Rodent Regatta

Everybody’s talking about consolidation in the I.T. business. This week Larry Ellison of Oracle predicted a shake-out of 1000 or more technology companies. [link is to the Wall Street Journal(WSJ) and a subscription may be required.] Here’s how the WSJ characterized Ellison’s prescription for survival:

• Recognize that simpler is better. He hopes to switch Oracle’s operations, which span 160 countries, from 1,500 servers to just 24 Dell Linux boxes.
• Don’t reinvent the wheel. To fly to California, you shouldn’t have to design your own plane, build your own airport and learn to fly. But that’s how much of the tech industry operates.
• Take advantage of proven technology. ”Every child’s unique. Every computer doesn’t have to be.”
• Remember specialization of labor and economies of scale. ”Companies will start doing less of their own computer operations and outsourcing more.”
• Take cues from the customer. ”We became the largest industry in the world by selling things that people didn’t want to buy.” That has to stop, he says.

A few other clips from the article:

• In 1995, he predicted the death of the personal computer.
• These days, he unabashedly enjoys the finer things in life: He owns a pleasure yacht called Katana and a racing yacht, and last year he put up about $80 million to finance his own America’s Cup team.
• He owns three palatial homes in Northern California, including a Japanese-style mansion that is being built in a traditional style without nails.
• He has been married and divorced three times; he’s currently engaged to a novelist.

BOTTOM LINE (my beliefs): The tech industry may consolidate. The tech industry will probably continue to grow at a rate that is faster than the economy at large. The biotechnology industry will grow at rates resembling those of the the computer industry in its prime.