“We are definitely not going to exit the hardware business. While most hardware businesses are low-margin, companies like Apple and Cisco enjoy very high-margins because they do a good job of designing their hardware and software to work together. If a company designs both hardware and software, it can build much better systems than if they only design the software. That’s why Apple’s iPhone is so much better than Microsoft phones,” stated Larry Ellison in an interview with Reuters that was filed with the SEC.

Despite Oracle’s $7.4 billion acquisition of Sun Microsystems, CEO Larry Ellison insisted that his company will remain in the hardware business.  When Oracle bought Sun, they were primarily interested in the way that Java and Solaris software interacted with their hardware.

Many analysts believed that Oracle would focus more on software after buying a company whose core products revolve around software and online databases.  Oracle also plans to invest more in Sun’s Sparc microprocessors.  Oracle believes designing their own chips is becoming increasingly important just like Apple is beginning to do.

“Sparc machines are much less expensive to run than Intel machines,” added Ellison.

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