Larry Ellison

Pressure builds for Oracle to sell MySQL

It seems like some people just don’t want Oracle to own MySQL.

Right on the heels of Oracle chairman Larry Ellison’s pledge to aggressively support Sun’s MySQL database at OpenWorld last week, Michael “Monty” Widenius, MySQL’s creator says Oracle should sell the open source database to a third party thereby resolving the antitrust concerns of the European Union (EU).

The EU’s objections are focused on Oracle, the leader in proprietary databases, gaining possession of MySQL, the leading open source database, and the competitive ramifications that sort of dominance will have on European markets.

In his blog Widenius wrote that MySQL needs a different home other than Oracle “where there would be no conflicts of interest concerning how, or if, MySQL should be developed further.”

Both Ellison and Sun co-founder Scott McNealy in their OpenWorld keynotes pointed to examples of Oracle’s track record when it comes to owning open source products, most notably the Sleepycat database. McNealy said he believes Ellison will carry through on his promise to bring MySQL greater success adding that the product represents no threat to Oracle’s flagship database and that it is a natural competitor to and an offering from a common enemy - Microsoft.

“MySQL is the leading open source, low-end database. Larry says it will not compete with Oracle or DB2 but with Microsoft so he has every reason to want it to succeed,” McNealy said.

Even Widenius’ former partner and co-founder of MySQL, Marten Mickos has contacted Nellie Kroes, the EU’s Competition Commissioner, advising her to approve the acquisition in the face of Sun’s dwindling market share and financial fortunes.

Ellison last month said Sun is losing some $100 million a month, and if the EU’s investigation goes all the way to the January 19 deadline, that could mean another $300 million in losses, along with God knows how many more points of lost market share to IBM and HP in the server hardware business. As I have said before, I don’t understand why the EU doesn’t understand there is little danger to limiting user choice or in Oracle trying to control pricing by approving the deal. I mean, there are no pricing issues — MySQL is free.

Just late yesterday Sun said it planned to cut 3,000 jobs over the next year, although some of those jobs could be related to redundancies with Oracle personnel as the company readies itself for the expected merger. Still, some of those layoffs have to be related to Sun’s poor performance since early this year.

The rub here is finding a “suitable” third party to take over ownership of MySQL. It certainly can’t be sold to IBM, SAP, Hewlett-Packard or any other major competitor of either Oracle or Sun without the strong objections of Mr. Ellison and certain government agencies.

Microsoft? They should be interested in the idea, since Oracle could well use MySQL to compete against SQL Server in the lower end markets. They could take a weapon out of Larry’s hands. But I doubt they are ready for such an aggressive move into the open source world.

Leading open source companies Red Hat and Novell would give serious consideration to buying it, but will they ever get the chance? Highly unlikely, but it’s an outside possibility.

Widenius, by the way, left MySQL a while ago to form his own company, Monty Program AB which is working on a branch of MySQL called MariaDB. I assume he doesn’t have any interest in marshaling an effort to take his old product back.

No, (and I can barely believe I am saying this) the best option here for everyone concerned is that the EU show some faith and trust that Oracle will do what it says it will do. If Oracle doesn’t follow through and abuses its monopoly position in the database market, Oracle will be the biggest loser because customers and their dollars will migrate to a more trustworthy competitor.

Ellison commits to the hardware business

Larry Ellison was adamant in his keynote Sunday night that Oracle would not be selling any part of Sun’s hardware business, saying “there are limits to what you can do if you do just software.” Hear what else the Oracle CEO had to say about the future of Solaris, SPARC and MySQL:

The real Top 10 from the Ellison-McNealy keynote

How does Sun Microsystems Chairman and Co-Founder Scott McNealy feel about Oracle buying his company?

It was clear in his keynote Sunday night that McNealy won’t have an easy time handing over his business — he called “going to work every day with my employees” the innovation he was most proud of — but the Sun head also seemed to have no reservations about the man he was handing it over to, calling Oracle CEO Larry Ellison “my hero.”

But before Ellison took the stage, McNealy gave the thousands in the audience two of his famous top 10 lists — “The top 10 signs that engineers have gone wild” and “The top 10 innovations from Sun.”  While McNealy did talk seriously about the future of Sun innovation, he also enjoyed poking light fun at Sun engineers, Oracle’s marketing team and even Ellison himself. When Ellison took the stage (so McNealy could reassure the audience he was “not making up” his optimistic outlook for Sun), he had plenty of his own IBM jokes, but also did not seem to want anyone to take his ‘we’re in it to win it’ message lightly.

Here’s our own top 10 list of the most memorable moments, quotes and quips from Scott and Larry’s keynote:

10.) McNealy says that #1 of ‘The top 10 signs that engineers have gone wild’ is that “someone came up with this crazy idea for a ‘Java Ring.’”

9.) Ellison puts his money where his mouth is when he claims that Sun runs Oracle twice as fast as IBM’s fastest computer:  He challenges any company to take a database application, and if it can’t run twice as fast as IBM, Oracle will give them $10 million. IBM is welcome to enter.

8.) McNealy jokes that the Oracle marketing team might have to come up with a better statement about the future of Java than “Java speaks for itself.” However, he does seem confident that Oracle will continue to innovate with SPARC and Solaris, saying that Oracle will spend more on these technologies than Sun did.

7.) McNealy on Ellison and Sun hardware: “I think Larry’s going to like his new toy.”

6.) ‘Father of Java’ James Gosling takes the stage to speak about the future of Java with Oracle, saying he thinks Oracle is committed to continuing to develop it.

5.) McNealy reassures the audience that MySQL is not going anywhere, pointing out that it competes with Microsoft SQL Server, not Oracle. Ellison later reiterates this, saying Oracle will spend more on MySQL than Sun.

4.) Ellison continually praises Sun, saying he is “very proud to be working with Sun to make sure all Oracle software runs better and faster on Solaris.”  He also praises Apple, saying that “they’ve done a terrific job of tackling the hardware problem with the software problem,” and thinks the combination of Oracle and Sun can do the same to “compete successfully against The Giant.”

3.) Oracle introduces a new storage product, the F5100 FlashFire Storage Array, which integrates flash and disk; Oracle claims its throughput and response time is four times faster.

2.) Ellison continues his attack on IBM and talks unapologetically about the ‘Oracle + Sun is Faster’ ad that the software giant was recently fined for. He said that IBM’s plan to “sunset” Oracle by stealing away Sun customers is not going to work: “Depending where you are on earth, one man’s sunset is another man’s sunrise.”

1.) McNealy’s last (and arguably most important) statement, telling the audience to enjoy Oracle OpenWorld: “Drinks are on Larry!”

What did you think of the Ellison-McNealy keynote and their claims?

At Oracle the buck stops at Larry’s desk

It looks like Oracle CEO Larry Ellison - the outspoken, yacht-owning, top-paid CEO billionare - will soon be the newest member of an exclusive club.

But is this a club he really wants to belong to?

Probably not, because as a member of the $1 per year CEO club, Ellison will be taking a pay cut of $999,999 in Oracle’s fiscal 2010, which began June 1.  The fourth richest man in the world received a $1 million salary in fiscal 2009; however, this only accounted for 1.2 % of his total compensation, according to an article in CNET.

So, with 97% of Ellison’s income coming from stock, this may be more of a symbolic gesture. But is it also a sign of how the recession is affecting Oracle?

According to the Wall Street Journal’s take on Ellison’s pay cut, yes.  The WSJ points out that Oracle CEO Jeff Epstein is the only one of the company’s executives to finish fiscal 2009 “above the money,” having a paper value above his issue price.

Ellison is in good company, however. Who else has been or is a part of the $1 salary CEO club? Here are some notable executives:

Steve Jobs:  The Apple CEO, who owns 5.5 million shares of Apple stock, has been bringing home a $1 salary since 1997. But Jobs’ salary seems to have had little effect over his wealth in the past decade, as he’s made millions in stocks and accepted large gifts from company executives, such as a $90 million Gulfstream V jet in 2000.

Larry Page, Sergey Brin and Eric Schmidt: The top three Google executives have been receiving $1 salaries since 2004.  Schmidt also received no salary or stock for his recent service on Apple’s board of directors, though he did accept $8,700 of Apple gear and a $7,500 “commemorative gift,” according to Business Week.

John Mackey: The CEO and Co-founder of Whole Foods wrote a letter to his employees in November 2006, announcing that his salary would be reduced to a $1, he would no longer receive any other cash compensation, and Whole Foods would donate future stock options he would be eligible for to two company foundations. In his letter, Mackey also wrote:

“I am now 53 years old, and I have reached a place in my life where I no longer want to work for money, but simply for the joy of the work itself and to better answer the call to service that I feel so clearly in my own heart.”

If we hear a similar sentiment expressed by Larry about how he is in it now only for the joy of creating great database software, we’ll be sure to create a whole special report around that news.

Larry’s a hardware man now

After weeks of speculation about whether Oracle would keep or sell off Sun’s hardware business, we have the answer. Well, the answer for now.

In an e-mail interview with Reuters, Oracle CEO Larry Ellison made it clear he intends to keep not just Sun’s chip and server products but its disk storage and tape backup businesses too. So with one short interview Ellison has confirmed he will attempt to significantly change the competitive landscape among major vendors competing for the billions of enterprise dollars at stake.

And he is not lacking for confidence about his chances. In the Reuters interview Ellison said he has the in-house talent — both from among Sun and Oracle engineers - to compete successfully against the likes of hardware giants including IBM, Hewlett Packard and Dell.

“We have lots of hardware experience inside of Oracle. Hundreds of Oracle’s engineers came from systems companies like IBM and HP. Even I started my Silicon Valley career working for a hardware company that worked with Fujitsu to design and build the first IBM compatible mainframe,” Ellison said in the Reuters interview.

I am not sure how much of Larry’s own hardware experience will successfully translate to competing against The Big Three in a cutthroat low margin business. I suspect it will have more to do with retaining key Sun engineers and their managers working on key hardware technologies. But you have to like his optimism here.

It could very well be that Oracle has no intention of engaging in hand-to-hand combat with his major competitors in the low end, Intel-based server market. According to his comments in the Reuters interview, he intends to invest heavily in Sun’s Sparc- and Solaris-based servers where margins would be significantly higher.

“Once we own Sun we’re going to increase the investment in SPARC. We think designing our own chips is very, very important. Right now, SPARC chips do some things better than Intel chips and vice-versa. While most hardware businesses are low-margin, companies like Apple and Cisco enjoy very high-margins because they do a good job of designing their hardware and software to work together. If a company designs both hardware and software, it can build much better systems than if they only design the software,” Ellison said.

Yup, that’s right. Apple is a model, if not the inspiration, for Ellison believing he can deliver high margins servers if he can form fit Oracle’s software with Sun’s chips and servers ala Apple’s iPhone and iPod.

There may be at least a little concrete evidence to back up his ambitions. Oracle’s Exadata database machine, which tightly couples Oracle’s flagship database with HP’s server hardware, has received good reviews, particularly for its speed and performance.  It must be noted however, that the Exadata server uses Intel chips, and not RISC-based chips such as Sun’s SPARC processor.

Both Ellison, in the Reuters interview, and Oracle President Charles Phillips at last week’s Collaborate conference, said Exadata was the most successful product launch in the company’s 30-plus-year history. Oracle, of course, declines to release sales figures for the system, so there can be no iron-clad confirmation of this.

But if Oracle successfully applies its Exadata model to other server hardware-software combinations, perhaps targeting each offering at a specific vertical market, it may not only succeed in the market but also lay down the law for how server bundles will be sold.

There are a couple of unanswered questions remaining, of course. One, is if Oracle proceeds with its plans to sell SPARC-based servers bundled with its software, where does this leave HP?  HP still competes with Sun in some segments of the server market, and may not take too kindly to Ellison’s aggressive commitment to SPARC.

Second, how will Ellison deliver bundled combinations of servers to Oracle and Sun customers?  If he intends to focus on complete solutions using only Oracle-Sun chips, servers, operating systems, databases, middleware, and tools, the emphasis would seem to be on largely selling  these systems direct.  If he does an end run around the resellers, will this drive the channel into the arms of IBM, HP, and Dell that can reach customers across a greater number of markets?

We may not get these questions answered for another few months. But I’ll say this, with the Sun acquisition Larry has brought back some of the fun and excitement that has been missing from this market for some time now.

Oracle still interested in planes, trains and automobiles

As the owner of one of the world’s largest yachts and an avid racer, Oracle CEO Larry Ellison can probably handle his boat in just about any fleet.

Now, his company has released an application to help its customers do the same — in a slightly different way. Oracle Fleet Management, a component of Oracle’s newly released Oracle Transportation Management 6.0, will help users manage fleet and common carrier networks through a single platform. The tool can be used for all kinds of private fleets, including trucks, trailers and ocean freighters.

Oracle Transportation Management 6.0, announced Tuesday, is the latest update to Oracle’s global transformation management system. Oracle Transportation Management, part of the Oracle E-Business Suite, integrates and streamlines transportation planning, execution, payment and process automation in a single application across all modes of transportation, according to Oracle.

In the first major update to the management system in nearly three years, version 6.0 allows users  to manage transportation by third parties.  In an eWeek article, Derek Gittoes, vice president of Logistics Product Strategy for Oracle, says that manufacturers will be able to manage both their own drivers and those of third-party fleets  reportedly a first in the commercial software market. This release is also reportedly the first in the industry that combines shipment and asset-centric transportation solutions.

But will customers want to invest in this technology in the down economy?

According to Oracle, version 6.0 should actually help customers save on transportation and fleet management costs. The tools will reduce fuel costs, support sustainability, and measure and control financial performance, according to the company.

This isn’t the first time  Oracle has used the recession to invest in niche markets or offer enterprise businesses cost effective solutions. In February, for example, it released two new risk management applications, which Oracle believes will prove  cost effective for users  in the down economy. The software giant also continues to invest in eSourcing tools — including its newly released Oracle Sourcing on Demand — which helps  IT shops to save money by negotiating online with suppliers.

How has the recession affected your Oracle-related spending? Have you been able to take advantage of any of these supposedly cost effective tools?

Recession or no, the high seas still call to Ellison and his yachts

The recession — which, unfortunately, includes the need to downsize — has been on everyone’s minds these days. So, while Oracle professionals scramble to cut hardware costs and keep their jobs, what about the man who’s in charge of it all?

Oracle CEO Larry Ellison made plans to downsize before the recession even began — though not quite in the same way or for the same reasons.

Ellison supposedly has a new yacht in production that is set to be finished sometime after 2010. But why does the billionaire, who already owns a 454-foot, five-story, 82-room yacht (called the Rising Sun) need another one?

According to Ellison, the Rising Sun is impractical, too big, and “lacks intimate space.”

“Too big” may be an understatement. While on a recent cruise, SearchSAP.com News Editor Courtney Bjorlin saw the Rising Sun for herself, when the boat was docked on the island of St. Thomas. This is the picture she took:

As you can see, this is one of the largest yachts in the world. But it’s also not Ellison’s first. Oracle’s CEO has been in the yacht business for quite some time, and consequently has some interesting stories. Here are a couple:

• Ellison has claimed that SAP co-founder Hasso Plattner mooned him and his crew during the 1996 Kenwood Cup off Hawaii. Plattner went on the record in Sailing World in 2003, saying he “never mooned Larry Ellison.” However, even though he says the act wasn’t direct at Ellison specifically, he did admit that he “lowered his pants” when his boat was having serious trouble and Ellison’s boat, the 80-foot Sayonara, failed to help.
• In 1998, Ellison had a near-death experience on the Sayonara. During the 1998 Sydney to Hobart Yacht Race in Australia, a typhoon struck, bringing 40-foot high waves. Six sailors from other boats died, but the Sayonara crew managed nothing worse than broken bones. Ellison told Business Week they “certainly thought it was possible we wouldn’t make it.” But Sayonara did more than “make it” — it won the race.

Despite the recession and its subsequent layoffs, it still appears difficult to be a billionaire playboy.