Larry Ellison on Microsoft’s Windows Monopoly
Oracle’s Chairman wonders: why do Oracle’s acquisition attempts face so much more hostility than Microsoft’s? (Part One of six.)
|At the Wall Street Journal’s D Conference this summer, Oracle CEO Larry Ellison gave Walt Mossberg and Kara Swisher his blunt opinions of both PeopleSoft and Microsoft.Question: What would your world look like if SAP and Microsoft merged?
Ellison: If the European regulators allowed us to do it, I’d merge. [laughter]. I suppose the next thing is for Microsoft to just buy all of its customersit would make it so much easier for them. Then all the purchases would be inter-company transfers of money.
I mean, it’s inconceivable to me that the number one software company in the world could buy the number three software company in the world, and the regulators wouldn’t notice this…
Question: Don’t you think about antitrust issues early in the merger process?
Ellison: Well, people talk about the Justice Department like there is some continuity there. The administration has changed. At one point the Justice Department thought that Microsoft was breaking the law, and in fact the judge found that they were breaking the law over and over again. The penalty was not one but several very nasty editorials in the New York Times. [laughter] I would look at that kind of severe penaltywhich is just dreadful during Thanksgiving dinnerand say, “Well, I’ve got $250 billion in cash but I have this terrible article hanging over my head.” And I’m sure the next time Bill plans a monopoly he figures that maybe the Washington Post will be next. [laughter]
You know, there’s been so much controversy about Bush’s preemptive war in Iraq…I can’t really discuss our policy versus Microsoft. We would like to strikethat would be nice.
Ellison: I don’t think any of us have stopped competing with Microsoft. Scott was paidwhat?$2 billion for a press release. [laughter] Our press releases are a billion a piece; we’re the low-cost provider. So, we’ll let them write it.
Question: You’ve had some other events on the company’s calendar recently, one of which is an antitrust case against the Department of Justice.
Ellison: The lawyers just send me out of town, anyway.
Question: Is that right?
Ellison: They feel that since they’re being paid to argue the case they should argue the case rather than me. Not an unreasonable position for them to take.
Question: So, how are things going? How would you argue the case?
Ellison: It’s not safe for me to go back north if I answer that question. Obviously we wouldn’t have gone to court unless we thought we had a good case. We think we have agood case. There are a lot of people in the industry who also think we have a good case. It really is up to our attorneys and the government’s attorneys and the judge especially, to come down with a decision. That’s how our country works.
Question: Mega competition versus narrow competition. Where do you think that is happening in the tech industry?
Ellison: Let me just make one general comment. People talk a lot about the Microsoft Windows monopoly. I talk a lot about the Microsoft Windows monopoly. One of the key sustaining aspects of the Microsoft Windows monopoly is Microsoft’s monopoly in applications. Making Office…that sustains the Windows monopoly. It’s extremely important if you want a monopoly in operating systems that you also have a monopoly in applications that run on that operating system. The fact is, it would be fairly easy for you to move to Linux if you could take Word and Excel with you. To a large degree, the applications monopoly sustains the operating system monopoly.
So if Microsoft wanted to further strengthen their Windows monopoly they would try to get more and more applications, either by acquisition [or their own development] and they’d try to keep applications out of our hands. The best way for Microsoft to sustain their Windows monopoly is to get more applications that run only on Windows.
We’re not going to do that. A company that Microsoft bought might find that its applications run only on Windows. Any company we bought…our applications will run on Linux and give you a choice.
So I think one of the reasons Microsoft isn’t excited about us prevailing with PeopleSoft is that we’ll make sure that our applications run on Linux and other systems, and that you’re not forced to go to Windows.