As Larry Ellison Steps Down as CEO, Industry Insiders Ponder the End of an Era

In what is being heralded as an epic change at Oracle, Larry Ellison, the charismatic CEO of Oracle, is stepping down and will be succeeded by Safra Catz and Mark Hurd who will share the CEO position. They have each been president of Oracle until now. Oracle said its board of directors had elected Ellison to the position of executive chairman of Oracle's board and appointed him the company's chief technology officer. 

Despite the widespread pronouncements that this is the end of an era and that Ellison is relinquishing his membership in the exclusive club of rock-star tech leaders that has included Apple’s Steve Jobs and Microsoft’s Bill Gates, some industry insiders believe that is simply not the case. Ellison, they say, will remain a force to be reckoned with at Oracle and just because he is stepping away from the CEO role does not mean he will not have active involvement, nor that he would not change his role in the future.

What the Oracle Changes Mean

All manufacturing, finance, and legal functions will continue to report to Oracle CEO, Safra Catz. All sales, service and vertical industry global business units will continue to report to Oracle CEO, Mark Hurd. All software and hardware engineering functions will continue to report to Oracle chairman and CTO, Larry Ellison. In addition, now Catz and Hurd will report to the board of which Ellison is chairman, rather than to Ellison himself. In addition, Jeff Henley, who has served as Oracle's chairman for the last 10 years, was appointed Oracle's vice chairman of the board.

Ellison co-founded the company in 1977 with Bob Miner and Ed Oates under the name Software Development Laboratories. It was later renamed Oracle Systems Corporation, and ultimately became Oracle Corporation.

Larry Ellison is not going to be the visible face of Oracle, but if he is staying on as CTO, as I have read, he is likely to be very much still involved in the nuts and bolts of their innovation and development cycles. I think he is staying intimately involved with the business. Moving away from the day-to-day operation involvement will give him more time to do more of the things he loves. He just doesn’t want all the headaches of having to deal with all the things that a CEO deals with – legal and stockholder issues,” observed Joe McKendrick, Unisphere Research analyst and contributing editor to Database Trends and Applications.

Ellison’s Announcement - Not Much of a Surprise?

Despite his leadership role with Oracle, Ellison also has long had other well-reported interests. A billionaire, the 70-year-old Ellison is a licensed pilot and known for his avid interest in sailboat racing, with Oracle TEAM USA winning the America’s Cup for the second time in 2013.

The announcement is not really all that surprising, said John Matelski, president of the Independent Oracle Users Group, and CIO and director of information technology for DeKalb County (Georgia). “Love him or not, Larry is a great leader, who has provided vision and leadership not just to Oracle as a corporation, but the entire technology industry.  Though Ellison is a founding father of Oracle, he recognizes the fact that, in order to ensure the continued success of the company, succession planning is key.  By making this move now and retaining continued leadership and participation as the chairman of the board and as chief technology officer, this decision enables the company to transition as seamlessly as possible.  Also, the fact that he has two seasoned, tenured executives in Safra and Mark that can run the company – and that have been part of his leadership team for a number of years – all but ensures that his vision and direction will continue.”

Agreeing that the move is not a shock, Michael Corey, president of Ntirety, a division of HOSTING, had a slightly different take on the leadership changes at Oracle.   Corey is a past president and lifetime member of the Independent Oracle Users Group as well as an Oracle ACE. “I am not surprised by this at all,” said Corey, who said he saw the change coming. As proof, Corey said that at Oracle OpenWorld in 2013, “Larry made a choice to stay in the boat and celebrate with the America’s Cup team,” rather than delivering his customary second keynote later in the conference despite the fact that he knew there were thousands of people waiting in the room.  "On the one hand, he is a billionaire, and on the other hand, he has got the job and I think he has been doing this for awhile and he does this – he slowly backs away."

There is no denying the impact Ellison’s leadership has had nor the fact that the choice of  Mark Hurd and Safra Catz will extend his vision, said Guy Harrison, a DBTA columnist, an executive director of R&D at Dell, an Oracle ACE, and author of the “Oracle Performance Survival Guide.”  “While Larry Ellison continued to have an incredible influence over Oracle database and other technologies throughout his entire tenure as CEO, his deputies are people of enormous capability. It doesn't seem likely to me that Oracle will stumble as a consequence of his departure, though I'm sure his influence will be missed.”

On a more personal note, Harrison added, “As someone who founded a career on relational databases in general and Oracle specifically, very few industry leaders have had as much influence on my life as Larry Ellison. Once Edgar Codd defined the relational model it was probably inevitable that this would come to be the dominant database architecture for a generation. But Larry Ellison deserves incredible credit for being the first person to successfully commercialize the relational model and to pioneer many of the relational database features that we today take for granted.  One can only speculate on how RDBMSs would have evolved in his absence, but personally I think database professionals have a lot to thank him for.”

Moving On or Moving Closer to the Center?

Still, Corey said he expects Ellison could return. “How long can you stay passionate? I think that he needs to recharge his batteries and I think he will be back.” Corey noted that years ago, in the 1990s, Ellison stepped back from the company when Ray Lane was running it “and then he came back with a vengeance to do it again,” and took control. “To a certain extent, he is like anybody. He digs in hard and he enjoys it, he has a passion for it, and then after doing it for a number of years, he backs away.”

As to whether this is the end of an era, McKendrick also demurred. “I don’t think so. He is not stepping away from Oracle. He is still the ultimate power to be at Oracle. He will still be the chairman of the board and in taking on the role of CTO that means he is the innovator - the guy who will guide the technology strategy.  I see him as stepping back to the role he had in the early days at Oracle, a role he probably loved as a founder back in the late 1970s when he started the whole thing. Back then, it was no doubt him and probably two other people who were doing everything around the company including building the software, building the database, so going to the role of CTO can be seen as going back to his roots.”

Future Oracle Directions with Safra Catz and Mark Hurd

Ellison’s move to become CTO may be an indication that he wants to redirect the company. “Oracle is a huge company now and it has a lot of different product lines. It is in a lot of different areas. I am sure he is not happy with the way it has been moving. Especially within the cloud Oracle has had a lot of criticism in recent years that it is not moving fast enough and that whatever cloud offerings it has are proprietary to their technology. It has not been fully engaged in that area,” said McKendrick. “That being said, Larry Ellison has a good sense of what the cloud is and what its potential is. He is also a part owner of NetSuite, which is the cloud ERP company and in some ways a competitor to Oracle at its ERP level.  I think he sees the opportunities and feels that maybe he can guide the company in a stronger way in the right direction.”

Larry Ellison created dynamic business processes while at the helm of Oracle that made the organization highly successful, observed Alyssa Johnson, president of the Oracle Applications Users Group, and practice director of Rolta, a global Oracle Platinum Partner and provider of Oracle-centric transformational services and solutions. “Moving forward,” she said, “I anticipate that these processes will continue and will enable Oracle to prosper.”

The transition strategy will ensure that the company, its employees and its customers and partners will continue to grow with the knowledge that it is unlikely that there will be any any significant changes in vision or corporate direction, noted Matelski. “From an IOUG perspective, I do not believe that there will be any adverse impact.  Quite honestly, though the IOUG has clearly benefited from Mr. Ellison's leadership, we have always had most of our interactions at a senior executive level with Mark and Safra.  Both of them have actually spoken at our conference in prior years, and both have been more than happy to engage with the IOUG and our member community.  I must reiterate, Larry's job functions and titles may be changing, however, I think he has consciously created a transition plan, which sounds like it should have no adverse impact on the IOUG and our membership.” 

Agreeing that the management change did not come out of the blue, Don Sullivan, product line marketing manager for business-critical applications at VMware, noted that although Ellison has been able to drive the company for most of his career to "unbelievable heights,” he has also “seemed detached” in the last couple of years. While observing that it remains to be seen whether Oracle can continue to be the force for innovation that it has been with Ellison as CEO, Sullivan, who is an Oracle-certified master, and spent 7 years with Oracle as an Oracle University instructor and ATS post sales consultant, said that he does expect to see a “friendlier” relationship between Oracle and VMware virtualization which would be “very good for Oracle’s customer base as well as ours.”

Ntirety’s Corey observed that in building a new level of management, the board is doing its job and enabling continuity of leadership. “They do need to be thinking about it,” he said. However, Corey noted, that in his view the idea of joint CEOs poses its own problems in terms of clarity of leadership vision.