Silicon Insider: Ellison Beelzebub

Has there ever been a more mercurial, demonic and inexplicably successful figure in high-tech history than Larry Ellison?

He seems like an overgrown adolescent, playing with his MIGs, yet he is the second richest man in America, his wealth self-made. Everyone complains about the quality of Oracle’s products, yet great companies continue to buy them.

His regular new technology announcements — remember the NC? The media server? — inevitably come to nothing … and yet I, like everyone else in tech, listen his latest announcement with the greatest seriousness and argue its merits for months afterwards.

Ellison is also a notoriously callous boss who has created a poisonously competitive environment at Oracle (as the saying goes in Silicon Valley, the first year you work at Oracle you think it’s the greatest job in the world, the second year you wonder what’s wrong with you; and the third year you go into therapy). Yet people fight to get work there.

He is also a notorious rake, with a very public lawsuit in his recent past, and appeared to treat Oracle as his personal harem (his fourth marriage was also announced this week). And yet, a few months ago, I sat at lunch with two of the most powerful women in Silicon Valley and high technology, and listened to them tell me that working for Larry Ellison was the single most exciting experience in their professional careers.

Why? “Because he’s brilliant. Because he takes risks every day. And because nobody on earth knows so much about relational databases — there’s so much you can learn from him.”

“Yeah, but he’s crazy,” I countered.

“Oh sure,” one of the eminent ladies replied, “But that’s part of the excitement too.”

Settling Question of Succession … Or Not

I was reminded of that conversation Monday when I read the announcement that Larry Ellison had stepped down as chairman of Oracle.

As with everything else Ellison does, it isn’t quite what it seems. In truth, Ellison is indeed stepping down as chairman, but remains as chief executive. The presidency of Oracle will be shared by two individuals, Safra Catz and Charles Phillips.

Although Oracle roundly denied it, this shuffling was seen by many outsiders as Ellison’s latest attempt to deal with the question of succession at Oracle. Succession is always a difficult problem at great entrepreneurial start-ups, typically because the companies become such extensions of their founder that he can’t bear to excise the extremity and the company can’t imagine life without him.

Succession became an issue at Oracle four years ago when two of Ellison’s likely successors, president Ray Lane and Executive Vice President Gary Bloomm, both quit within months of each other. In Lane’s case in particular, it didn’t seem to be an amicable parting. Wall Street worried.

Now Monday’s office reshuffling. Was Wall Street convinced? Apparently not: Oracle stock was unperturbed. Analysts didn’t fail to notice that Oracle’s new chairman, the company’s long-time chief financial officer Jeffrey Henley, is one of those rare instances in American industry in which a vice president jumps right to the chairmanship without ever passing through the CEO’s office.

How odd.

In Silicon Valley, Henley earned mostly sympathy for his promotion. As one Valley veteran told me over lunch, “How would you like to be the boss of a billionaire who also owns the company?”

A Throwback to the Robber Barons?

So what are we to make of all this? Honestly, I don’t really know. I suspect we can’t know — Larry Ellison is such a unique, protean character that he simply doesn’t really fit into any model for entrepreneurs or corporate CEOs we have.

People have said the same thing about Gates and Jobs, but I’ve always found them perfectly explicable. Ellison is another story — to find his like we probably have to cast back to the 19th century: to the so-called Robber Barons like Carnegie, Rockefeller and Gould. Not for their actions (though there are some parallels there too) but in their ability to construct, and then impose, their reality upon employees, customers and even competitors.

I’ve visited this reality on several occasions. Years ago, I was assigned by a computer magazine to write a story about how customers felt about Oracle’s products. I expected to write a simple, relatively positive story with a few concerns. What I got was endless spleen-venting by furious Oracle customers.

Having spent millions on Oracle database software, only to discover it fatally flawed, they now found themselves trapped in an endless cycle of upgrades, patches and re-fixes. They hated Oracle, yet they saw no escape.

I came away from the experience convinced that Oracle had no future, that its customers would bail out the moment they got the chance. I was wrong: after a few hesitations, the company again grew by leaps and bounds and Ellison only became richer.

When I first ran Forbes ASAP magazine, my editors and I used to walk across the lagoon to Oracle’s Emerald City of office towers and eat at one the company’s restaurants. The food was great, but the pressurized atmosphere of the place only underscored what I’d heard about working there. Experience told me that the inevitable outflow of human capital would eventually sap Oracle of its competitiveness. It didn’t.

Normal Rules of Business Life Don’t Apply

I watched as Ellison made one outrageous technology announcement after another, announcements that, in retrospect, were designed more to keep Oracle in the public eye than to produce real products.

If Andy Grove or John Chambers had made similar vaporware announcements, they would have lost all credibility. Not Larry.

Three years ago, I interviewed Ellison for a PBS television series. It was classic Larry Ellison: from Oracle's heavy-handed attempts to control the venue, to the guest arriving almost two hours late, even to Larry’s private food table in the green room.

During the interview, as Ellison played tough, cried, and alternated between business genius and superannuated adolescence, I found myself successively charmed, repelled, sympathetic and scared.

Every reporter’s instinct screamed at me that this man could not possibly be worth $25 billion, be the head of a giant corporation, or the trusted supplier of the world’s greatest institutions. And yet, he was all of those things.

Untarnished by Hostile Bid for PeopleSoft

Then, most recently, there was the incredibly ham-fisted and callous hostile takeover attempt of PeopleSoft.

Any other CEO might have soft-pedaled the deal, tried to welcome the employee/shareholders of PeopleSoft. Not Larry: he promised to fire them all and kill the company’s products.

Could any other CEO gotten away with this without being turned into a national pariah? Remember Chainsaw Al Dunlap?

But Ellison seems to have survived unscathed. If the take-over fails, as it appears likely to do, we’ll just look back on Ellison’s role in it and chuckle.

In other words, Larry Ellison has placed himself in a position where he is outside the normal rules of business and society, where traditional causality as we know it doesn’t apply. But, you might ask, isn’t he headed for a fall? No, probably not.

And how does he get away with it all? Because he wants to, because he’s smart and lucky and supremely focused. But most of all, because, like those estimable ladies told me that day at lunch, Larry Ellison just makes things so damn exciting.

Michael S. Malone, once called “the Boswell of Silicon Valley,” most recently was editor-at-large of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised.