Oracle's Ellison Skewers Latest Tech Trends

SAN FRANCISCO - Oracle(ORCL) CEO Larry Ellison doesn't think the future is bright for VMware(VMW), the Android phone and cloud computing.

Before a roomful of financial analysts here, the colorful chief executive on Thursday skewered the tech industry's love of hype. "The worst thing they can say about you in Silicon Valley is 'you just don't get it,' " Ellison said when asked about the industry's latest buzz-words -- cloud computing.

Ellison said Oracle will not invest in cloud computing centers, which he characterized as the latest fashion trend that, like on-demand software, lacks a profitable economic model. "Who's making money at cloud computing?"

As for on-demand software competitor Salesforce.com(CRM) it "barely makes money at all," he said.

Although Oracle's own on-demand service recently turned profitable, the company intends to stick primarily with its model of selling licensed business software.

An increasing number of tech giants such as IBM(IBM) have opened cloud computing centers. In IBM's case, the centers will be monetized through the company's consulting and outsourcing services business, providing computing centers for Big Blue's clients.

Asked about the future of virtualization leader VMware, Ellison said the company "is less protected than Netscape." "Although they are a pretty big company, they should be smaller," in terms of market cap, he added.

VMware's market advantage has been undermined by Microsoft(MSFT) products that also virtualize Windows environments, Ellison says. "Netscape had a better chance of competing [against Microsoft] with a browser than VMware does" with its virtualization software, which is a feature of the operating system, he said.