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When I first heard Larry Ellison suggest at Sun's annual JavaOne conference last week that Oracle might get into the netbook business, my knee-jerk reaction was that this had all the markings of a colossal blunder.
With Oracle on track to add Sun to its lineup, it obviously would have the wherewithal and bench strength to compete in the market for these low-cost devices. Still, it baffled me as to why anyone in their right mind would want to jump into a highly-competitive, low-margin market like this. There’s a reason why IBM sold its PC division to Lenovo in 2004, isn’t there?
But maybe I was being a bit hasty. After all, netbook sales are red-hot right now. IDC recently upped its forecast for 2009 netbook shipments by a whopping 20%. Besides, there are potential synergies for Oracle and Sun in this space.
I decided to reach out to a few IT leaders for their reactions on this while attending The CIO Summit of America the other day in New York. The people I spoke to each raised valid points that would support Ellison’s rationale should he decide to jump into the netbook fray.
One IT executive I spoke to from a major media company pointed out one of the potential hooks for Oracle if it decided to create a netbook that could be used, at least in part, to function as an electronic reader like Amazon’s Kindle. Oracle database software could be used to store e-books while enabling users to store data about sections of the book they may want to revisit, he said.
On a broader scale, Oracle could also create and license a set of Java applications for a set of netbooks that it alone controls, as an IT executive for a life sciences company noted.
I’m still not sold on this. But maybe Ellison envisions a specific market opportunity that he’s not letting us in on just yet. With Oracle’s software arsenal and soon-to-be added Sun in its hip pocket, anything is possible.
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