I just told you that Oracle (Nasdaq: ORCL) would be getting out of the business of developing its own semiconductor chips. "Commodity chips have caught up with Sun -- sorry, with Oracle," I wrote. "Why spend the resources to develop proprietary chips with limited real-world advantages when you can just buy processors off the shelf and build similar systems?"
Open foot, insert mouth. No wait -- the other way around.
The very next day, Oracle CEO Larry Ellison took the stage at the annual analyst meeting to prove me wrong. "You're going to see us buying chip companies," he said to allay fears about SPARC chips going unsupported. More chips, not less -- I got the equation exactly backward.
Ellison's idea is to emulate Apple (Nasdaq: AAPL), which stacks layers of proprietary software on top of other layers of proprietary hardware, all the way down to the chip level these days. Oracle would obviously be interested in server-oriented chip designers, which narrows the list of potential targets down to Advanced Micro Devices (NYSE: AMD), the semiconductor division of archrival IBM (NYSE: IBM) (but good luck swinging that deal, Larry), or supercomputing wannabe NVIDIA (Nasdaq: NVDA).
Given the focus on power-efficient datacenter operations that is spreading throughout the IT sector, one of the many vendors designing chips around ARM Holdings (Nasdaq: ARMH) technology might also fit the bill, and would follow exactly in Apple's footsteps. ARM itself sounds less likely; Oracle would be better off signing an ARM license for the old Sun guys to play around with than buying the licensor itself. There's a whole hornet's nest of conflicts of interest if any of the big technology names were to buy that company right now.
There's apparently an internal roadmap for SPARC processors stretching into 2015, and Oracle says it wants more of that hot chip action. Fair enough, Larry. Go build some database appliances and business-intelligence-in-a-box systems. I'm still not sure that's what you really want or where you should go, but who am I to judge a successful billionaire?
Maybe you should be the judge, dear reader. Jump down to the comments box below and tell me why Oracle needs more chip technology under its belt -- or not.
