Companies More Prone to Go “Vertical”

Larry Ellison is known for forward thinking. With his new business model, though, the billionaire chief executive of software maker Oracle Corp. (ORCL) is taking a page from the past.

Mr. Ellison plans to buy Sun Microsystems Inc. (JAVA) and transform Oracle into a maker of software, computers, and computer components–a company more like the U.S. conglomerates of the 1960s than the fragmented technology industry of recent years.

“It is back to the future,” he told financial analysts in October.

Mr. Ellison is among the executives reviving “vertical integration,” a 100-year-old strategy in which a company controls materials, manufacturing and distribution.

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