Larry Ellison, the founder and former head of Oracle Corporation, is well-known for his extravagant entertainments, rather than talented company management. He’s one of the best examples of a self-made entrepreneur (net worth of $64.9 billion). Today we’ll find out how one of the most contradictory managers built his empire.
What is the difference between God and Larry Ellison? Ellison thinks he is God, God doesn’t want to be Ellison.
t’s essential to say some words about Larry’s childhood because it was the time of his personality formation.
Larry was a problem child. He spent his childhood in a two-room apartment in southern Chicago. Larry’s adoptive father, Louis, was an ex-pat from the Crimea. He took the name Ellison to hide his Jewish origin. Louis was a modest civil servant, who made a fortune on real estate in Chicago and lost it during the Great Depression.
Larry was an independent adolescent, which often led to ‘civil wars’ between him and his adoptive father. Louis was a problem person as his son. “You will never achieve anything, damn loser,” – the father was looking at Larry in dismay. “There is no bullshit in the newspapers about successful guys. They do not fail comrades. And they don’t break their noses as silly as you!”
Larry didn’t use to be a fool at all. In truth, he was considering himself smarter than all his classmates and hesitating to declare this. He was interested in things that were happening outside the school as lessons were too dull for him.
After graduating from the school, Larry entered the University of Illinois. The future began to seem cloudless, student life was dragging him headlong, and it was easy to study. Unfortunately, his adoptive mother dies during the final exams and he gives up the university.
Having sunk to the bottom, the real Larry gropes it, pushes away, and receives a new impetus for upward movement. Searching for the meaning of life and looking around with an empty look, Ellison suddenly finds a new passion – computers, and programming.
Larry first became interested in the subject magazines. Then he began to attend parties, where the same newbies like him were gathering. Larry dived into the sphere very quickly unlike the others. Giant iron boxes and sets of punch cards turned out to be Larry’s most faithful friends. After a few months, he realized that he was able to develop simple programs much better than the others.
Larry quickly moved to sunny California, where he made his first career steps. He was developing custom programs and began to earn pretty good money. Nevertheless, Ellison was completely unable to save.
A difficult economic situation didn’t break him. Larry was a dreamer and visionary. He knew that the future was behind computers and the first one who would learn how to deal with them would be the king.
In the early 70s, Ellison was working for a small company – Amtex. When he joined it, he already knew how to develop powerful databases that process various types of payments and almost all banking operations.
That was the time when Larry developed Oracle. It was a convenient, multi-functional, and almost perfect database. It was a huge live mechanism that could process an enormous amount of requests and was served at an intuitive level. There were no impossible tasks for it. Oracle could do everything.
This software was too good to be sold. In 1977, Larry Ellison and the former Amtex CEO Robert Miner founded their own company, called Oracle. The oracle is the one who gives correct answers to all the questions.
Larry believed that computers were the future. Nevertheless, he thought that these machines should belong to large corporations, no to individuals. His vision of the Tech future was quite different from Bill Gates and Paul Allen.
Oracle is a DBMS (database management system). It’s used for the distributed data storage: customer lists, equipment data, employee credentials, financial records, transaction history, correspondence, legal documents, and much more.
Ellison was roughly explaining the same thing to his first customers. His software could do breathtaking things: for example, select one store from a supermarket chain that works better than others, determine the most demanded cheese in Florida in April, etc. Oracle was able to process a bunch of different data, and therefore the first customers were the CIA and the US Air Force.
Breakthrough, IPO, and Crisis
In 1980, Ellison’s company had only eight employees (including three cofounders: Larry himself, then Bob Miner and Ed Oates). Their income was less than one million. A breakthrough happened after 15 months. IBM began to install Oracle, and over the next seven years, Oracle’s sales doubled every year.
In 1986, Oracle became a public company, and its initial public valuation was $31.5 million. It was one of the fastest-growing companies in the United States. Nevertheless, the company began to bear its first losses in 1990. The market value of the company fell by 80 percent, and it seemed that the company was on the verge of bankruptcy.
Ellison took a strategic step and replaced most of the management team with more experienced managers. At this time, he gave all the management power into the hands of professionals, and he concentrated his efforts on improving the software.
It was the moment when Oracle became the main Microsoft’s rival on the corporate database market.
The development of Oracle followed a “tough scenario”. Larry Ellison was making a lot of loud statements, such as “There are too many players on the software market, of which only the largest should remain, and small companies will either be bought out by large ones or simply evaporate.” Or – “We need all the specialists, clients and money of medium-sized companies!”, etc.
Larry Ellison bought PeopleSoft for $10 billion. A few more companies have been absorbed in the last decade. He spent $15 billion on it. The market begins to realize what Larry Ellison is and how his company plans to survive this highly competitive market. Larry had a very tough staff policy despite the strikes. Losing a job is scary, but business is business. Business is beyond people for Oracle’s founder.
The company continues its policy of purchasing everything that could strengthen its position. In 2009, Oracle acquired the Sun Microsystems campaign. This deal opened up tremendous opportunities for Larry Ellison in the hardware field.
Larry Ellison is a real actor, he loves playing the public, and he doesn’t care whether he speaks to a huge audience or a small group of people. Larry and other Oracle managers consider innovation one of the engines of their success. Someone calls him a brilliant negotiator and manager.
Nevertheless, the majority of people can’t stand Larry’s style. They describe him as an egomaniac who uses people’s fears and greed as motivation tools. He even encourages internal competition every time he gets an opportunity.
Ellison himself said that he invented his style of management called MBR (management by ridicule). Despite this totalitarian and humiliating style, he boosted hundreds of careers. Gary Bloom, a former Oracle employee remembers:
“What ends up happening for a large number of people is they end up in positions within Oracle probably years in advance of where they thought they’d be at that level in their career.”
It’s safe to say that Larry Ellison showed that being a tyrant is almost the only way to survive in Silicon Valley. It’s a business, it doesn’t do sorry.