Oracle has recently let the whole world know that it has no interest in continuing with the development of Sun servers based on the x86 architecture as the company regards these as “commodity” items with low profit margins.
"I do not care if our commodity x86 business goes to zero. We do not make any money selling those things.
"We have no interest in selling other people's intellectual property; commodity x86 includes Intel IP and Microsoft IP,” said Larry Ellison,Chief Executive Officer of Oracle
, during a conference call with financial analysts on Tuesday.
“We do not make money selling that stuff, and we are phasing out that business. We have interest in selling systems that include our IP. That's how we're going to drive the profitability of our overall Hardware business, eventually," continued Ellison.
Oracle's CEO believes that its company would be better served if it will continue with the development of its Solaris line of servers
based on the SPARC processor architecture, which will bring it not only higher margins but also profit from support, service and upgrades.
"Our engineered systems will be growing at such a high rate that the overall hardware business top line will grow also.
“But what is really important is to continuously grow our margins and profitability in the hardware business so we can meet [our] goal, which is getting back to our pre-Sun acquisition's overall profit margins," added Mr. Ellison.
Oracle has acquired Sun in January of 2010 as the company wanted to gain access to the Solaris operating system as well as to the Java technology.
Sun has been manufacturing x86
system since the late 80's when it retailed an Intel 80386-based machine which run SunOS. Oracle will start to phase out x86 hardware in fiscal year 2013, which begins in mid-2012. (via Xbit Labs