Apple wasn’t the only big computer company making announcements yesterday. Oracle was too – telling the world what it intended to do with that-little-hardware-company-down-the-road that it recently snapped up in a fire sale.

It was actually a surprising announcement. At least, I found it surprising. Oracle intends to invest big money in integrating Oracle’s technology with Sun’s technology.

What does Oracle mean by big money?

Oracle is talking about big investment. At yesterday’s presentation, Charles Phillips, Oracle’s President, spoke of increasing Oracle’s R&D budget to $4.5bn, which would amount to nearly 20 per cent of annual revenues and would put it in the same area of R&D investment as IBM and Microsoft. According to Philips, the primary targets for the investment will be Sun technologies, including SPARC, Solaris and Java.

This appears a little more dramatic than it actually is, since if you add Oracle’s R&D spend for last year to Sun’s R&D spend, it comes out at about $4.5bn. Nevertheless, Oracle is right that in revenue-percentage terms, 20% of revenues for R&D is very high for a large IT company – larger than IBM or Microsoft, by quite a way.

It’s also the case that Oracle could have viewed the Sun acquisition as an opportunity to strip out some costs, where there is software overlap, and dispose of other pieces of Sun to other vendors.

Oracle is clearly not doing this. Neither is it going to leave Sun to pursue the business model that had so clearly failed to bring home the bacon.

In the words of Oracle CEO, Larry Ellison, “Our vision for 2010 is the same as IBM’s in the 1960s.” He was referring to the fact that IBM integrated hardware with software in a coherent well-engineered stack and sold the combination as the mainframe. ”We like that strategy a lot and we’re going to adopt it,” Ellison added.

Oracle is slightly different than the 1960s IBM Ellison was referring to, in that it has a broad portfolio of widely used business applications. The truth is that it could offer a more comprehensive stack of technology than the 1960s IBM.

Jobs Envy

However, I don’t believe a word of it. And by that I mean I don’t believe that Ellison’s vision has anything to do with nostalgia for the mainframe days. I think this is a manifestation of Jobs (as in Steve Jobs) envy.

A friend of mine who’s an astute observer of technology and who used to work for Oracle, told me recently that Jobs envy is very likely to be a factor. Ellison is known to be a friend of Jobs and an admirer of Apple’s dramatic impact on the consumer computing market. Apple was a basket case in the later 1990s when Steve Jobs returned. Jobs gathered up his troops and marched through the PC industry just like General W T Sherman marched from Atlanta to the sea.

In retrospect, the march of Apple seems to have been unstoppable. In fact it possibly was stoppable, but nevertheless the strategy and its execution, was brilliant. Jobs gradually built an end-to-end business model that had Apple delivering the whole computing experience from the iron to the applications, including the content and the packaging. And this continues. With the advent of the iPad, Apple now has its own mobile computing chip. It can determine the destiny of every important component of its products and hence it has full control of the user experience. There is no other vendor in the technology market that has such end-to-end control.

This, I suspect, is what Larry Ellison hopes to achieve with Oracle. He wants an end-to-end business model just like Apple has. Of course, as Ellison said, it won’t mean that Oracle stops selling components. Some of its components are, after all, best of breed. The point is that Oracle is now in a position to provide a complete stack, and to optimize its stack and, possibly, deliver exceptional value. The born-again Oracle will deliver integrated systems.

Targeting IBM

It is interesting that Ellison is targeting IBM directly, at least with his rhetoric. This must be partly because IBM has been syphoning off some of Sun’s choice clients while Oracle waited for the EU to finish its unjustified hissy fit about MySQL and stop blocking Oracle’s acquisition. However, I think it is also because Ellison believes that IBM is going to be his major competitor.

And if so, I think he’s right.