Oracle May Make Acquisitions to Gain Industry-Specific Software, Hurd Says

By Aaron Ricadela - Sep 27, 2011 4:32 AM GMT+0700
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Oracle co-President Mark Hurd. Photographer: Tony Avelar/Bloomberg

Oracle Corp. (ORCL), facing mounting competition from smaller, “boutique” rivals, may make more deals to purchase industry-specific software companies, co- President Mark Hurd said.

Oracle is focused on so-called vertical markets, such as financial-services customers, and acquisitions could be a part of that strategy, Hurd said today in his first interview with a business publication since joining the company. Still, Redwood City, California-based Oracle doesn’t feel pressure to tap its $31.7 billion in cash to make a deal, he said.

“There’s a lot of value in these industry verticals we’ve invested in over the years,” said Hurd, referring to software for the banking, telecommunications and retailing industries. “It’s hard to beat the returns the company gets.”

Oracle, the world’s largest maker of database software, also is seeking to spur sales by appealing to budget-minded businesses. The company’s hardware and software can boost efficiency, letting customers reduce the number of servers and databases they ran, Hurd said. Oracle plans to unveil new computer systems packaged with database software and other programs at its OpenWorld conference next week in San Francisco.

OpenWorld Show

The company also will release new software applications in its Fusion line at OpenWorld, stepping up competition with boutique companies that focus on specialized software applications, Hurd said. The company aims to repeat the success it’s had with last year’s crop of new products, he said.

“If you went back a year ago and looked at the amount of technology released at Oracle OpenWorld, you’d have to say it’s a tremendous yield,” Hurd said. “Next week we’ll announce even more.”

Oracle rose 81 cents, or 2.8 percent, to $29.71 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have climbed 10 percent during the past 12 months.

Chief Executive Officer Larry Ellison has spent more than $40 billion on acquisitions since 2005, including last year’s $7.4 billion acquisition of computer maker Sun Microsystems Inc. The takeover spree has also added programs that let companies manage human resources, operations and other complicated computing tasks.

Ellison also introduced a new computer system, the Sparc Supercluster, at an event at the company’s headquarters today. The product includes a Sparc T4 processor that can run Oracle’s database and a user’s applications faster than older Sun machines, Ellison said at the event.

“We think lots and lots of people are going to upgrade from their current Sparc systems,” Ellison said. “This is a really fast computer.”

Hurd joined Oracle last September, a month after he was ousted as Hewlett-Packard Co. (HPQ)’s CEO. Hurd was replaced at Hewlett-Packard by Leo Apotheker, who was forced out himself last week and replaced by former EBay Inc. CEO Meg Whitman. Hurd declined to discuss Hewlett-Packard in today’s interview.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net