Larry Ellison Might Have Unfinished Business with Microsoft

Within moments of last week's news that Larry Ellison has stepped down as Oracle's CEO to become CTO, social media lit up. Reaction such as "whoa!" and "wow!" preceded every tweet or Facebook post. In reality, it seemed like a superficial change in titles.

For all intents and purposes, the new CEOs, Mark Hurd and Safra Catz, were already running the company, while Ellison had final say in technical strategy. Hence it's primarily business as usual with some new formalities in place. Could it be a precursor to some bombshell in the coming days and weeks? We'll see but there's nothing obvious to suggest that.

It seems more likely Ellison will fade away from Oracle over time, rather than have a ceremonial departure like Bill Gates did when he left Microsoft in 2008. Don't be surprised if Ellison spends a lot more time on his yacht and on Lanai, the small island he bought in 2012 near Hawaii that he is seeking to make  "the first economically viable, 100 percent green community," as reported by The New  York Times Magazine this week.

For now, Hurd told The Times that "Larry's not going anywhere." In fact Hurd hinted despite incurring his wrath on SAP and Salesforce.com over the past decade, Ellison may revisit his old rivalry with Microsoft, where he and Scott McNealy, onetime CEO of Sun Microsystems (ironically now a part of Oracle), fought hard and tirelessly to end Microsoft's Windows PC dominance. They did so in lots of public speeches, lawsuits and a strong effort to displace traditional PCs with their network computers, which were ahead of their time. Ellison also did his part in helping spawn the Linux server movement by bringing new versions of the Oracle database on the open source platform first, and only much later on Windows Server.

While Oracle has fiercely competed with Microsoft in the database market and the Java versus .NET battle over the past decade, with little left to fight about, Ellison largely focused his ire on IBM, Salesforce and SAP.  Nevertheless Oracle's agreement with Microsoft last year to support native Java and the Oracle database and virtual machines on the Microsoft Azure public cloud was intriguing  as it was such an unlikely move at one time.

Now it appears Ellison, who years ago mocked cloud computing, has Azure envy due to it having one of the more built-out PaaS portfolios. Hurd told The Times Oracle is readying its own platform as a service (PaaS) that will compete with Azure that Ellison will reveal at next week's Oracle OpenWorld conference in San Francisco. Newly promoted CEO Hurd told The Times Ellison will announce a PaaS aimed at competing with the Azure PaaS and SQL Server in a keynote. Suggested (but not stated) was that Ellison will try to pitch it as optimized for Microsoft's .NET language.

Oracle's current pact with Microsoft is primarily focused on Azure's infrastructure-as-a-service (Iaas) offerings, not PaaS. Whether Oracle offers a serious alternative to running its wares on IaaS remains to be seen. If indeed Oracle aims to compete with Microsoft on the PaaS front, it's likely going to be an offering that will give existing Oracle customers an alternative cloud to customers who would never port their database and Java apps to Azure.

However Ellison positions this new offering, unless Oracle has covertly been building a few dozen datacenters globally that match the scale and capacity of Amazon, Azure, Google and Salesforce.com --which would set off a social media firestorm -- it's more likely to look like a better-late-than-never service well suited and awaited by many of Oracle's customers.

Posted by Jeffrey Schwartz on 09/24/2014 at 11:14 AM