Not only is he being called a visionary and one of Technology’s foremost luminaries, but a CEO who has planned well for his succession.
All of this is true, of course, but so is something else.
The only thing that actually has changed at Oracle is a few job titles.
First there’s the fact that as Ellison stepped down from his CEO role, he stepped up into the position of Executive Chairman of the Board, pushing Jeff Henley ,who had been Oracle’s Chairman of the Board for a decade, out of his seat. As far as we can tell, this happened for no good reason other than Larry wanting to sit at the head of the table, handle the gavel, and oh right, be in charge. (Henley will now become vice chairman.)
And though Oracle’s two new CEOs, Mark Hurd and Safra Catz, will report to the board, rather than to Ellison directly as they did when they were the database giant’s presidents, it’s Ellison who leads the board.
Not just that, but Ellison also owns more than one quarter of Oracle’s shares which are worth $40 billion, so he pretty much controls the company anyways.
No Sidelines for Larry
Next, there’s how Ellison, who couldn’t let the two new CEOs handle yesterday’s earnings call on their own, answered a question from Nomura Securities analyst, Richard Sherlund.
Sherlund asked Ellison to clarify what the change in his position actually meant.
Here’s Ellison’s answer (emphasis mine):
Well, again Mark and Safra have done a spectacular job and I think they deserve the recognition of their new title. I'm going to continue to work with Thomas Kurian in software engineering and John Fowler in hardware engineering and Ed Screven and Mark and Safra as I have exactly in the past. So I'm going to continue doing what I have been doing over the last several years, they're going to continue what they've been doing over the last several years.”
Business as Usual at Oracle
Later in the call when Karl Keirstead, an analyst from Deutsche Bank, asked Hurd how the changes in leadership would trickle down Oracle’s organization, Catz entered into the discussion with this comment (emphasis mine):
“Karl, I just want to make sure we are very, very clear. There will actually be no changes, no significant changes right, just want to clarify, no changes whatsoever.”
Got it -- no changes at Oracle except a few titles.
Can't Keep Building on Solutions for Another Era
And that’s a shame because despite Ellison’s convincing spiel (he talked more than anyone else on the earnings call), he’s building solutions that would have been more appealing in another era. Young upstarts like DataStax, Pivotal and MongoDB are displacing Oracle as fast as they can, luring enterprises to the third platform which is being built for an era where big data, social, mobile, cloud and IoT are the drivers.
While availability on the cloud makes everything less expensive, “built for the cloud” has the potential to change the way companies do business, what they can discover and how quickly they can create new solutions. Business opportunities expand and … oh yes, third platform solutions tend to be far less expensive from the start.
Many of today’s brightest developers are drawn to Open Source technologies and Oracle is not one of them.
It’s worth noting too, that Open Source technologies, especially those that are Apache projects, typically evolve more quickly and are tested more thoroughly than those that are built inside corporate walls. This is because they’re built by passionate communities of individual software engineers (and often academics) instead of a team of people employed by a single company. New releases and updates, it should be noted, are released when they’re ready rather than by any single entity’s business drivers.
And sure, Oracle does support a few Open Source projects, but its database and business solutions are all proprietary.
It’s Harder to Win, If You Don’t Actually Share
The bottom line is that Ellison doesn’t want to share, he comes from a generation where “eat my dust” is the rule. Consider this from yesterday’s call. Ellison said:
We have a lot of assets. One of the things we lead with ERP is budgeting and planning EPM in the cloud. Workday's answer to that is we don't have one of those. None of our competitors have one of those in the cloud. SAP, as far as I know, isn’t moving anything to the Cloud other than Ariba and SuccessFactors, by the way which I am [not] going to point out run on Oracle, both of them run on Oracle, not HANA, run on Oracle."
Distracted By Too Many Toys?
But an even bigger problem is that Ellison’s actions suggest that he’s not all that into Oracle anymore. Consider that last year he blew off his keynote at Oracle Open World to ride in a chase boat at the America’s Cup. Mind you it was his yacht that was racing. But 60,000 people had paid $5000 to $6000 each to come to the conference and hear Ellison speak and he didn't bother to tell anyone that he wouldn’t be showing up to address them. They sat for nearly an hour waiting ….
No technology company can afford this kind of behavior. Especially at this point and time, when so much is changing, when there’s so much disruption, and the stakes are so high. The people who will succeed in building the technologies that will define the third platform, and survive over the long term, will be those who are laser-focused, rather than distracted by doing things like buying islands in Hawaii, lavish estates all over the world, and exotic cars.
Ellison, with his $50 billion, can afford to gamble, but Oracle cannot.
It’s time for Ellison to actually step aside. Switching hats won’t help.
Note: Quotes from the earnings call transcript were taken from SeekingAlpha.com