“I don’t care if our commodity x86 businesses go to zero” or so says Larry Elison in a conference call yesterday with financial analysts.
“We don’t make any money selling those things” referring to a decline in revenue for lower-end servers, which were offset by an increase in revenue for high-end boxes. The strategy must seem to be working as Oracle’s numbers were up this past quarter and Larry predicts the same this quarter. In fact, the WSJ reported that “Oracle Corp.’s first-quarter profit climbed 36%“. They cite ORCL as “one of the best performing stocks in the S&P 500 today“.
HP seems to exhibit similar sentiments about its commodity business based on last month’s announcements, [… but maybe they are rethinking since apparently since their board is weighing firing CEO Apotheker as reported midday by the WSJ.]
Intel may be a little miffed, especially after Microsoft torpedoed their tablet strategy last week by announcing there would be “no Windows 8 ARM support for x86 apps “, but I certainly don’t see Larry’s words as an oracle (pun intended) predicting any big sea change here. Interesting comment though, especially in this economy.