Whither Oracle?

MyCustomer.com
5

Oracle's flamboyant CEO Larry Ellison usually enjoys his
trips to Europe, but when he arrives in Copenhagen next
week for the annual European Oracle Open World conference
he could be forgiven for having a few things on his mind to
distract him.

For starters there's the mess left behind by the California
state contract and the skeletons that have tumbled
obligingly out of the closet as a result of the inquiry
into the scandal. Fairly or unfairly, Oracle has not
emerged from this PR nightmare with any dignity and
the long term ramifications remain to be seen.

The emails that were released to the public domain between
Oracle and its partner Logicon hardly painted an impressive
picture of their joint sales tactics – although I find
it hard to have too much sympathy with the California
officials who cocked up big style with this deal. Never
should "buyer beware" be more important than when you are
spending millions of dollars worth of other people's money.

Equally nasty will be the aftertaste from the revelations
about the role of Ravi Mehta, the lobbyist hired by Oracle
and the man who urged the company to dole out money to key
political figures involved with the contract. Oracle
insists that it did not follow through with his
recommendations and there's no reason to disbelieve it –
but the fact remains that you don't hire a man like Mehta
for his expertise in relational technology so what was it
that Oracle did hire him for?

Then there's the issue of the company's overall financial
performance. Much is being made of the fact that it met
(lowered) analysts expectations for the fourth quarter, but
looked at in another light the current figures are
shockingly bleak. Applications revenues are down 27 per
cent year on year, database licences down 29 per cent, and
perhaps the most psychologically significant, full year
revenues are down year on year for the first
time ever.

Now OK, it's a tough marketplace out there, but even by
those standards there have to be some seriously worried
people inside Oracle towers in California. When talking to
Oracle executives, the message that's being put across is
that customers are evaluating the 11i applications and are
beginning to come on board. Hmmm, well maybe they are, but
they're taking an incredibly long time about it.

The problems with 11i have been pretty well documented, but
the underlying problem seems to me to be less to do with
buggy early versions but rather more with being in the
right place at the wrong time. If 11i had been released at
the height of the dot com boom, then things might have been
different. But it was released at the end of the boom and is
tarred with the internet-only brush that was once sexy, but
is now scary.

Personally I think 11i – and indeed the whole Oracle
internet strategy – makes a lot of sense theoretically. But
it's a bit like communism – fine, until the people factor
gets built into the equation, then it gets complicated. How
many IT directors are willing to go to their board of
directors and recommend an internet-only strategy in 2002?
Or come to that, in 2003…?
The other interesting problem the company has, is one
that's been raised by a few industry analysts in recent
weeks and that is the question of who's riding side saddle
to Ellison? Oracle has been in trouble before, but on each
occasion there was someone sitting alongside Ellison who
was able to take the actions that were necessary to restore
the balance.

Ellison is without doubt brilliant, a fantastically
charismatic business man, a great leader of the company and
an industry visionary whose ideas are able to set entire
market agendas. Wall Street knows that, but every
indication is that it wants to know that there's a counter
balance to his excesses. When Oracle nearly imploded in the
early 90s, there was the robust form of Geoff Squire to do
the dirty work that needed to be done, whilst in the mid
90s the presence of the hugely respected Ray Lane was crucial.

But since Lane was ousted a few years ago, there has been
no-one to act as that all important counter-balance. The
next best hope was Gary Bloom, but he decamped to
Veritas a couple of years ago, seeming to tire of forever
being the heir apparent. CFO Jeff Henley is a good fellow
and a safe pair of hands, but no-one seriously sees him
as a contender for the top seat. The other two most senior
figures are - marketing director Mark Jarvis and the
mysterious, seldom seen Safra Katz – neither of them in the
Lane mould.

So Ellison's declaration this week that there are still no
plans to appoint a replacement to Lane as chief operating
officer might come back to haunt him. I suspect Wall Street
would have reacted positively to such an appointment,
assuming of course that a suitably heavy hitter could be
persuaded to take on the role. Maybe that's the problem? Is
it more the case that there's no-one suitable who'd want
the job?

It's not all gloom and doom of course. The company is
scoring some nice contract wins, such as the NHS human
resources deployment, the biggest of its kind in Europe. The
applications server space has been performing well enough,
although Sun's decision to bundle iPlanet application
server software within Solaris could impact on that before
long.

Ellison's been in China this week, where he seems to have
enjoyed a respite from the events in the US, pointedly
remarking that it's nice to be in a country which is
business friendly as opposed, he said, to California
where "businessmen are definitely not heroes". Clearly one
of the scars of the state inquiry has been a blow to his
ego – which in private is surprisingly fragile for someone
who seems so brash in public.

Share this content

Replies

Please login or register to join the discussion.

avatar
By admin
27th Jun 2002 15:51

...let's not forget Oracle created this mess for itself. No-one forced them to abandon client server computing, no-one made Larry get rid of sound business managers like Ray Lane and no-one made them cut deals like the one in California.

And if anyone thinks that Oracle has stopped selling client server software, they should simply stand firm with their salesman. They crack at a very early stage I find.

Thanks (0)
avatar
By admin
25th Jun 2002 07:39

My company looked at 11i and found it to be horrendously bug ridden. We then checked out a later release and it was better, but the heavy handed sales tactics of the Oracle staff who were positively slavering to close the deal was off-putting. Oh and anyone who believes the claims that Oracle works to a single global price list...I have a slice of real estate on the dark side of the moon that I can sell you...


Thanks (0)
avatar
By admin
24th Jun 2002 18:07

Your article is an accurate and balanced view of Oracle right now! Except, I don't believe that IT Director's are going to their board's right now to justify R11i adoption on the grounds of it's an internet-only strategy!

Oracle e-business suite is maturing and large enterprises like Vodafone, Alliance & Leicester and Telia are implementing the current version because the core modules work effectively - Financials, HR, Supply Chain - and now they are being 'fully' integrated with CRM, procurement and self service modules. Integrated is the 'key word' No third party 'best of breed' packages or special interfaces but real integration. The above organisations can now view customers and products across the organisation whether it be country or region centric.

The internet architecture allows easy access into R11i e-business suite.

Colin Grace

Praktis

'The only 100% focused Oracle e-business suite partner'

Thanks (0)
avatar
By admin
24th Jun 2002 18:07

Your article is an accurate and balanced view of Oracle right now! Except, I don't believe that IT Director's are going to their board's right now to justify R11i adoption on the grounds of it's an internet-only strategy!

Oracle e-business suite is maturing and large enterprises like Vodafone, Alliance & Leicester and Telia are implementing the current version because the core modules work effectively - Financials, HR, Supply Chain - and now they are being 'fully' integrated with CRM, procurement and self service modules. Integrated is the 'key word' No third party 'best of breed' packages or special interfaces but real integration. The above organisations can now view customers and products across the organisation whether it be country or region centric.

The internet architecture allows easy access into R11i e-business suite.

Colin Grace

Praktis

'The only 100% focused Oracle e-business suite partner'

Thanks (0)
avatar
By admin
25th Jun 2002 07:39

My company looked at 11i and found it to be horrendously bug ridden. We then checked out a later release and it was better, but the heavy handed sales tactics of the Oracle staff who were positively slavering to close the deal was off-putting. Oh and anyone who believes the claims that Oracle works to a single global price list...I have a slice of real estate on the dark side of the moon that I can sell you...


Thanks (0)