracle meeting 'you're going to see us buying chip companies'. The statement had an immediate beneficial effect on the share prices of companies like ARM and AMD. It had the reverse effect on Oracle's share price. Ellison, no stranger to stirring things up, started a hare running in the mid 1990s, when he predicted the future would be based around thin client computers, which he called network computers. The idea was that these lean terminals – some of the development work was done in the UK by Acorn – would replace pcs. Partly, the idea was a way to overcome the high price of pcs in the mid 1990s, partly, it was a way to sell more Oracle software. But rapidly decling pc prices rendered the idea redundant. Fuelled by our reliance upon electronic communications and the growth of cloud computing, data centres are now one of the biggest consumers of chips. As the amount of data flowing around networks increases, so too will demand for networking electronics. "Our strategy," Ellison told Oracle World 2010 last week, "is to take a lot of separate pieces that our customers used to buy as components ... and do preintegration, and deliver complete working systems." If Ellison does have ambitions to enter the electronics industry in a serious way, it's more likely Oracle will be looking for companies with innovative communications technology than processor developers.