Network: Meet Larry Ellison, the software supremo with an ego to match his income
The billionaire behind Oracle once again has his eye on Apple Computer. But does he want to save the ailing company, or is he just trying to get the better of Bill Gates? By Cliff Joseph
Tuesday 29 April 1997
Ellison is the co-founder and chief executive officer of Oracle Corporation, one of the world's three biggest software companies. Oracle specialises in database software, the programs that companies use to process sales orders, customer records and other types of information. Whenever you book an airline flight or buy something with a credit card, the chances are that Oracle's software is processing the order. It's not glamorous, and Oracle isn't a household name in the way that its arch-rival Microsoft is - a fact that seems to drive Ellison to distraction - but it's very big business. And Ellison's share of that business is worth about $6bn.
His life is the classic American rags-to-riches story. Abandoned by his natural parents, he was raised by relatives and has become one of America's richest men. One of his most often quoted remarks is: "It's better to be lucky than smart."
There's no denying, though, that Ellison has managed to be both.
His luck came in being in the right place at the right time. After dropping out of university in the late Sixties, he headed to California and Silicon Valley, where he worked as a programmer - and smoked the occasional joint. One of his other well-known quotes is that, unlike Bill Clinton, he did inhale.
He made his smart move in 1977, when he heard about an IBM project to develop a new type of database program. Ellison liked the idea, but whereas IBM's program was designed for mainframe computers, he decided to develop a program that could be used on many different types of computers. Along with his friend Rob Miner, Ellison set up Software Development Laboratories to develop the new database program. Then, when desktop PCs began to take over from mainframes in the mid-Eighties, they had the perfect product ready and waiting.
The company, renamed Oracle, grew quickly throughout the decade, and the ambitious Ellison pushed his sales teams hard in order to consolidate the firm's position. He was quick to fire anyone whose performance didn't satisfy him, and became known for his authoritarian attitude towards staff.
However, his aggressive management style backfired in 1990, when it was discovered that sales teams had been counting advance orders as actual income in order to meet Ellison's demanding sales targets. Oracle almost went bankrupt, but Ellison brought in a new management team that turned the company around, and it now has annual revenues of more than $5bn.
Another smart move by Ellison was his decision to modify the Oracle database so that it could handle video and multimedia data as well as just numbers and text.
Now called the Oracle Media Server, the program is well placed to exploit the growth of multimedia on the Internet.
It is also being used in several trials for interactive television services, and should ensure that Oracle plays an important part in the development of the information superhighway.
Along the way, Ellison's private life has attained almost as high a profile as his business career. His self-confidence is legendary, and has led one critic to say that Ellison "needs a fork-lift to carry his ego around". His three divorces and fondness for fast cars are standard issue for a Silicon Valley billionaire, but even Bill Gates doesn't fly his own MIG- 29 jet fighter.
His age is variously reported as anywhere between 50 and 58 (current betting is on 52), but he remains an active sportsman, yacht-racing being a major hobby, and is well known for his expensive double-breasted suits and designer stubble.
A few months ago, a female ex-employee with whom Ellison had had an affair launched a lawsuit in which she alleged that he tempted several female employees into bed with the offer of an Acura sports car. Ellison claimed the offer was a joke but, when questioned, admitted that he had bought four Acuras in the previous year.
This playboy image is in total contrast to that of his great nemesis, Bill Gates of Microsoft. Gates is generally seen as the ultimate computer nerd, and this may be the explanation for the almost obsessive nature of Ellison's rivalry with him. Many industry observers characterise Ellison as the sports jock who wants to beat up the nerdy Gates. He is, they say, resentful of Gates' fame and success, and cannot understand why the bespectacled boffin attracts more attention and respect than his hunky, elegant self.
Ellison makes frequent attacks on Microsoft, and when Bill Gates revealed his plans to build a multimillion-dollar, hi-tech home on Lake Washington, he came up with a design for a building of his own, based on a Japanese monastery.
His monomania about Gates is also thought to be the motivation behind his regular attempts to buy Apple Computer, whose Macintosh operating system is the only real rival to Microsoft's Windows. He talks openly of his intention to overthrow Microsoft and, increasingly, his business activities seem to be planned with that one aim in mind.
The centre-piece of his plan is the NC - the "network computer".
Ellison argues that ordinary desktop PCs are too expensive and too complicated for most people. They need lots of memory and a fast processor in order to run Windows, and they need hard disks and CD-Rom drives to store additional programs such as word processors and spreadsheets.
In contrast, an NC has little storage and memory of its own, and can function only when it is connected to a network. This can be the Internet or a company's internal network. Instead of running Windows, the NC gets all the programs it needs from a central network computer called a server.
The simple design of the NC means that it will cost no more than $500, so it will appeal to both business users and home users who are looking for a low-cost method of connecting to the Internet.
Ellison makes no bones about it. "The NC is clearly part of our strategy to dethrone Microsoft," he says. And, needless to say, the software on the servers that control NCs will be written by Oracle. The NC's only drawback is that you still can't buy one. Oracle is a software company, and has no plans to produce NC hardware. Companies such as IBM, Sun and the British-based Acorn have all demonstrated NC systems, but none of them are widely available yet.
Still, that's no obstacle for a man of Ellison's ambition. If Oracle can't produce NCs, why not just buy a computer company that can?
Following Apple's recent financial problems, Ellison announced yet another bid to take control of the company and use it to manufacture NCs. (Two years ago he said that Apple should concentrate on its operating system and forget its "stupid" hardware business, but that was before he had seen the NC as his Microsoft-killer.)
The idea of Ellison taking control of Apple has horrified its religiously loyal users. However, like his plans for the NC, the Apple takeover bid has yet to produce any tangible results. Ellison says that he will make a final decision on Apple in the next few weeks, but many in the Mac industry are already writing the affair off as just another example of "Gates envy".
Even so, it's never a good idea to ignore someone like Larry Ellison.
After initially dismissing the NC, Microsoft recently announced the specification for a system that it calls the NetPC, which sounds suspiciously like a Windows version of the NC. So maybe Ellison is on to something, after all. There's no doubt that Ellison is both lucky and smart. The question now is whether Bill Gates is even luckier and smartern
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