Tech boss warns of small firm collapse

Larry Ellison backed Jim Barksdale against Microsoft

Larry Ellison, the boss of software giant Oracle, has told the BBC that he expects thousands of tech companies to go bust in the fall-out from the dot.com boom.

But he said his company would survive - and the market was under-rating tech stocks now, just as it over-rated them earlier.

Mr Ellison told BBC News24's Business Today programme that "things are not getting worse, but I don't think they are getting better."

"What is going to happen is that more and more of the smaller companies will not survive and a concentration of spending will occur in the larger companies.

"Even if high-tech spending by companies never recovers to its former levels, large firms will see a recovery because the small firms they compete with will no longer be in business."

Shares in Oracle have plunged by more than 75% since their peak, but Mr Ellison said he was not worried - Oracle was a cash-rich and highly profitable company.

Mr Ellison said he doubted that tech spending would ever capture such a high proportion of total capital investment as it did for a few years in the l990s.

And he said that the terrorist events of September 11 could provide a boost for software companies like his own that collate databases.

"It is interesting to note that more than half of the terrorists were wanted by one or more Federal agencies," he said.

"We have so many separate data bases that terrorists are fairly safe. ..the solution is to take all the data and store it in a single national security database."

Mr Ellison said that this approach already existed in the commercial sector in the US.

"You are already in the database if you have a credit car. We know how much you earn, whether you made a late payment, your total loans outstanding.

"You bartered away your privacy not to improve your health care or protect your country.

"You did it to make shopping easier."