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On Sept. 18, Larry Ellison stepped down from his position as CEO of Oracle, the company he founded and has helmed for the past 37 years. Since then, speculation has been rampant as to what this means for the software giant. Ellison's right-hand people, Safra Catz and Mark Hurd, are stepping up as co-CEOs and Ellison is continuing his work with Oracle as CTO and executive chairman of the board. So, how much has really changed?
John Rymer, vice president and principal analyst at Forrester Research Inc., is the first author on the report "Quick Take: Is Ellison Really Stepping Down?" His answer is that how much anything has changed at Oracle depends on whether you look at the short term or the long term. In the short term, he said that all that has changed are the titles. Ellison, Catz and Hurd have been running Oracle together for years. In the long term, he said, "Larry Ellison is going to choose a successor."
While Rymer sees Catz and Hurd taking on a more prominent role in the near future, he doesn't believe much will change. The same four people -- Ellison, Catz, Hurd and Vice Chairman Jeffrey Henley -- will remain in charge with little change to their respective responsibilities. But Rymer believes that in approximately 10 years Ellison is going to leave Oracle with a new leader. "I just look at the age of Henley and Larry Ellison -- 70 years old," he said. "You're not going to live forever."
John Rymervice president and principal analyst, Forrester
Rich Niemiec, president of Rolta's Americas practice and Oracle Ace Director, agrees that there won't be any radical changes at Oracle anytime soon. He said, "Having the musketeers [Ellison, Catz and Hurd] together is just the next phase for Oracle." Instead, Niemiec thinks that Ellison is returning to his roots. He said, "He [Ellison] is focusing primarily on the technology. He's letting go of some of operations, which is what he's always done." He added that Ellison stepping down from the position of CEO but remaining at Oracle "provides a smoother succession plan." However, he said, "I personally don't think he [Ellison] will ever retire. He's 'retired' to become chairman and CTO."
Rymer speculated as to who Ellison's successor might be. Hurd and Catz he described as "operations people" when Oracle will need a visionary. The other options he sees inside Oracle are Thomas Kurian, executive vice president for product development, and John Fowler, executive vice president of systems. However, Rymer sees them as operations people as well, not visionaries. Rymer concluded that the most likely candidate to be Ellison's successor is someone from outside Oracle.
Does Oracle need a better vision?
Niemiec pointed out that Ellison has been chairman of the board at Oracle in the past and is still working full time for Oracle. "The fact that he [Ellison] is moving to this [the position of CTO] means he's going to be taking more time with technology. The fact that he's going to be working full time means that he's not going to slow it down. He's going to accelerate the technology."
Rich Niemiecpresident, Rolta's Americas practice
While Niemiec felt that Ellison was leaving Oracle in a good place when he stepped down, Rymer said, "Oracle is struggling." He explained that, like other big software companies, Oracle faces significant changes. Oracle's idea that software installed in data centers is where the money comes from is, according to Rymer, being challenged. "It's a technology transition and a business transition, and the business transition is the hard one," he said. "The business model is where the pain is."
According to Rymer, cloud has changed, and Oracle isn't keeping up with the changes in the market and shows no signs of being willing to make the necessary big changes. "They didn't make any changes in leadership," he said. While Ellison is no longer CEO, the same people are still in charge of Oracle. According to Rymer, the problem with Oracle's current plan is over-focusing on big contracts and big deals, rather than thinking about overall cloud adoption and making technology more flexible and suitable for the cloud. Rymer said, "There is nothing in this move that says they [Ellison, Catz and Hurd] are going to make an about-face on this plan. For now it looks like they think the execution is the problem, not the plan. I actually think they are hoping to get more out of better execution of the plan, not changing the plan."
In contrast, Niemiec sees a great deal of benefit to Ellison's methodology and Ellison refocusing on Oracle technology. He thinks it's possible that Ellison chose now to step down because "maybe what he sees is the acceleration in the industry." Niemiec cited big data and the Internet of Things as potential interests for Ellison as CTO. "At the end of the day," he said, "Larry creates the new direction. He's not looking for the bend in the road. He creates it."
Rymer said, "It looks like the changes in the cloud are just so big they require a change in strategy. I think that means a change in business model. Ultimately they [Ellison, Katz and Hurd] have to adapt to these new realities."
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