Oracle chief executive Larry Ellison has committed himself to cutting company costs by $2bn this year.

Speaking at the Oracle Appsworld conference in Paris this week, he claimed that Oracle has already saved $1bn by adopting its own ebusiness software applications.

Buoyed by this achievement, Ellison went on to extend his expectations. "Our profit margins have increased by 20 to 30 per cent in one year. This year we will make $2bn in savings. I believe that in year three we will make $3bn in savings," he said.

The flamboyant Oracle chief told an audience of customers, partners, analysts and press that people who say you need to increase IT budgets to take advantage of the internet are wrong. "People say that if you go to the internet you have to spend more on IT. I don't think so. We have cut our IT budget in half," he said.

Ellison claimed that the additional savings would come from using Oracle's own customer relationship management software on a global basis. "It's about improving marketing and sales efficiencies; global marketing and global sales automation," he explained.

The speech also unveiled the marketing spin that users will be hearing from Oracle over the coming year. Ellison made his play for the high ground among ebusiness vendors by declaring that "our primary competitor is IBM".

"The relationship between application providers and customers is going to fundamentally change. The old way of consultants talking to your IT people is going to change," he added.