Larry Ellison is stepping down as CEO of Oracle. The news rocked the industry last week. When I heard, I was sitting in a meeting and thought to myself: This is where I was when Larry Ellison resigned.
Don’t cry for Ellison; he’s stepping up and over to become executive chairman and CTO. The new co-CEOs, Safra Catz and Mark Hurd, had been co-presidents reporting to Ellison. Now they report directly to the Oracle board, which Ellison oversees. That’s just weird.
Why did Ellison step down? Most observers agree it was time for a change at Oracle, after 37 years with Ellison as CEO. Perhaps the board agreed. It’s no mystery that Oracle has had difficulties with emerging technology, and the company appeared to be stuck in the past. Cloud computing seems to be one of those emerging technologies Oracle has struggled to understand and accept -- Ellison long pooh-poohed the notion, and his company's eventual "adoption" seemed more lip service than true embrace.
I’ve not been a fan of Oracle’s movement into the cloud. For the most part, Oracle doesn’t get it, beyond some SaaS offerings. By now, I would have expected Oracle to lead database as a service, PaaS, and IaaS, but most of its efforts to date seem phoned in.
Look at where Oracle is today and where it needs to go. Maybe Oracle's board believed it was time for new leadership. But the new leadership is the old leadership. We’ll see how that goes.
Oracle needs to take hard turns to get cloud computing right. It's made a few good moves, but not enough. Adapting to the cloud seems to be a hard slog for Oracle, so it's not even keeping up with the rest of the industry. Moving to the cloud requires not only a technical change but a systemic culture change as well -- where I suspect Oracle is struggling.
Oracle is about big deals, big agreements, and big software. The cloud is about selling software as a utility, which Oracle may find a hard time doing. It’s the same sort of business model shift that moved people from regularly scheduled meetings with Big Blue’s sales reps to clicks on a credit card in the App Store.
Oracle may have seen the writing on the wall, and Ellison was more in the way than helpful, so perhaps he’s taking a more tactical role now. There's no shame in that: After 37 years, nobody can call Ellison's tenure at Oracle a bad run.