But in its proxy statement, Oracle says the options align Mr. Ellison's pay with company performance because they will have value only if Oracle's stock rises.

WSJ: 'Pay for Performance' No Longer a Punchline

However, strong performance from competitors like Oracle and VMware could force IBM to cut down on margins to as low as 2005 levels.

FORBES: How IBM Becomes A $222 Stock

As databases in general become more strategically vital, and as cloud technology becomes essential within advanced IT architectures, Oracle is betting that the combination of speed and cost-performance offered by its increasingly popular Exadata engineered systems will allow the company to stay well ahead of other alternatives.

FORBES: Larry Ellison: As We Thump IBM, Our Next Target Is Teradata

Shalom says his firm's decision to target specific hardware, in pursuit of higher performance and greater scalability, is in some ways similar to Oracle's recent moves to leverage the proprietary server hardware it got with its acquisition of Sun Microsystems.

FORBES