Larry Ellison has agreed to step down as the chief executive officer at Oracle, ending one of the most entertaining and profitable runs for a leader in business history.
Oracle announced Ellison’s departure via a press release delivered on Thursday afternoon after the close of the U.S. financial markets. The company said that Ellison will remain Chairman of Oracle’s board and take on the role of chief technology officer. 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 co-founded Oracle in 1977 and has run the company ever since. He guided Oracle through many ups and downs and ended up with the world’s largest database software company and one of the largest makers of business software. Oracle’s products have become the backbone of modern commerce and industry. Ellison was one of the last remaining founder CEOs of the technology industry’s old school powerhouses like Microsoft, Apple, and Intel and his departure certainly caps off an era. Ellison turned 70 last month.
Few leaders in the technology industry have managed to capture as many headlines as Ellison. According to the Bloomberg Billionaires Index, he’s worth about $46 billion, making him the seventh richest man in the world. Ellison has never been shy his wealth. He’s built a sprawling Japanese-Inspired home in Silicon Valley, scooped up large swaths of land in Malibu, and owned myriad fast cars and planes. Ellison made a particularly showy splash when he bought the Hawaiian island of Lanai last year. He’s also well known for yachting exploits and recently sponsored the team that won the America’s Cup.
Ellison’s varied interests outside of the technology industry have grown in their ambition and demanded more of his attention. He bought the Indian Wells tennis tournament, since renamed as the BNP Paribas Open, a few years ago and has turned it into what many in the tennis world consider a fifth grand slam. Since acquiring Lanai, Ellison has been working to revitalize the island’s economy, and Ellison has been investing in the booming movie production businesses of his children.
Ellison’s business battles have garnered just as much publicity as his flamboyant lifestyle. Instead of backing down in the face of antitrust lawsuits and competitive battles, Ellison has tended to play the role of the aggressor and usually emerged victorious. One of Ellison’s favorite targets has been Microsoft, which competes against Oracle in the market for business software.
The day-to-day operations of Oracle have been in the hands of Hurd and Catz for a number of years. Hurd came to Oracle in 2010 after being ousted as the CEO of Hewlett-Packard. Ellison famously rushed to Hurd’s defense in his battle with the HP board over how his departure was handled. In dismissing Hurd, Ellison said at the time, HP had made as big a mistake as Apple did when it fired Steve Jobs. Catz has been at Oracle since 1999 and has been Ellison’s longtime trusted second in command. Despite handing over some duties, Ellison has continued to oversee Oracle’s technology strategy. Company insiders have been impressed with how much he’s stayed on top of technology developments.
Before Hurd’s arrival, Catz had been thought of as the natural successor to Ellison. She has moved around different parts of the company and stuck around while other top executives have either left or seen their reputations fade. Catz has tended to shy away from the limelight and rarely does interviews. Hurd has no media hangups. Hurd has focused on Oracle’s sales, marketing, and support, while Catz has handled the bulk of the financial and legal operations. Neither executive is short on ego. Whether they can play nice, as Ellison takes on more of a background role, remains to be seen.
Oracle has been knocked repeatedly over the years for the aggressive tactics of its salesforce and its high prices. The dominance of the company’s database, which competes with similar products from IBM and Microsoft, has given it a lot of leverage in the market. Critics have dinged Oracle for relying too much on this past success and being late to major recent shifts in the technology industry such as the rise of cloud computing.
One of the major strategies that Oracle mastered during Ellison’s tenure was the art of binge acquisitions. Oracle has bought dozens upon dozens of companies over the years. Quite often, these deals would be small and aimed at specific markets like insurance or retail where Oracle wanted to buy a prominent name. In other cases, Oracle has made huge deals to wipe out competitors such as its 2004 purchase of PeopleSoft for $10.3 billion. The multi-month battle to secure that deal included a series of Machiavellian moves from Ellison, including lowballing PeopleSoft’s shareholders, threats to let go thousands of its employees and even lighthearted threats of violence against the PeopleSoft CEO and his dog. The acquisitions have helped Oracle keep a constant revenue stream for licenses of traditional business software.
Ellison leaves Oracle at a time when the company is in good financial health and benefitting from a resurgent technology boom. There are huge questions about the company’s future, though. Oracle has been late delivering a slew of its most ambitious recent products. Its database software is being used less and less by new technology companies that have moved toward more flexible types of applications. And its model of having a huge sales force looks antiquated at a time when people are buying infrastructure software via the Web with their credit cards.
All that said, Ellison did as masterly a job negotiating the twists and turns of technology as anyone else.
