Oracle CEO Larry Ellison told Reuters in an e-mail interview that then got put in a filing and shipped to the SEC that, despite all the armchair speculation, he's keeping Sun's hardware business. Not only that but he's going to pour money into Sun's Sparc chip.

He's going to keep Sun's flagging hardware because it will make Oracle like the iPhone.

Larry explains: "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."

Larry continues: "Once we own Sun we're going to increase the investment in Sparc. We think designing our own chips is very, very important. Even Apple is designing its own chips these days. Right now, Sparc chips do some things better than Intel chips and vice-versa. For example, Sparc is much more energy efficient than Intel while delivering the same performance on a per-socket basis. This is not just a green issue, it's an economic issue. Today, database centers are paying as much for electricity to run their computers as they pay to buy their computers. Sparc machines are much less expensive to run than Intel machines.

"Our primary reason for designing our own chips is to build computers with the very best performance, reliability and security available in the market. Some system features work much better if they are implemented in silicon rather than software. Once we own Sun, we'll be able to plan and synchronize new features from silicon to software, just like IBM and the other big system suppliers. We want to work with Fujitsu to design advanced features into the Sparc microprocessor aimed at improving Oracle database performance. In my opinion, this will enable Sparc Solaris open-system mainframes and servers to challenge IBM's dominance in the data center. Sun was very successful for a very long time selling computer systems based on the Sparc chip and the Solaris operating system. Now, with the added power of integrated Oracle software, we think they can be again.

He also said that he's keeping Sun's disk storage and tape backup businesses because "We believe the best user experience is when all the pieces in the system are engineered to work together." And he wants to hang onto Sun's hardware engineers.

The high-end Exadata machine built by HP on Intel processors and integrated with Oracle's database, Oracle's first adventure in hardware, will stay on Intel. Larry said there are "no plans for a Sparc Solaris version of Exadata....It is the most successful product introduction in Oracle's 30-year history."