Oracle has announced its intention to acquire Pillar Data Systems, a storage technology company that is mostly owned by Oracle CEO Larry Ellison.

Pillar’s technology repurposes commodity disk drives for enterprise storage by storing frequently accessed data at the outer perimeter of the disk, which performs better than the centre.

The acquisition adds to the storage portfolio that Oracle acquired along with Sun Microsystems last year.

“The acquisition of Pillar Data Systems provides Oracle with a compelling SAN storage architecture that complements our core strengths,” said John Fowler, Oracle’s EVP for systems. “Customers can optimize the value of their Oracle applications, database, middleware and operating system software by running on Oracle’s storage solutions.”

The acquisition will take place on the basis of "100% earn out", meaning that Ellison and his fellow Pillar shareholders will be compensated according to Pillar’s ability to meet performance targets.

An SEC filing by Oracle reveals that the condition of payment for Ellison is that Pillar brings in more revenue in the third year after the deal than it loses over the next three years put together.

Oracle says that the transaction, which will nevertheless transfer company funds to Ellison’s personal coffers, was evaluated and negotiated by an independent committee of Oracle board members.