Oracle is on a mission to become the world’s biggest software group, Larry Ellison, its billionaire founder keeps insisting. The man charged with keeping the famously combative Mr Ellison happy is Charles Phillips, a former US Marine-turned-star Wall Street analyst, who is leading Oracle’s multibillion-dollar acquisition spree as the company’s president.

The task, a wry-smiling Mr Phillips suggested in an interview with The Times, has just been made a tad easier by the turmoil in the debt markets. A global credit crunch will help Oracle, he said, as the company’s private equity deal rivals – seen only weeks ago as the new masters of the M&A universe – struggle to raise cheap capital in a newly hostile environment.

Mr Phillips, widely tipped as a successor to Mr Ellison, said: “We expect some competition for deals to go away. We’ve always had an advantage [over private equity firms] in being able to realise synergies, but private equity isn’t going to be in the same position to drive up prices.”

In the past two years, on Mr Phillips’s watch, Oracle has spent more than $20 billion (£9.8 billion), buying more than 30 firms as it branches out beyond its core database business. The strategy has been calculated to ramp up pressure on SAP, its German-based rival, which itself was recently labelled a possible takeover target by analysts.

Mr Phillips, who was poached from Morgan Stanley by Mr Ellison three years ago, said that higher borrowing costs will not change Oracle’s strategy: “Our credit quality remains the same as it ever was.”

His comments came after a rout in leveraged M&A deals. On Tuesday the mooted $23 billion sale of Virgin Media was derailed when the pay-TV group said that it was postponing an auction until a “more stable debt market environment” emerges. Cadbury Schweppes and Mitchells & Butlers have also had plans upset by a credit squeeze sparked by defaults in the US sub-prime mortgage market.

Private equity has been particuarly active in the financial technology sector, estimated to be worth $30 billion a year. Mr Phillips, who was in London yesterday to sell software to financial services clients, identified the area as crucial to Oracle’s plans.

A consortium of buyout firms led by Kohlberg Kravis Roberts helped to spark a grab of assets in the sector in 2005 through the $11.3 billion leveraged buyout of Sungard Data Systems. Deals this year have included Thomas H. Lee Partners and Fidelity National’s acquisition of Ceridian for $5.3 billion and Blackstone’s move to buy Alliance Data Systems for $7.8 billion.

Against that background, Mr Phillips noted that Oracle had built a reputation as the first port of call for investors looking to exit investments. “The private equity guys call us, the start-ups call us, we see it all,” he said.

Oracle has other reasons to be interested in the M&A scene: a company source said that the group had been charged with providing a technological “platform for conquest” for Fortis, the Belgian bank that is bidding for parts of ABN Amro’s retail business in alliance with Royal Bank of Scotland and Santander. It was also recently suggested that Oracle was eyeing Intec, a £100 million AIM-listed provider of billing software to telecoms companies. The private equity groups General Atlantic and HgCapital were also said to be assessing Intec, but may now rethink plans.

Mr Phillips’s lips were closed on the question of possible future targets, but Oracle’s buying continues apace. Last month, the group continued with expansion to make it a “one-stop shop” for business software when it swooped on Bharosa, a provider of software to fight online identity theft and fraud. The acquisition came after comments by Mr Ellison, in which he suggested that future Oracle databases would be entrusted with digital data ranging from consumers’ bank details to their medical records and even their genetic data.

In May, Oracle made a $450 million acquisition of Agile, which sells to companies as diverse as McDonald’s and Lockheed Martin tools to track their products’ performance. Speaking soon after the deal, Mr Ellison said: “It’s easier to write cheques than software.”

In March, Oracle agreed to buy Hyperion Solutions, a specialist in software to analyse data, for $3.3 billion. The deal was far smoother than some others, such as the $10.3 billion purchase of PeopleSoft in 2004, clinched after a fraught 18-month hostile bid.

Investors appear to be warming to Oracle’s strategy. In June, after strong fourth-quarter results, its shares rose to $20 for the first time in five years. Mr Phillips said that the group remained comfortable with forecasts of an average annual 20 per cent growth in profit over the next two years.

However, there are signs of disquiet among Oracle’s customers. According to a survey of chief information officers (CIOs) by InformationWeek, the trade magazine, this month, only 16 per cent of 375 technology executives, the majority of them Oracle clients, said that the group’s acquisition strategy “is good for the software industry”.

Mr Phillips dismissed the fears. “That’s not what we’ve heard from our CIO forums,” he said. “It’s not as if there is only one behemoth in the market. There is Oracle, SAP and a host of smaller local players.”

But what of the prospect of competing with Mr Ellison, a man whom Mr Phillips identifies as his business hero? Concern has been raised that Mr Ellison’s involvement in Netsuite, a business software start-up majority-owned by him, could lead to a conflict of interest. “Netsuite is for smaller customers,” Mr Phillips said. “Different companies have different needs and budgets.”

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