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Ellison steps down as Oracle CEO as Hurd, Catz step up to shared CEO role

Den Howlett Profile picture for user gonzodaddy September 18, 2014
Summary:
Larry Ellison vacates the CEO role at Oracle as Hurd and Catz step up, continues as CTO and Chairman. A new beginning or more of the same?

Larry Ellison
Larry Ellison exits - stage right

Larry Ellison, CEO Oracle is stepping down as CEO but will continue in the role of CTO. Mark Hurd and Safra Catz step up as co-CEOs. We didn't see that one coming and perhaps we should have done.

Earlier in the week, Stuart reported that Ellison had given what up to then was a very rare interview to Advertising Age should have put our antenna on alert. We said in quasi prescient fashion:

Earlier in the year, Oracle President Mark Hurd went out of his way to point out that there weren’t many industry events outside of Oracle OpenWorld that were bookended by him and his boss Larry Ellison.

What we thought we saw we kinda didn't but as Stuart correctly pointed out:

Make no mistake. If Larry’s coming out to pitch the Oracle gospel around the marketing cloud, then this means business. I’ve said it before in the context of the HCM market, Ellison (on form) remains Oracle’s biggest weapon and letting the ‘big beast’ out to roar is hugely welcome development looked at from the perspective of the company’s prospects.

You have to have seen this kind of thing in real life to fully appreciate Ellison's ability to shake trees. Many of us will have our own Ellison story to tell but for the moment, I am going to restrict myself to one from 2009 which I only saw second hand. At the time, Ellison was trash talking cloud but in and amongst, he came out with a statement which resonates loudly with this commentator. Talking to the fashionista nature of the industry, he famously said:

Last year it was fuschsia, this year it's puce.

I've included the video from which this was taken because it is such great entertainment value. And so true.

Moving on.

With the benefit of hindsight, we could have predicted this last year when Ellison failed to show up for his own keynote in favor of watching his America's Cup team bring home a dramatic win in his favorite sport. At the time, I felt he was snubbing the very people who pay his company's bills but when you fast forward to today, it is easy to see how that choice might represent a stepping stone towards today's news.

Business as usual

Mark_Hurd
Mark Hurd - co-CEO Oracle

The company is pitching this as business as usual but in reality, Ellison's semi-retirement has been an ongoing topic of peanut gallery chatter for some time. I prefer to think of it as a logical progression.

The fact Ellison seems to have developed enough trust for Hurd and Catz (yes - the jokes have already started circulating on that combo) is a very big deal.

Those with very long memories will recall when Ray Lane was brought in to clean up operations at a time when Oracle was in danger of going down. Lane brought a rigor and discipline that had been missing but never understood that Ellison was not ready to give up the reins at a time when Lane felt he had a shot at the CEO role. He got thrown under the bus and has been bitter ever since.

Creating a co-CEO position is something you would not expect from Oracle since one of its key strengths has been the sure footedness that comes from having one leader. If anything, it is something of a strange move by Oracle since the company was always critical of SAP for having that structure.

However, others will argue that Hurd and Catz fulfill different roles that complement one another. While some will be concerned that Hurd's past history as a ruthless cost cutter may be an impediment, there is no doubting the company's iron discipline, for which Catz can take a lot of credit, sees Oracle today with one of the strongest balance sheets in the enterprise applications world.

safra_catz
Safra Catz - co-CEO Oracle

Retaining the CTO role means Ellison get to keep his hands on his beloved technology. Few people realize this but Ellison is the quintessential tech company leader who has always been incredibly passionate about the products his company builds and the database in particular. The real question though is to what extent is Ellison formalizing a de facto situation rather than signalling a genuine change.

The press releases imply the former rather than the latter, a view with which I tend to agree. What matters most now though is what happens in the immediate ranks below the managing board. Oracle has a deep bench of great leaders and if the transition is managed well, then Oracle will be fine. But if this serves as a green light for some to move on then it may be a different matter.

Grand finale

One thing is for sure. Ellison's departure coming almost on the eve of Oracle OpenWorld sets up an interesting dynamic. Freed from the shackles of top leadership you have to wonder what will happen when Ellison and Vishal Sikka share - albeit briefly - the same stage. It is hard to imagine Ellison failing to use the occasion to have one last gigantic swipe at SAP.

Sikka was until recently executive board member at SAP and largely credited with developing HANA. Now CEO of Infosys, Sikka is slated to give a keynote at OpenWorld. I've been asked multiple times what I think will happen and I can say. As of today? I have absolutely no idea and even if I did I would not say anything. I would be very surprised to hear Sikka say anything that would hint at hard feelings for his old company.

However, I can easily picture Ellison taking the opportunity to set him up. Something along the lines of: "Great to see you Vishal. Now tell me - we're at war with Eurasia, we've always been at war with Eurasia. Right?"

That line comes from 1984 referencing the Ministry of Truth and carries multiple implications. On the one hand it would be a not so subtle way for Ellison to dig into SAP.  On the other, it would be a tacit acknowledgment of the way in which Ellison has himself flipflopped on technology topics and specifically the cloud.

Whatever happens, I am booked for a front row seat.

In the meantime, we now need to focus on Oracle's Q1 earnings - which was a miss.

 

Disclosure: SAP and Oracle are premier partners at time of writing

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