Trends and Profile NEWS
Lawrence J. Ellison
By Amarendra Bhushan for CEOWORLD Magazine Updated:September 25, 2008
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Chief Executive Officer
Oracle Corporation
Lawrence J. Ellison has been Oracle’s Chief Executive Officer and a member of the Board of Directors since he co-founded the company in June 1977. Mr. Ellison served as Chairman of the Board from May 1990 until October 1992 and from May 1995 until January 2004. He served as President from May 1978 to July 1996. Mr. Ellison has been a member of the Executive Committee since December 1985.
Lawrence J. Ellison (Larry) is a Co-founder of Netsuite, Inc.(Formerly Netledger Inc.). Mr. Ellison has been Chief Executive Officer of Oracle Corp. since he co-founded it in June 1977. Mr. Ellison served as Oracle Corp.’s President from May 1977 to June 1996. He served as the Chairman of the Board of Oracle Corp. since June 1995 and also served as Chairman of the Board from April 1990 until September 1992. He serves as Director of Apple Computer, Inc. He has been a … Director of Oracle Corp. since June 1977 and as its member of Executive Committee since December 1985.
Lawrence J. Ellison was born in the Bronx, New York. At nine months, he contracted pneumonia, and his unmarried 19-year-old mother gave him to her aunt and uncle in Chicago to raise. Lawrence was raised in a two-bedroom apartment on the city’s South Side. Until he was twelve years old he did not know that he was adopted. His adoptive father had lost his real estate business in the Great Depression and made a modest living as an auditor for the public housing authority. As a boy, Larry Ellison showed an independent, rebellious streak and often clashed with his adoptive father. From an early age, he showed a strong aptitude for math and science, and was named science student of the year at the University of Illinois.
Lawrence J. Ellison, 63, has been Chief Executive Officer and a Director since he founded Oracle in June 1977. He served as Chairman of the Board from May 1995 to January 2004 and was a member of the Executive Committee from December 1985 to July 2008, when the Committee was eliminated.
Ellison also demanded at least 100 percent growth in sales of his company’s software, a near impossible feat for a company that already boasts $100 to $500 million in sales. It would have been impossible for Oracle and Ellison, if it wasn’t for some dodgy sales practices. This may be considered one of Ellison’s mistakes as it negatively affected Oracle’s business reputation. Although Ellison’s high demands led to a highly stressful work environment, it also led to high productivity and Oracle’s present success.
Ellison was inspired by the paper written by Edgar F. Codd on relational database systems named “A Relational Model of Data for Large Shared Data Banks.” He founded Oracle in 1977, putting up a mere $2000 of his own money, under the name Software Development Laboratories (SDL). In 1979, the company was renamed Relational Software Inc., later renamed Oracle after the flagship product Oracle database. He had heard about the IBM System R database, also based on Codd’s theories, and wanted Oracle to be compatible with it, but IBM made this impossible by refusing to share System R’s code. The initial release of Oracle was Oracle 2; there was no Oracle 1. The release number was intended to imply that all of the bugs had been worked out of an earlier version.
In 1990, Oracle laid off 10% (about 400 people) of its work force because of a mismatch between cash and revenues. This crisis, which almost resulted in Oracle’s bankruptcy, came about because of Oracle’s “up-front” marketing strategy, in which sales people urged potential customers to buy the largest possible amount of software all at once. The sales people then booked the value of future license sales in the current quarter, thereby increasing their bonuses. This became a problem when the future sales subsequently failed to materialize. Oracle eventually had to restate its earnings twice, and also to settle out of court class action lawsuits arising from its having overstated its earnings. Ellison would later say that Oracle had made “an incredible business mistake.”
Although IBM dominated the mainframe relational database market with its DB2 and SQL/DS database products, it delayed entering the market for a relational database on UNIX and Windows operating systems. This left the door open for Sybase, Oracle, and Informix (and eventually Microsoft) to dominate mid-range and microcomputers.
Around this time, Oracle fell behind Sybase. In 1990-1993, Sybase was the fastest growing database company and the database industry’s darling vendor, but soon fell victim to its merger mania. Sybase’s 1993 merger with Powersoft resulted in a loss of focus on its core database technology. In 1993, Sybase sold the rights to its database software running under the Windows operating system to Microsoft Corporation, which now markets it under the name “SQL Server.”
In 1994, Informix Software overtook Sybase and became Oracle’s most important rival. The intense war between Informix CEO Phil White and Ellison was front page Silicon Valley news for three years. Ultimately, Oracle defeated Informix in 1997. In the same year, Ellison was made a director of Apple Computer after Steve Jobs came back to the company. Ellison resigned in 2002, saying that he did not have the time to attend necessary formal board meetings. In November 2005, a book detailing the war between Oracle and Informix was published. “The Real Story of Informix Software and Phil White” provides a detailed chronology of the battle of Informix against Oracle, and how Informix Software’s CEO Phil White landed in jail because of his obsession to overtake Ellison.
Once Informix and Sybase were defeated, Oracle enjoyed years of industry dominance until the rise of Microsoft’s SQL Server in the late 90s and IBM’s acquisition of Informix Software in 2001 to complement their DB2 database. Today Oracle’s main competition for new database licenses on UNIX, Linux, and Windows operating systems is with IBM’s DB2, the open source database MySQL (bought by Sun in 2008), and with Microsoft SQL Server (which only runs on Windows). IBM’s DB2 still dominates the mainframe database market.
In 2005, Oracle paid Ellison a $975,000 salary, a $6,500,000 bonus, and other compensation of $955,100.
Forbes listed Ellison’s 2005 net worth as $18.4 billion, making him one of the richest people in America, and the ninth richest man in the world. For a short period in 2000, Ellison was the richest man in the world. In 2006, Forbes ranked Ellison as the richest Californian. Ellison also owns large stakes in both Salesforce.com and NetSuite.
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Eric Beliguila Muteck
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