Ellison's Departure Signifies Changing of the Guard

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In the 1970's when Larry Ellison worked at Amdahl, an IT company that specialized in IBM mainframe, he came across a paper that would serve as the catalyst that would alter the course of his entire life."A Relational Model of Data for Large Shared Data Banks," by Edgar F. Codd described the concept of Structured Query Language (SQL) he had developed at IBM. Codd's employers saw no commercial potential in the SQL concept, but Ellison did.
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In the 1970's when Larry Ellison worked at Amdahl, an IT company that specialized in IBM mainframe, he came across a paper that would serve as the catalyst that would alter the course of his entire life."A Relational Model of Data for Large Shared Data Banks," by Edgar F. Codd described the concept of Structured Query Language (SQL) he had developed at IBM. Codd's employers saw no commercial potential in the SQL concept, but Ellison did.

In 1977 Ellison would go on to start Oracle, the industry leader in database management software and it would also make Ellison one of the richest men in the world.

Last Thursday, Ellison stepped down from his post as CEO of the company, a position only he has held there. Mark Hurd and Safra Catz, both presidents at Oracle, will each inherit the CEO title. Catz will remain as chief financial officer as well.

Ellison's departure marks a changing of the guard, an "end of an era," according to BusinessWeek. In recent years Oracle has been slow to adopt cloud computing, with Ellison leading the resistance. Here, he can be heard during a Q&A discussion at a conference in 2008, asking "what the hell is cloud computing?"And asking, "when is this idiocy going to stop?" He went on to say the only thing Oracle can do differently is possibly change the wording in its ads.

Eventually when the company launched its own cloud solutions a couple years ago, experts thought they seemed to defy the key conventions of cloud computing, which are all about improving use and cutting costs by giving buyers as-needed access to a portion of a much larger pool of shared resources. Oracle Private Cloud, for instance, placed its own infrastructure behind the client's firewall.

Today Oracle is on track to position itself as a leader in the cloud, hiring hundreds of engineers, recruiting new executives with this vision, and opening a cloud computing technology center in Seattle--all under the direction of Prashant Ketkar, the head of products for Oracle's public cloud business.

But are these efforts too little, too late? Oracle's lackluster first-quarter earnings, dismal cloud revenue, and revenue decline in its hardware business show that the company's journey will be long and difficult. Historically, has always managed to reinvent itself and overcome business and market challenges. With a clear focus on what it will take to compete and an acknowledgement of its rich history, Oracle will ultimately perservere.

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EXPERT OPINION