Softwar

by Matthew Symonds

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  CONTENTS

  Acknowledgments

  Author’s Note

  1. Larry and Me

  2. On the Road

  3. The War on Complexity

  4. Beginnings

  5. To the Limit

  6. Growing Up

  7. Best-of-Breed

  8. Falling Out

  9. The Laboratory

  10. Ready or Not . . .

  11. Taking Stock

  12. Hungarian Lessons

  13. Hill by Hill

  14. The Last Database

  15. Enemies

  16. Chained to the Job

  17. Alternative Stress

  18. Sayonara Swan Song

  19. Family Values

  20. Three Strikes, You’re Out

  21. Larryland

  22. A Life Beyond Oracle

  23. “A Scrap of Information”

  24. The Golden Nugget

  25. A Perfect Storm

  26. “The First Loser”

  27. The Biggest Water Bottle

  Photographs

  Afterword

  About the Author

  Index

  To Alison and the children with all my love

  ACKNOWLEDGMENTS

  There are many people without whose help and advice this book could not have been written. Above all, I’m grateful to Larry Ellison, whose enthusiasm and commitment never wavered even after it became clear that the story would not only have its share of twists and turns but would have a conclusion somewhat less clear cut than he had hoped. My thanks also to Melanie Craft, who bore with fortitude my invasion of her and Larry’s privacy. Very many Oracle executives, both past and present, gave freely of their time and thoughts. It’s not possible to mention everyone; they know who they are, and they are quoted in the book. But with Mark Jarvis, Jeff Henley, Safra Catz, Mark Barrenechea, Jay Nussbaum, and Ron Wohl I enjoyed a kind of extended conversation over a period getting on for two years. I was continually struck by the frankness and openness of those working for Oracle today, even when it came to talking about their boss. I would also like to record my thanks to Ray Lane. He understood that my relationship with Ellison was collaborative, but he still consented to be interviewed on two occasions, each time for several hours. He may not realize it, but he still has some good friends at Oracle. I also want to mention Joshua Lederberg, Steve Jobs, Jimmy Linn, Jon Bannenberg, and Laura Seccombe, who, in their different ways, gave me insights into Ellison’s life that were unique. I must thank, too, those who helped me in practical ways, in particular Joyce Higashi, Carolyn Balkenhol, and Judy Sim. Without them there really would have been no book. I should pay tribute to my literary agent, Andrew Wylie, and my editor at Simon & Schuster, Geoff Kloske. From the outset, Andrew helped shape and define the project and continually buoyed me with his confidence and support; Geoff honed, tightened, and, where necessary, discreetly made me intelligible to Americans. Finally, my thanks to Bill Emmott, the editor of The Economist, who graciously allowed me a year’s leave to pursue this project and whose imaginative suggestion in 1997 that I should write about the unfolding drama of the Internet led directly to my meeting Larry Ellison.

  AUTHOR’S NOTE

  In March 2000, I received a telephone call from Larry Ellison. He had an idea for doing a book about e-business and globalization and wanted to know if I would be interested in coauthorship. I was flattered, but it wasn’t something I wanted to do for a number of reasons. In the first place, a relationship with Ellison of that kind would mean I would have to give up writing about the technology business for The Economist because of the potential for conflict of interest. Second, I had no desire to add to the torrent of indifferent books about the e-business phenomenon that were then flooding the business publishing market. Third, although we shared many views and I had grown to like Ellison and enjoy his company in the brief time I had known him, I thought that coauthoring a book with him would be a nightmare.

  But while we were talking, a much more appealing proposition began to form in my mind: what I would be interested in doing was writing an intimate portrait of Ellison and his company on the basis of having a very high degree of access to both him and Oracle. I explained that I would have to have complete editorial control and that it might be some time before I could take leave of absence from The Economist. Ellison’s answer was immediate: he’d love me to do it, and he was prepared to wait until I was ready.

  Nine months later, in December 2000, accompanied by my New York–based literary agent, Andrew Wylie, I met with Ellison at his Japanese-style villa in Atherton, a leafy and very expensive suburb some twenty miles to the southwest of San Francisco that is home to much of the Silicon Valley establishment. The meeting had three purposes. First, I needed to establish the basis of my working relationship with Ellison: Wylie had concluded that there should be a formal collaboration agreement between us. Second, although Ellison and I had recently discussed the book over dinner at my house in London, I did not yet have a settled idea of what it should be, although I had already ruled out doing a conventional biography. I knew that if the project was to engage Ellison it would have to be relevant to his current concerns. Most of all, I wanted to test Ellison’s claim that Oracle was poised for true greatness.

  One of the things I had noticed while covering the technology business was that many of its key players had extraordinarily little interest in even the recent past. It was as much as most of them could do to remember what it was that Microsoft had done to end up in court. Even Marc Andreessen was much keener to talk about the new businesses he was investing in than his epic struggle against Bill Gates while at Netscape. His attitude was: been there; done that; move on. When Microsoft’s witnesses were confronted with damning e-mails they’d written only a couple of years before, it is just possible their surprise and struggle to guess what they might have meant at the time wasn’t completely phony. Ellison doesn’t suffer from that kind of amnesia, but even though he reads history voraciously and tries to learn from it, what really interests him is not the last five years but the next five. To Ellison, the present and the near future elide so gracefully as to be almost indistinguishable. And when talking about software, last year is another country.

  A collaboration agreement that gave me everything I would need was quickly reached. An innovative twist, devised by Andrew Wylie, was that Ellison would have a kind of right of reply or commentary within the book, which he could use either to express a counterpoint to any of my conclusions that he disagreed with or to amplify things that he thought important. Neither of us would be able to alter the words of the other. It is a unique form of joint copyright. I think it has worked.

  There is one other thing I would like to say about my relationship with Ellison. In the course of my research, I met, somewhat to my surprise, a number of people who assumed that Ellison was paying me to write what he hoped would be a sympathetic account of his life. This is not the case. My compensation and expenses have been covered in full by the advance from my publisher. That said, I have stayed as his guest during my many visits to Oracle and have traveled with him on his private planes. I have also spent time with Ellison on his boats, recording extensive interviews during his vacations and, most recently, joining him in Auckland to report at first hand on his America’s Cup campaign. Has this degree of intimacy undermined my ability to be objective about Ellison? It is hard for me to say, but I don’t believe so. I like Elliso
n and there is much about him that I admire, but I am frequently critical of him. Most of us, I think, are able to reach reasonably objective judgments about even our closest friends. Liking them does not mean being oblivious to their faults. I have written the truth about Ellison as I have found it and reported faithfully, for better or ill, the words of the many people who know him whom I have interviewed. When Ellison’s version of events appears questionable or his behavior less than admirable, I have said so. But to a great extent, the picture of Ellison that emerges is one formed by his own words during innumerable, at times brutally frank, conversations conducted over a period of two years. Ellison is, more often than not, his own harshest and most unrelenting critic.

  1

  LARRY AND ME

  I first met Larry Ellison in his office at Oracle’s Redwood Shores headquarters on December 8, 1997. I had recently become The Economist’s technology and communications editor, and this was the first of what became regular visits to Silicon Valley. I had just completed two days of meetings at Microsoft’s campus at Redmond, Washington, 800 miles to the north, where an array of impressively on-message executives had been wheeled out for my benefit—though unfortunately not Bill Gates himself. I would see him on my next visit, I was assured. But there was a strong hint that “face time with Bill” was conditional on The Economist’s taking a more sympathetic line toward Microsoft in the antitrust case that the Department of Justice was preparing against it. After a similar turn involving Oracle’s most senior managers, I had been promised time with Ellison himself.

  It turned out I’d picked a bad afternoon. I didn’t know it at the time, but Oracle was about to issue its first earnings warning since the firm had nearly gone under in 1990. The economic crisis in Asia had taken its toll, and in North America, slowing license sales of Oracle’s most important product, its all-conquering database, seemed to support the argument of some analysts that Oracle was dominating a market that was getting close to saturation. The following day, the stock lost 30 percent of its value.

  As I waited, I could see Ellison through the glass doors of the eleventh-floor boardroom, huddled in conversation. He was already an hour and a half late for his interview with me and I knew he had to fly to New York later in the day to deliver a keynote speech at an Internet conference. I had heard stories about Ellison’s lateness and didn’t believe the press flak’s distracted excuses about an “emergency” being the cause of the delay. Let’s leave it for another time, I suggested grumpily. But at that moment, I was suddenly ushered into Ellison’s handsome office with its expensive Japanese artifacts and panoramic views across the bay.

  Despite the strain he must have been under, Ellison was courtesy itself. After apologizing profusely for his lateness, he began to talk about technology. His theme was the failure of the prevailing computer architecture of the day, known as client/server (because the job of running software was shared between server computers in corporate data centers and their desktop PC “clients”). He believed client/server was an “evolutionary dead end” that was “distributing complexity” with disastrous consequences. The answer was a new model of computing based on the Internet, in which the complexity and the computing would be hidden in the network. Users would be able to access everything they needed through a web browser that could be run by a machine much less expensive and cantankerous than a PC—a network computer.

  There was nothing unexpected in this. It was a drum that Ellison had been beating for some time, and conceptually it was little different from Sun Microsystems’s famous slogan that “the network is the computer.” Ellison had first declared the PC “a ridiculous device” at a technology conference in Paris more than two years earlier. The speech, at the height of the hoopla surrounding the release of Windows 95 and in front of an audience that included Bill Gates, caused a minor sensation.1

  Ellison ran through a well-rehearsed routine, but there was nonetheless something extraordinarily compelling about his argument. He seemed to be speaking directly to the problems that anyone who depended on computers at work knew all too well: the crash-prone PC with its incomprehensible error messages; the incredible effort of maintaining thousands of PCs across a company; the apparently insurmountable difficulties of getting reasonable performance and scalability across wide-area networks. The arguments seemed utterly rational and commonsensical, while Ellison himself was passionate and funny.

  • • •

  Over the next three years, Ellison was proved to be far more right than wrong. The network computer itself proved to be a dazzling digression: Ellison had been right about how the Internet would change the way computers were used, but most people still reckoned that the best way of getting to the Internet was through a PC. A few network computers were made by Oracle and a loosely knit coalition of Microsoft’s enemies, such as IBM and Sun Microsystems, but tumbling PC prices and the limitations imposed by slow dial-up connections quickly condemned them to irrelevance. Microsoft crowed; Ellison was made to look a bit foolish. But the PC versus the NC was a sideshow that stole attention from the real struggle for the future of computing. What mattered was that Ellison had understood better than anyone the potential impact of the Internet on enterprise computing in general and on Oracle in particular.2

  While the technology analysts in the investment banks and the consultancies confidently predicted the maturing of the database market, Ellison realized that the Internet would exponentially increase both the number of database transactions and the number of people who would interact with Oracle’s databases. That would mean more license growth than the analysts had dreamed of. Every time someone looked for a book on Amazon.com, bought stock through E*TRADE, or put something up for auction on eBay, that person was using an Oracle database. Ellison believed that the database would be the essential platform for Internet computing, effectively displacing the once all-important operating system.

  Within companies, the same thing would happen. Instead of business software being used by only a handful of specialists, Internet-based applications could be extended to anyone with authorization and a browser. Every time one of those applications was used, there was a good chance that it would query the database that the application ran on. When the networking giant Cisco Systems talked of having a “URL for everything we do,” it was another way of saying that everybody they employed was constantly using the firm’s Oracle database. In a client/server world, less sophisticated databases, such as Microsoft’s SQL Server, might have become “good enough” for many businesses, but with Internet computing came the need for databases that could support millions of users at once. With the coming of e-business, Oracle’s databases became at least as much an essential element of infrastructure as Cisco’s routers or the big server computers made by the likes of Sun that were also back in fashion. It was no coincidence that in early 2000 those three companies—the three superstars of the Internet—had a combined market value of nearly a trillion dollars.

  If that was a stroke of luck for Oracle, what wasn’t was Ellison’s decision, to the horror of many colleagues and customers, to abandon all further development of client/server-based applications and concentrate the firm’s entire engineering effort on building for the new computing architecture of the Internet. While rivals in the apps business, such as the German powerhouse SAP and PeopleSoft, talked up the Internet and put a web front-end on some of their products, Ellison went much further. Oracle was the first established software firm to risk everything on the new paradigm.

  His rationale was simple: Oracle could never hope to be number one in enterprise applications as long as client/server prevailed—it was fated always to play second fiddle to SAP, whose strength in the enterprise apps market almost matched Oracle’s dominance in databases. By getting to the Internet first, assuming that the software could be made to work, Ellison would force Oracle’s competitors to become followers, gaining vital time-to-market over them. And, crucially in an industry in which perception is as important as real
ity, if Ellison’s bet came off, it would make Oracle appear very cool.

  The strategy of harnessing Internet hype and turning Oracle from stodgy to hip—Ellison’s mantra had become “the Internet changes everything”—helped drive Oracle’s market cap in 2000 to within touching distance of a Microsoft brought low by the government’s antitrust case. Ellison even briefly overtook Bill Gates as the world’s richest man, with a net worth of more than $50 billion. If newspaper and magazine articles about Ellison still found plenty of space to describe in loving detail his high-rolling ways, they were also forced to concede that there was substance too. Even though Ellison refused to conform to their idea of what an Über-geek should look and sound like—Gates had that one sewn up—there was a growing willingness to concede that, although as arrogant and addicted to hyperbole as ever, Ellison probably was an authentic business and technology visionary.

  • • •

  In December 2000, when I was thinking about writing this book, Ellison told me that he was preparing to bet the company all over again in a do-or-die attempt to make Oracle not just the biggest software company, but the world’s most influential corporation. To Ellison, that meant not so much passing Microsoft in revenues, although that would be nice, but Oracle having become the successor to industrial icons such as Ford and IBM, whose products and vision had changed the way the world works. He couldn’t bear to include Microsoft in that pantheon. At first it sounded like a characteristic piece of Ellisonian exaggeration. With Ellison, you never quite knew whether he was being provocative for the sake of it or whether he really meant it.

  Before deciding to do the book, I went to see him at his home in Atherton. I needed to gauge how serious he really was. After talking through the day and well into the night, I concluded that he was very serious indeed.