Oracle Has Customers Over a Barrel

Over the past four years, Oracle (ORCL) Chief Executive Lawrence J. Ellison has been on an acquisition binge that has brought all sorts of benefits to the company. After spending $30 billion to buy 56 companies, he has doubled the software giant's revenues to an estimated $24 billion this fiscal year and sent Oracle's stock surging. Ellison's latest deal is one of his most ambitious to date. His $7.4 billion offer for Sun Microsystems (JAVA), which still needs approval from European regulators, would move Oracle into the hardware business for the first time and greatly expand Ellison's empire.

But the company's growing power, coupled with a surge in consolidation by other major players in the technology industry, has frustrated some corporate customers. They're concerned that Oracle's strategy is helping to stifle innovation and lock them into high prices. "Once you've made a deal with the devil, it's hard to get away," says James Sims, chief information officer of California grocer Save Mart Supermarkets, who says he's stuck with some Oracle products because it's too expensive to switch to alternatives. "They're extorting us. I'm very unhappy with them." Oracle declined to comment for this article.