CNBC's Maria Bartiromo Talks with Oracle CEO Larry Ellison

Oracle CEO Larry Ellison sat down for a one-on-one with CNBC's MARIA BARTIROMO. Below is a transcript from the segment:

MARIA BARTIROMO: JOINING ME RIGHT NOW IN A CNBC EXCLUSIVE IS ORACLE CEO Larry EllisON. IT IS GREAT TO HAVE YOU ON THE PROGRAM.

Larry EllisON: HI MARIA.

BARTIROMO: THANK YOU SO MUCH FOR JOINING US. SO HERE WE ARE AT OPEN WORLD. I WANT TO FIRST—WE SPOKE TO MARK HURD YESTERDAY SO I’LL TRY NOT TO OVERLAP, BUT TELL ME FIRST WHERE ORACLE IS GOING AND WHAT YOU’RE ANNOUNCING HERE AT OPEN WORLD. A LOT OF TALK ABOUT THE CLOUD. WHY DO THE CLOUD NOW?

ELLISON: WELL I THINK, YOU KNOW, THERE ARE THREE TIERS TO THE CLOUD. BACK IN 1998 THE VERY FIRST MODERN CLOUD COMPANY NETSUITE WAS STARTED, SO THE CLOUD’S BEEN AROUND FOR A WHILE—

BARTIROMO: WHICH YOU S—YOU OWN 45% OF.

ELLISON: I DO, I DO. ACTUALLY MY FAMILY AND I OWN THE MAJORITY OF THAT COMPANY. I STARTED THAT COMPANY WITH EVAN GOLDBERG BACK IN 1998—VERY PROUD OF THAT. AND THEN MARC BENIOFF STARTED SALESFORCE.COM IN 1999, AND KIND OF THE MODERN CLOUD BEGAN BACK IN THE LATE ‘90s. ORACLE WAS A WELL ESTABLISHED SOFTWARE COMPANY AT THE TIME, BUT GRADUALLY WE HAVE BEEN MOVING OUR APPLICATIONS—OR RE-WRITING OUR APPLICATIONS FOR THE CLOUD. AND WE COMPLETED A SEVEN YEAR RE-WRITE OF ALL OF OUR APPLICATIONS – HUMAN CAPITAL MANAGEMENT, ACCOUNTING, FINANCE, CUSTOMER RELATIONSHIP MANAGEMENT—WE COMPLETED THAT LAST YEAR AND ANNOUNCED FUSION APPLICATIONS FOR THE CLOUD. WE ALSO PROVIDE OUR DATABASE IN THE CLOUD, THE NUMBER ONE DATABASE IN THE WORLD IN THE CLOUD, THE MOST POPULAR PROGRAMMING LANGUAGE IN THE WORLD, JAVA, IS FROM ORACLE, THAT’S IN THE CLOUD. FUSION MIDDLEWARE, THE MOST POPULAR MIDDLEWARE IN THE WORLD, IS IN THE CLOUD. AND THEN WE ANNOUNCED A WHOLE BUNCH OF ADVANCED TECHNOLOGY HARDWARE DESIGNED FOR THE CLOUD CALLED OUR ENGINEERED SYSTEMS.

BARTIROMO: SO IT’S FAIR TO SAY THAT YOU ACTUALLY HAD THE IDEA ABOUT THE CLOUD WAY BEFORE ANYBODY ELSE DID WITH NETSUITE. BUT WHY NOW? I MEAN, WHAT IS THE ADVANTAGE FOR AN ENTERPRISE OUT THERE TO PUT THEIR INFORMATION ON A CLOUD? SOME PEOPLE MIGHT SAY, YOU KNOW WHAT, IS IT SAFE THAT ALL MY DATA NOW IS ON THE CLOUD? WHAT DOES THAT MEAN?

ELLISON: WELL IT MEANS THAT THE COMPUTER INDUSTRY IS KIND OF COMING OF AGE, ADOPTING UTILITY MODEL OF COMPUTING. ALL OTHER NETWORKS HAVE A UTILITY MODEL, ANOTHER WORDS ELECTRICITY POWERED GENERATION. THE COMPLEXITY OF GENERATING POWER AND DISTRIBUTING POWER IS HIDDEN FROM THE CONSUMER OF POWER. CONSUMERS JUST PLUG IN TO THE ELECTRIC NETWORK. THEY DON’T WORRY ABOUT WHETHER IT IS GENERATED BY COAL OR SOLAR OR WIND OR HOW THE ENERGY IS CREATED. THEY IGNORE THAT. THAT IS HANDLED BY THE ELECTRIC SERVICE PROVIDER. THEY DON’T HAVE TO MAKE HUGE INVESTMENTS IN CREATING MORE ELECTRICITY THAT’S ALL DONE AS A SERVICE. COMPUTING IS NOW BEING OFFERED, FOR THE FIRST TIME, IF YOU WILL, OVER THE LAST FEW YEARS AS A SERVICE IN THE CLOUD. IT MEANS CONSUMERS DON’T HAVE TO GET BOGGED DOWN WITH COMPLEXITY OF COMPUTING AND THEY DON’T HAVE TO MAKE THAT HUGE CAPITAL INVESTMENT. THEY JUST PLUG IN, RUN THEIR APPLICATIONS.

BARTIROMO: TELL ME ABOUT THE WORLD TODAY, THERE IS A CONCERN THAT THINGS ARE SLOWING, NOT JUST AT ORACLE BUT THROUGHOUT BUSINESS BECAUSE OF THE GLOBAL SLOW DOWN, THAT’S WHAT WE SAW IN THE LATEST EARNINGS RELEASE THAT YOU REPORTED AND THERE’S A CHANGE IN TERMS OF DATA. DATA HAS CHANGED AND YOU’VE GOT TO KEEP UP WITH THIS CHANGING DATA COMING FROM ALL SORTS OF MOBILE DEVICES, ETC. SO TELL ME ABOUT BUSINESS RIGHT NOW AROUND THE WORLD. WHAT DO YOU SEE?

ELLISON: WELL ACTUALLY, OUR BUSINESS IS FAIRLY GOOD. I KNOW IN REPORTED U.S. DOLLARS OUR REVENUE DROPPED SLIGHTLY—A COUPLE OF PERCENT—BUT THAT’S REALLY BECAUSE THE U.S. DOLLAR STRENGTHENED, IT WAS AN EXCHANGE RATE CONVERSION. WE DO A LOT OF BUSINESS IN EUROPE AND WHEN WE CONVERTED THOSE EUROS INTO DOLLARS THIS YEAR WE GOT A LOT FEWER DOLLARS THAN WE DID THE PREVIOUS YEAR, I MEAN COMPARE THE TWO YEARS, WE ACTUALLY GREW OUR REVENUE BUT NOT IN TERMS OF DOLLARS. IN TERMS OF EUROS THEY WENT UP, ONCE WE CONVERTED THEM TO DOLLARS THEY WENT DOWN. SO OUR BUSINESS IS ACTUALLY FAIRLY GOOD. OUR SOFTWARE BUSINESS IS GROWING AND THE PART OF OUR HARDWARE BUSINESS THAT WE CARE ABOUT MOST, OUR ENGINEERED SYSTEMS, ARE GROWING AT OVER 100% RATE.

BARTIROMO: YOU’VE BEEN A REALLY SERIAL ACQUIRER AND THE GROWTH HAS SHOWN THROUGHOUT ALL THE DEALS THAT YOU’VE DONE. WHERE ARE THE HOLES? WHERE ARE THE OPPORTUNITIES TO GROW IN TERMS OF THE NEXT ACQUISITION? ARE YOU POISED TO DO ANOTHER DEAL SOON?

ELLISON: WE’RE NOT PLANNING ANY MAJOR ACQUISITIONS RIGHT NOW. WE ARE REALLY FOCUSED ON THE FACT THAT OVER THE LAST SEVEN OR EIGHT YEARS WE REENGINEERED ALL OF OUR APPLICATIONS FOR THE CLOUD. WE THINK THAT’S A HUGE OPPORTUNITY FOR ORGANIC GROWTH. WE’VE MADE A NUMBER OF ACQUISITIONS AS YOU POINT OUT, INCLUDING SUN MICROSYSTEMS. SUN MICROSYSTEMS HAS ENABLED US TO TAKE THEIR HARDWARE ENGINEERING TEAM AND COMBINE IT WITH OUR SOFTWARE ENGINEERING TEAM, AND DEVELOP THESE ENGINEERED SYSTEMS WHERE THE HARDWARE AND THE SOFTWARE IS ENGINEERED TOGETHER SO THESE SYSTEMS DEVELOPER MUCH GREATER SERVICE AT A MUCH LOWER COST THAN CONVENTIONAL COMPUTERS. SO WE THINK WE HAVE ALL THE ASSETS IN HOUSE TO GROW VERY RAPIDLY ON AN ORGANIC BASIS.

BARTIROMO: A LOT OF PEOPLE WONDER IF YOU ARE INTERESTED IN NETWORK APPLIANCES. IS THIS A DEAL YOU’VE LOOKED AT?

ELLISON: NETAPPS. AGAIN, THAT’D BE A VERY LARGE ACQUISITION. THEY ARE A GOOD COMPANY BUT RIGHT NOW WE ARE NOT FOCUSED ON ANY LARGE ACQUISITIONS. WE THINK THE ORGANIC GROWTH OPPORTUNITIES FOR US IN THE CLOUD AND WITH ENGINEERED SYSTEMS ARE ENORMOUS AND THAT’S WHAT WE’RE FOCUSED ON.

BARTIROMO: SO WHAT DO YOU SAY TO THE CRITICS THAT SAY, LOOK WHEN YOU STRIP OUT THESE ACQUISITIONS GROWTH IS NOT WHAT IT APPEARS AT FIRST GLANCE?

ELLISON: WELL LET’S LOOK AT WHERE WE’VE DONE INNOVATION. ENGINEERED SYSTEMS, WE TOOK OUR DATABASE AND SUN HARDWARE AND WE MADE A BUNCH OF CHANGES TO BOTH. BOTH ON THE HARDWARE SIDE USING AN INVENTIVE…NETWORKING, USING A LOT OF FLASH MEMORY, WE REENGINEERED OUR DATABASE TO BE AN IN MEMORY SYSTEM AND WE JUST ANNOUNCED EXADATA, VERSION X3, WHICH RUNS ALL OF YOUR DATABASE IN MEMORY DELIVERING PERFORMANCE 10 SOMETIMES 1OO TIMES FASTER. THAT’S A COMBINATION OF ASSETS WE ACQUIRED AND ASSETS WE’VE HAD FOR A VERY LONG TIME. THE SUN HARDWARE AND THE ORACLE DATABASE SOFTWARE COMBINE AND A NEW GENERATION OF SYSTEMS THAT WE THINK REVOLUTIONIZE SERVER COMPUTING.

BARTIROMO: THIS SOLUTION IS REALLY A TOP TO BOTTOM SOLUTION AT ORACLE AND YET, THIS IS SOMETHING I ASKED MARK HURD YESTERDAY, YOU’VE GOT THESE SMALLER COMPANIES, THESE UPSTARTS TRYING TO TAKE SOME MARKET SHARE, PARTICULARLY AS IT RELATES TO BIG DATA, THE OTHER DATA, SO HOW ARE YOU GOING TO ENSURE THAT ENTERPRISES OUT THERE ARE LOOKING AT ORACLE FOR THAT TOP TO BOTTOM SOLUTION AS OPPOSED TO DOING SOME BUSINESS WITH YOU FOR THAT TRADITIONAL DATA AND OTHER BUSINESS ELSEWHERE LIKE A SALESFORCE, LIKE SOME OF THESE SMALLER NON PUBLICLY TRADED COMPANIES.

ELLISON: WELL THERE ARE A LOT OF NICHE COMPANIES, YOU KNOW SALESFORCE IS VERY GOOD AT APPLICATIONS IN THE CLOUD FOR SALES AUTOMATION. WE HAVE A MUCH MORE COMPLETE SUITE OF APPLICATIONS IN THE CLOUD, WE DON’T JUST DO SALES AUTOMATION OR MARKETING AUTOMATION. WE ALSO DO ACCOUNTING AND FINANCIAL PLANNING AND HUMAN CAPITAL MANAGEMENT AND TALENT MANAGEMENT ALL OF THOSE THINGS SO WE HAVE A COMPLETE SUITE OF APPLICATIONS IN THE CLOUD. THAT’S SOMETHING A SMALL COMPANY CAN’T DO. THAT’S A LOT OF WORK. BUT UNDERLYING THAT COMPLETE SUITE OF CLOUD APPLICATIONS WE HAVE THE WORLDS NUMBER ONE PLATFORM. YOU KNOW, THE CLOUD IS DIVIDED UP INTO THREE PIECES, SAAS, THE APPLICATIONS, PAAS, THE UNDERLYING SOFTWARE PLATFORM AND INFRASTRUCTURE IS A SERVICE THE UNDERLYING HARDWARE AND OPERATING SYSTEM. ORACLE PARTICIPATES IN ALL THREE LAYERS OF THE CLOUD AND THAT’S WHAT CUSTOMERS WANT. WHEN CUSTOMERS BUY A CLOUD THEY GET APPLICATIONS, THEY GET A PLATFORM, A DATABASE, MIDDLEWARE JAVA, AND THEY GET THE UNDERLYING INFRASTRUCTURE, THE OPERATING SYSTEM VIRTUAL MACHINE AND THE HARDWARE. ORACLE IS THE ONLY COMPANY IN THE WORLD THAT INNOVATES AT ALL THREE LAYERS OR DEVELOPS, ENGINEERS, INVESTS AT ALL THREE LAYERS OF THE CLOUD. WE THINK IT IS VERY DIFFICULT FOR A NICHE PROVIDER TO COMPETE WITH US.

BARTIROMO: WE’RE GOING TO TAKE A SHORT BREAK LARRY BUT I’M GLAD YOU MENTIONED SUN MICROSYSTEMS BECAUSE A LOT ARE WONDERING WHEN WE ARE GOING TO SEE REAL GROWTH FROM SUN MICRO. GOING TO TAKE A BREAK, I’M GOING TO ASK YOU ABOUT THAT AND THEN ABOUT ALL THOSE BILLIONS ON THE BALANCE SHEET. HOW ARE YOU GOING TO ALLOCATE CAPITAL. WE’LL BE BACK IN A MINUTE OK?

ELLISON: OK

BARTIROMO: STAY WITH US, MORE WITH Larry EllisON COMING UP IN THIS EXCLUSIVE ON THE CLOSING BELL.

BARTIROMO: WELCOME BACK COMING TO YOU FROM ORACLE OPEN WORLD CONFERENCE I AM HERE WITH Larry EllisON. LARRY WE MENTIONED DEALS, ONE DEAL THAT HAS YET TO BE PROVEN ACCORDING TO THE SHAREHOLDERS AND ANALYSTS IS SUN MICROSYSTEMS. YOU’VE SAID THAT THIS BUSINESS THIS HARDWARE BUSINESS IS GOING TO GROW WHAT’S BEEN THE PROBLEM WITH SUN?

ELLISON: WELL WE HAVE TWO HARDWARE BUSINESSES WE HAVE A HARDWARE BUSINESS THAT CARE ABOUT THIS IS EXADATA EXALOGIC EXALYTICS KIND OF OUR NEW GENERATION OF HARDWARE AND SOFTWARE ENGINEERED TO WORK TOGETHER. SO THAT’S GROWING AT MORE THAN 100%. BUT THEN WE HAVE ANOTHER HARDWARE BUSINESS KIND OF THE OLD COMMODITY X86 BUSINESS WHICH IS SIMILAR IT IS BASICALLY TAKING INTEL MICROPROCESSORS ADDING MEMORY AND SELLING THESE COMMODITY BOXES AND THAT BUSINESS IS SHRINKING. SO WE’VE GOT TWO THINGS GOING ON WE’VE GOT THIS OLD SUN BUSINESS OF SELLING COMMODITY HARDWARE WHICH IS DISAPPEARING WHICH WE DON’T CARE ABOUT AT ALL AND OUR NEW BUSINESS OF SELLING ENGINEERED SYSTEMS WHICH IS MORE THAN DOUBLING. AND THE OLD BUSINESS IS SHRINKING SLIGHTLY FASTER THAN THE NEW BUSINESS IS GROWING. BUT THOSE TWO LINES WILL CROSS AT THE END OF THIS FISCAL YEAR AND WE’LL GET VERY RAPID GROWTH BECAUSE THE BULK OF OUR BUSINESS WILL BE ENGINEERED SYSTEMS AND THIS NEW VERY HOT UNIX BOX ARE SPARK T4 WHICH IS ALSO GROWING VERY, VERY RAPIDLY.

BARTIROMO: DO YOU SELL THE ONES THAT ARE NOT WORKING. I MEAN HOW DO YOU GET OUT OF THIS? HOW BIG OF A DRAG IS IT AND HOW LONG ARE YOU GIVING THIS BUSINESS?

ELLISON: YOU CAN SEE THE DRAG. OUR ENGINEERED SYSTEMS DOUBLED, OUR T4 BUSINESS IS GROWING DOUBLE DIGITS SO OUR HOT BUSINESSES THEY ARE GROWING VERY RAPIDLY. YET THE OVERALL HARDWARE BUSINESS SHRANK IN THE LAST SEVERAL QUARTERS. SO EVENTUALLY THE LARGE COMMODITY BUSINESSES BECOME SMALL COMMODITY BUSINESSES AND THE SMALL FAST GROWING ENGINEER BUSINESSES BECOME LARGE BUSINESSES THAT’S WHEN THOSE TWO LINES CROSS AND THEY’LL CROSS THIS FISCAL YEAR. AND THE OVERALL HARDWARE BUSINESS WILL GROW. IT’S HAPPENING EXACTLY AS WE EXPECT AND AS WE PREDICT. THE DIFFERENCE IS THAT THE BUSINESSES THAT ARE SHRINKING WE MAKE NO MONEY THOSE ARE THE COMMODITY BUSINESSES THE ENGINEER SYSTEMS BUSINESSES WHICH ARE DOUBLING WE MAKE A LOT OF MONEY BECAUSE WE ADD A LOT OF VALUE WE HAVE A LOT OF INTELLECTUAL PROPERTY. WE HAVE NO IP AN X86 BOX THE IP BELONGS TO MICROSOFT AND INTEL. WE ARE JUST A REDISTRIBUTOR OF THEIR TECHNOLOGY. WE DON’T CARE ABOUT THAT BUSINESS IT COULD SHRINK TO ZERO WE DON’T CARE.

BARTIROMO: LET ME SWITCH GEARS AND ASK YOU I CAME ACROSS A LOT OF QUOTES WHEN I WAS PREPARING FOR THIS INTERVIEW AND ONE OF THE QUOTES SAYS “WE WRITE SOFTWARE WE DO NOT WRITE CHECKS”

ELLISON: THAT’S AN OLD QUOTE.

BARTIROMO: AN OLD QUOTE. SO DOES THAT MEAN YOU ARE NOT CONSIDERING RAISING THE DIVIDEND? YOU HAVE ALL OF THIS CASH ON THE BALANCE SHEET SO YOU ARE NOT GOING TO DO A BIG DEAL. WHAT ARE YOU GOING TO USE THAT MONEY FOR? HOW ABOUT A DIVIDEND INCREASE?

ELLISON: WELL WE COULD DO A BIG DEAL AGAIN YOU KNOW DOWN THE ROAD. I AM JUST SAYING OVER THE NEXT COUPLE OF YEARS SENIOR MANAGEMENT DOWN TO INDIVIDUAL PROGRAMMERS AND SALES PEOPLE ARE FOCUSED ON ONE THING SELLING APPLICATIONS IN THE CLOUD, SELLING OUR PLATFORM IN THE CLOUD AND SELLING OUR INFRASTRUCTURE IN THE CLOUD. SO WE ARE LASER LIGHT FOCUSED ON THAT KIND OF ORGANIC GROWTH AND THAT HUGE ORGANIC GROWTH OPPORTUNITY FOR US. COUPLE OF YEARS DOWN THE ROAD WE COULD LOOK AT A BIG ACQUISITION AGAIN SO HAVING A LOT OF CASH IN THE BANK IS NOT A BAD THING. MY FRIEND STEVE JOBS KEPT LOTS OF CASH IN THE BANK.

BARTIROMO: I WANT TO ASK YOU ABOUT STEVE JOBS. I FEEL LIKE WHAT STEVE JOBS DID FOR THE INDIVIDUAL YOU’VE DONE FOR THE ENTERPRISE AND I KNOW THAT YOU WERE VERY CLOSE AND IT HIT YOU HARD WHEN HE PASSED.

ELLISON: YEAH IT WAS ALMOST EXACTLY A YEAR AGO WHEN HE PASSED AWAY. HE WAS MY BEST FRIEND FOR 25 YEARS. AND HE’S JUST IRREPLACEABLE. IRREPLACEABLE IN OUR INDUSTRY. IRREPLACEABLE AS MY FRIEND.

BARTIROMO: DO YOU THINK THAT APPLE WILL STILL HAVE THE INNOVATION, THE PRODUCTS IN THE PIPELINE GOING FORWARD THE WAY THEY DID WITH STEVE JOBS RUNNING IT?

ELLISON: I HAVE GREAT RESPECT FOR THAT COMPANY. I HAVE GREAT RESPECT FOR TIM COOK BUT I’LL SAY IT AGAIN STEVE’S IRREPLACEABLE. WE’VE ALL LOST SOMETHING. HE WAS OUR EDISON. HE WAS OUR PICASSO. THERE’S NO ONE LIKE HIM. AGAIN APPLE WILL CONTINUE TO THRIVE BUT NOT LIKE WHEN STEVE WAS AROUND.

BARTIROMO: WHAT ABOUT YOUR OWN LEGACY. I WAS TALKING TO ONE OF YOUR SHAREHOLDERS AND HE SAID LOOK I DON’T KNOW IF THIS IS THE MARK SHOW OR THE SAFRA SHOW. DO YOU HAVE A SUCCESSION PLAN?

ELLISON: RIGHT NOW THE PLAN IS FOR THE THREE OF US TO RUN THE COMPANY. ORACLE IS A COMPANY OF ALMOST 120,000 PEOPLE WE’VE GOT A LOT OF WORK TO DO AND I AM GOOD AT SOME THINGS. AND MARK IS GOOD AT SOME THINGS AND SAFRA IS GOOD AT SOME THINGS. SAFRA RUNS OPERATIONS, MARK RUNS THE FIELD ORGANIZATION AND I SPEND A LOT OF TIME WITH THE ENGINEERING TEAM. I GET A LOT OF HELP IN ENGINEERING FROM THOMAS CURRY AND John Fowler THESE GUYS DO SPECTACULAR JOBS ON THE SOFTWARE AND HARDWARE SIDE OF THINGS. SO WE HAVE A LOT OF TALENT. WE’VE GOT QUALITY AND QUANTITY AT ORACLE AND WE WORK PRETTY WELL TOGETHER AS A TEAM.

BARTIROMO: SO YOU ARE NOT INTERESTED IN DOING A SUCCESSION PLAN JUST YET? OR YOU’VE GOT IT IN YOUR HEAD BUT YOU ARE NOT SHARING IT?

ELLISON: WE’VE GOT A LOT OF PEOPLE THAT COULD TAKE MY PLACE AT ORACLE. I HOPE THEY DON’T DO IT TOO SOON.

BARTIROMO: I’VE GOT TO TELL YOU I WAS VERY IMPRESSED WITH THE WAY YOU HANDLED THE WHOLE MARK HURD THING. IT WAS A PUBLIC SITUATION WHEN HE WAS PUSHED OUT OF HEWLETT. IT WAS AN EMBARRASSING SITUATION FOR HIM. YOU SAID “THE HEWLETT-PACKARD BOARD JUST MADE THE WORST PERSONNEL DECISION SINCE THE IDIOTS ON THE APPLE BOARD FIRED STEVE JOBS MANY YEARS AGO.” WHY WERE YOU SO LOYAL AND YOU CAME TO MARK’S DEFENSE SO QUICKLY?

ELLISON: WELL I THINK THERE WERE TWO REASONS ONE MARK’S A FRIEND. BUT THE WAS LOOK WHAT MARK DID WHEN HE WAS AT H-P. PEOPLE FORGET HOW MUCH TROUBLE H-P WAS IN WHEN HE TOOK OVER. AND WHAT A SPECTACULAR JOB HE DID OVER THAT FIVE YEAR PERIOD AT H-P. YOU CAN LOOK AT THE RESULTS. IT IS A LITTLE BIT LIKE LOOKING AT THE APPLE RESULTS. H-P WITHOUT MARK HURD, H-P WITH MARK HURD, H-P WITHOUT MARK HURD. SAME THING WITH APPLE – APPLE WITH STEVE JOBS, APPLE WITHOUT STEVE JOBS, APPLE WITH STEVE JOBS. SO IS LEADERSHIP IMPORTANT I THINK IT IS REALLY IMPORTANT AND I THINK THE BOARD MADE A TERRIBLE MISTAKE WHICH TURNED OUT TO BE A HUGE DISSERVICE TO H-P EMPLOYEES. I LOVE THAT COMPANY. THE COMPANY H-P, I LOVE. EVERYONE WHO IS RAISED IN SILICON VALLEY THINKS OF H-P AS AN ICON. THEY DESERVE THE BEST LEADERSHIP AND MARK WAS PROVIDING IT. THESE GUYS AREN’T EASY TO REPLACE.

BARTIROMO: YOU ARE PROVIDING HERE. I DON’T EVEN WANT TO THINK OF ORACLE WITHOUT Larry EllisON.

ELLISON: WELL WE HAVE A LOT OF DEPTH. NOW WE’VE GOT MARK. YOU GUYS DON’T WANT MARK. WE’LL TAKE HIM. WE’VE GOT SAFRA. WE’VE GOT THOMAS AND JOHN AND LARRY TOO SO IT’S A GOOD TEAM.

BARTIROMO: LET’S TAKE A SHORT BREAK. WE ARE GOING TO CONVERSATION. WE ARE GOING TO TALK ABOUT ALLOCATING CAPITAL IN A DIFFERENT WAY. STAY WITH US.

BARTIROMO: WELCOME BACK, I’M BACK WITH AN EXCLUSIVE WITH Larry EllisON RIGHT NOW. AND LARRY, I’VE GOT TO TELL YOU, YOU REALLY DIDN’T EXACTLY ANSWER MY QUESTION ABOUT ALLOCATING CAPITAL. ARE YOU GOING TO RAISE THE DIVIDENDS?

ELLISON: WELL AGAIN, THAT IS A DECISION FOR THE ORACLE BOARD OF DIRECTORS. I CAN’T MAKE THAT ON MY OWN, BUT I BELIEVE WHAT WE ARE GOING TO DO IS GRADUALLY INCREASE THE DIVIDEND AS OPPOSED TO DOUBLING IT OR TRIPLING IT ALL AT ONCE, SOMETHING LIKE THAT. SO I THINK YOU WILL SEE GRADUAL AND REGULAR INCREASES IN THE DIVIDEND, BUT NOTHING DRAMATIC.

BARTIROMO: LET ME ASK YOU ABOUT YOUR OWN USE OF CAPITAL AND ALLOCATION OF CAPITAL BECAUSE WE KNOW THAT YOU HAVE MADE TONS OF HEADLINES RECENTLY. BUYING AN ISLAND IN HAWAII, LANAI. BUYING TONS OF HOMES. HOW MANY HOMES DO YOU OWN RIGHT NOW? FIFTEEN? ELEVEN?

ELLISON: WELL LETS SEE. HOMES THAT I LIVE IN? OR –

BARTIROMO: WHY DO YOU BUY THE HOME IF YOU DON’T LIVE IN THEM?

ELLISON: WELL FOR EXAMPLE, I BOUGHT A HOME IN NEWPORT, RHODE ISLAND WHICH I’M CONVERTING INTO A 19TH CENTURY EUROPEAN ART MUSEUM. SO I BOUGHT THE ASTOR MANSION ON CLIFF WALK IN NEWPORT, RHODE ISLAND AND I GOT THIS IDEA. MY FAVORITE MUSEUMS ARE THINGS LIKE THE FRICK MUSEUM IN NEW YORK AND THE Huntington Hartford IN PASADENA WHERE IT’S SOMEONE’S HOME THAT YOU WALK THROUGH. HOME AND GARDEN IN THE CASE OF THE Huntington Hartford AND YOU SEE THE ART IN A VERY COMFORTABLE, NATURAL SETTING ON A MUCH SMALLER, MORE HUMAN SCALE. SO I’M GOING TO START THESE ART MUSEUMS THAT ARE BASICALLY CONVERTED HOMES AND I HAVE ONE FOR MODERN ART, AND I HAVE ONE FOR 19TH CENTURY EUROPEAN ART, AND ONE FOR FRENCH IMPRESSIONISM. I’VE GOT JAPANESE. I OWN A HOME IN KYOTO, JAPAN ACTUALLY ON THE TEMPLE ON GROUNDS IN NANZENJI THAT IS GOING TO BECOME A JAPANESE ART MUSEUM. SO, A LOT OF THEM ARE MUSEUMS.

BARTIROMO: AND THIS IS A HOBBY OF YOURS?

ELLISON: WELL, WHEN I WAS A KID, THE FIRST THING I EVER WANTED TO BE WAS AN ARCHITECT. SO, I LOVE BUILDING HOUSES, REMODELING HOUSES, DESIGNING HOUSES, CONVERTING HOUSES. WE BOUGHT ANOTHER HOUSE IN MALIBU THAT WE ARE BUILDING. IT IS GOING TO BE A BOTANICAL GARDEN IN AN ART MUSEUM. SO I LOVE WORKING ON THESE PROJECTS. IT IS MY HOBBY. THE SECOND THING I WANTED TO BE WAS AN AIRLINE PILOT OR FIGHTER PILOT. SO, I’M ALSO AN AMATEUR ARCHITECT AND THEN I’M PILOT AS A HOBBY.

BARTIROMO: YOU MUST BE A LOT OF FUN TO GO SHOPPING WITH. AND THE ISLAND OF LANAI. I MEAN, THAT WAS SUCH A – YOU LOVE HAWAII OR WHAT WAS THAT?

ELLISON: I LOVE HAWAII AND LANAI IS A VERY INTERESTING PROJECT. THERE, WHAT WE ARE GOING TO DO IS TURN LANAI INTO A MODEL FOR SUSTAINABLE ENTERPRISE. AND WHAT I MEAN BY THAT IS – AND LANAI, I OWN THE WATER UTILITY, I OWN THE ELECTRIC UTILITY AND THE ELECTRIC UTILITY IS ALL GOING TO BE SOLAR PHOTOVOLTAIC AND SOLAR THERMAL WHERE IT CAN CONVERT SEA WATER INTO FRESH WATER. AND THEN WE HAVE DRIP IRRIGATION WHERE WE ARE GOING TO HAVE ORGANIC FARMS ALL OVER THE ISLAND. HOPEFULLY WE ARE GOING TO EXPORT PRODUCE – REALLY THE BEST, ORGANIC PRODUCE TO JAPAN AND ELSEWHERE. AND THE HAWAIIAN ISLANDS, WE ARE GOING TO SUPPORT THE LOCAL PEOPLE AND HELP THEM START THESE BUSINESSES. WE WILL HAVE ELECTRIC CARS. SO IT IS GOING TO BE A LITTLE, IF YOU WILL, LABORATORY FOR SUSTAINABILITY IN BUSINESSES OF SMALL SCALE.

BARTIROMO: AMAZING. NOW, ALL OF THIS HAS PEOPLE WONDERING, ARE YOU SPREADING YOURSELF TOO THIN? SO RECENTLY, YOU PLEDGED WHAT? 4.2 BILLION DOLLARS OF YOUR STOCK TO TAKE OUT A LOAN. WHY DID YOU DO THAT?

ELLISON: WELL ACTUALLY, YOU KNOW, MY ACCOUNTANTS – I DON’T OWE 4.2 BILLION DOLLARS OR EVEN A BILLION DOLLARS. IT TURNS OUT THAT I DO HAVE A CREDIT LINE WHERE LETS SAY IF I WANTED TO BUY SOMETHING LIKE THE LOS ANGELES LAKERS, I COULD GO BUY THE LOS ANGELES LAKERS. THEY ARE NOT FOR SALE, BUT –

BARTIROMO: BUT YOU’D LIKE TO BUY THEM?

ELLISON: OH, SURE. I WOULD LOVE TO BUY THE LAKERS. THE LAKERS? OF COURSE. IT IS A VERY EXPENSIVE WAY TO GET FLOOR SEATS. THERE IS A CHEAPER WAY TO GET FLOOR SEATS. BUT, THE LAKERS ARE MY FAVORITE TEAM. THOUGH I ALSO FOLLOW THE WARRIORS AND THE CHICAGO BULLS.

BARTIROMO: SO YOU TAKE THIS LINE OF CREDIT –

ELLISON: SO I’VE GOT A LINE OF CREDIT JUST IN CASE I GO SHOPPING AND THERE IS SOMETHING THAT CATCHES MY EYE.

BARTIROMO: I SEE.

ELLISON: BUT, IT IS JUST A LINE OF CREDIT.

BARTIROMO: SO WHAT HAPPENS NOW? I MEAN, YOU KNOW, YOU’VE BUILT THIS UNBELIEVABLE COMPANY. HUNDRED BILLION PLUS. YOU’VE GOT, YOU KNOW, AN ENORMOUS AMOUNT OF PERSONAL WEALTH. DO YOU PINCH YOURSELF? I MEAN, WHEN YOU LOOK BACK AT YOUR MODEST BEGINNINGS, IT IS PRETTY EXTRAORDINARY.

ELLISON: IT IS EXTRAORDINARY. YOU KNOW STEVE AND I USED TO TALK ABOUT THIS A LOT AND I THINK BOTH OF US AGREED THAT EVERY ONCE IN A WHILE YOU STOP AND THINK ABOUT IT, BUT 99.99 PERCENT OF THE TIME YOU JUST KIND OF GET ON WITH THE MIRACLE OF LIFE. YOU KNOW, JUST BEING ALIVE EVERY DAY AND GOING OUT AND DOING YOUR JOB AND ENJOYING BEING ALIVE. I REALLY DON’T’ SPEND A LOT OF TIME THINKING ABOUT WOW, LOOK HOW FAR I’VE COME FROM THE LOWER EAST SIDE OF MANHATTAN – NOT THE BRONX BY THE WAY.

BARTIROMO: I KNOW, WE APOLOGIZE. IN YOUR WIKIPEDIA IT SAYS THE BRONX, BUT IT IS ACTUALLY THE LOWER EAST SIDE OF MANHATTAN.

ELLISON: WELL THE INTERNET ISN’T ALWAYS 100 PERCENT ACCURATE, BUT I THINK MAYBE SOMEONE WAS BOASTING ABOUT MY FAMILY’S GREAT WEALTH CLAIMING WE CAME FROM THE BRONX WHEN REALLY IT WAS THE LOWER EAST SIDE OF MANHATTAN. THE ONLY WORSE NEIGHBORHOOD IN NEW YORK THAN THE BRONX.

BARTIROMO: SO YOU ARE LIVING THIS ENORMOUSLY INTERESTING LIFE. YOU WANT TO COMPETE AT AMERICA’S CUP, YOU’RE DOING RACING. TELL ME WHERE YOUR HEART IS. I KNOW IT IS AT ORACLE AND BUSINESS, BUT WHAT’S NEXT FOR Larry EllisON?

ELLISON: WELL AGAIN, I THINK ORACLE. I GUESS MY TOP PRIORITY IS MY FAMILY AND MY SECOND PRIORITY WOULD BE, YOU KNOW, MY JOB. AND MY JOB REALLY IS AT ORACLE. ALL OF THE OTHER STUFF – WHETHER IT’S A MUSEUM, OR ARCHITECTURE OR FLYING AIRPLANES OR RACING SAILBOATS, IS KIND OF AN INTENSE HOBBY. SOMEONE DESCRIBED MY HOBBIES AS MY PURSUIT OF ALTERNATIVE STRESS. AND SO I LOVE TO COMPETE IN BUSINESS AND ALL OF MY HOBBIES I’M FAIRLY COMPETITIVE AS WELL.

BARTIROMO: AND WHAT A COMPETITOR YOU ARE. LARRY GOOD TO HAVE YOU ON THE PROGRAM. THANKS FOR SPENDING THE TIME WITH US TODAY. WE APPRECIATE IT.

ELLISON: THANK YOU, MARIA. THANK YOU VERY MUCH.

BARTIROMO: Larry EllisON IS THE CEO OF ORACLE. THAT’S CLOSING BELL AND I WILL SEE YOU BACK IN NEW YORK TOMORROW. HAVE A GOOD NIGHT.

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