The Oracle’s Tale

          In an era where so many firm’s corporate strategy and value propositions focus on data, it is only fitting that I should delve into one of the first pioneers of the database. This post will go into the history of Oracle to describe how it became the company it is today, set the stage for my presentation this Wednesday, and prepare us for next week’s visit.

Foundations and Early Beginnings0

          In 1970, Larry Ellison, a young computer programmer who recently dropped out of college for the second time, read a paper published by IBM that documented an interesting new programming language called SQL. Ellison saw the potential in this new language, which provided an innovative way for people to search through databases, and reached out to his boss creating a database using the language. In 1977, Larry Ellison, his boss Robert Miner, Ed Oates, and Bruce Scott co-founded Software Development Laboratories (later renamed Oracle after their partnership with the CIA who dubbed them “Project Oracle) with the intention of creating an innovative way for companies to digitally view and manage their data. Together, they launched the first commercial “relational database management system” and saw tremendous success by becoming the “behind the scenes” database company that not everybody had heard about, but everybody used on a daily basis. Today, A whopping 97% of the fortune 100 companies and the majority governments worldwide use Oracle for their database services. Founder and former CEO Larry Ellison said “If you live today, you use Oracle.”

Current Offerings and Products

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         Recently, Oracle has been a late mover into the Cloud-backed database storage industry, into which I will dive much deeper during my presentation on Wednesday. However, I could not make a summary of Oracle without mentioning their main product offerings. Despite Amazon’s current dominance in the cloud industry, Oracle does have one massive advantage over its main competitor. Oracle has the immense breadth of its extremely intertwined portfolio within the technology industry. If Oracle can successfully bundle all the fantastic products and services into one high performance cloud package, the switching costs could be low enough for Oracle to gain substantial market share. Oracle announced in its recent shareholder meeting that it would pledge a massive investment into its cloud products and make the “only cloud you would ever need to run your organization”. Dave Donatelli, Oracle’s Executive Vice President of Worldwide Sales and Marketing Strategy for the Oracle Cloud, announced that Oracle Cloud will introduction automated technology to run self-repairs on the cloud among other speed, size, and security improvements to create “one cloud to rule them all”. Oh, and by the way, Dave is a BC graduate and will be the person that we are scheduled to meet with at Oracle. No pressure guys!!

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Here is a video of Dave speaking at their shareholder meeting:

Oracle’s Business Philosophy and Troubles

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         Much of Oracle’s success can be directly attributed to Larry Ellison’s uber-competitive, win-at-all costs mentality. Scott Feigin, who was the 5th employee to work at Oracle, once said: “if you want to compete against Larry, you better be prepared to be completely crushed.” His competitive nature gave him the nick-name of the Samurai of Silicon Valley and created a few legendary stories along the way, such as publicly admitting to hiring private investigators to go through Microsoft’s trash.

       Although it did help the company grow into the juggernaut it is today, it was not without some legal issues along the way. The Depart of Justice has previously sued Oracle for violating anti-trust laws for attempting to buy PeopleSoft, major competitor in the database industry. In typical Larry Ellison fashion, he managed to beat the federal government in its own game in court and was reward in over $1 billion in damages from the government. At other times, Oracle has not been so victorious. They have recently been sued by the Department of Labor for favoring white men for high wages and is currently still facing that legal battle. Additionally, Oracle has been sued by previous female engineers on the basis of wage discrimination based on gender. In the midst of all of this, the board at Oracle asked for shareholders to vote against a proposed report on internal gender wage gaps.  Oracle declared the lawsuit as “baseless”, but it will be interesting to see how these lawsuits end nonetheless.

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Conclusion

       Oracle is a fascinating company that, admittedly, I did not know too much about before starting my research for TechTrek. They are a company that solved the largest logistical database problem at the start of the technology age. As other major tech companies became massive giants, Oracle grew right with them and provided them with exceptional database solutions that helped optimize internal efficiency. Although they have a storied past, the future still holds much in front of them. As a database firm, it is concerning how late they have entered the Cloud database market. However, I do believe that since Oracle is already so interconnected to major firms, solid products should keep switching costs low enough for them to gain respectable market share. I cannot wait to dive into more of the specifics in class on Wednesday!

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If I were to ask the board at Oracle a few questions, it would be:

-Why the late entry to Cloud industry, despite all the infrastructure that would have make them dominate everyone from the beginning?

– If/how does the corporate culture at Oracle reflect Larry Ellison’s mindset?

-What steps would you need necessary for Oracle to take in order to flip the market share in the cloud industry?

Sources:

https://arstechnica.com/tech-policy/2017/10/female-ex-oracle-engineers-sue-for-gender-discrimination/

https://www.sdxcentral.com/articles/news/oracle-promises-one-cloud-to-rule-them-all/2017/10/

https://en.wikipedia.org/wiki/Oracle_Corporation

Oracle to expand automation capabilities across developer cloud services

 

 

10 thoughts on “The Oracle’s Tale

  1. Awesome intro post to set up your presentation, Jake! In class thus far, we have barely mentioned Oracle so I am glad we will be covering them this week. In Database Systems and Analysis, a required class for Information Systems concentrators, you learn a lot about RDBMS. While a bit complicated to explain in this comment, they essentially organize data in the simplest way possible. After taking the class, I am baffled as to why some companies still use Excel Spreadsheets to store data. Additionally, Ellison sounds like quite the fearless leader. Hopefully, Dave has some time to tell us a few funny stories about him.

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  2. Jake, great work and looking forward to your presentation tomorrow! I think it’s really easy to not know what is so good about Oracle as an average person since the firm mainly provides B2B services, very comparable to Salesforce in this way. I had literally no idea what Oracle even did until taking Database Systems & Applications for my Information Systems concentration this semester. An important thing to note about SQL is that it is rarely used to create data; rather, SQL is used to update and manipulate data into meaningful tables for enhanced understanding and data-driven decision making in businesses. We have seen as a common theme throughout all the companies we have studied that those companies with a lot of data about their customers succeed, so Oracle is a crucial tool in business! Like you said, 97% of Fortune 100 companies use it – and I am not surprised based on what I have learned so far in my Databases class.

    I really appreciated your thorough background about Larry Ellison in this post. He’s an influential person in technology, and has inspired the leaders of many companies, including the CEO of Salesforce Benioff. I can’t wait to witness firsthand the corporate culture that Ellison instilled into his employees from the beginning!

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  3. First of all, I love that Larry Ellison dropped out of college twice, because starting a successful business after dropping out of college once is too mainstream these days. I agree it would be cool to find out if Larry’s competitive nature has an impact on company culture.

    I am very interested in the automated self-repairs to the cloud database. I wonder if these offerings will help Oracle recover from being a relatively late participator in the cloud database industry. Nice post, look forward to your presentation!

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  4. Great post, Jake! I’ve always heard about Oracle, but never bothered to research them before this class started. It is amazing to think that they are responsible for the efficiency and profitability of so many companies today. Larry Ellison’s approach to business really reminds me of Uber when it was run by Travis Kalanick, but I feel like that competitive nature is essential to be the best at anything (e.g. Michael Jordan, Kobe Bryant).

    Also, I already have a weak understanding of cloud computing in general, so I think it is crazy that Oracle is able to develop a cloud that “repairs itself”. Looking forward to your presentation!

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  5. Thank you for writing this, Jake! I can’t believe I’ve never read more about Oracle. I always recognized how important a company they were, but never really knew how they operated. Your mention of it being the only cloud a company could ever need sounds both exciting and intimidating. If Oracle makes this huge cloud bundle with all the services a company already relies on, I wonder if they will run into monopoly issues and if the government will intervene again. Interesting to see how this plays out – whether or not development and innovation clashes against competition and legality.

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  6. Great post Jake! It’s incredible to think that any company can try to compete against Amazon, but you’re definitely right about Oracle’s technological breadth advantage. It truly has a huge portfolio that is intertwined with the technology industry. I also think it’s amazing that Oracle is the number DBMS! I’m interested in learning what strategies the company implements in order to maintain its leading position in the cloud services industry. Excited to hear your presentation!

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  7. Great post. Looking forward to the presentation. When you think of Silicon Valley, you typicaly think of the newer companies like FB, Google, Apple, but you often forget that there are these business-facing behemoths out there as well (Oracle, Salesforce) that are also a critical part of the ecosystem.

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  8. Great post, Jake! Between this and your presentation, I think you did an awesome job laying out Oracle and the value that it brings to other companies. I found their double firewall that you mentioned to be very interesting in particular, as security is becoming increasingly important for the various tech companies.

    The section on Oracle’s legal battles also really connects to my recent blog post on AT&T: the company was recently sued by the DOJ after attempting to buy Time Warner, primarily for the same antitrust violations as Oracle. With that said, I thought it was really cool to see another company undergo that process, and hopefully AT&T can have the same level of success! Nice job again.

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  9. With a market cap of $200B, this Sequoia Capital investment really looks like it’s paid off! Mostly Oracle is known for being slow to adapt and purchasing their competitors outright. We’ll see what the future has in store, as companies like Salesforce have starting poking cracks in the giant’s armor and without the leadership of Larry who stepped down a few years ago [probably to spend some more time on his private Hawaii island and in court-side seats at the Oracle Arena headlining Golden State Warriors :)], we’ll see if Oracle is going to be able to maintain it’s competitive advantage (having Oracle software already installed in every important company).

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  10. Awesome post Jake! You did a great job providing a story to such a large, important company. Reading about Larry Ellison was interesting. I didn’t realize how competitive he is and the extents to which he takes things. I am curious how his attitude is reflected in Oracle’s company culture and what affect that has on internal operations.

    As mentioned above, it’s shocking how late Oracle is to the cloud game, but I do believe that when you are as huge and widely-used as Oracle is, you have some leeway on how immediately reactive you need to be.
    Thanks for writing this!

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