Life Style

He's $45 billion wealthier than he was last year, but the world's second-richest man still relatively unknown to outside of database software circles. Not because he wants it that way--Ellison is incapable of staying out of the spotlight. Proudly admitted Oracle paid investigators who rooted through trash to dig up dirt on Microsoft. He described the dumpster-diving as a public service. "I feel very good about what we did." When not sparring with competitors, tussles with current, former employees.

His longtime lieutenant, Raymond Lane , left Oracle on summer 2000, reportedly after being banished to corporate gulag. Also on the outs with Larry: ex-Oracle salesman Thomas Siebel , whose company now competes with former employer for sales, staff, prestige. Sue if you want, Ellison taunts: "We have more lawyers than they have programmers." His predictions that the PC would vanish have fizzled, but Oracle stock has not, up 360% in a year; company's revenues up 15% while adjusted earnings up 62% in wake of cost-cutting measures. Likes toys, including Marchetti jet fighter and 78-foot yacht; just bought the boats and senior management of the AmericaOne sailing team with hopes of recapturing the America's Cup.

It is one of those golden, glowing autumn days when, despite all the traffic and hassle of the new Northern California, you understand why people still flock here and never leave. Some 20 miles south of San Francisco the hills are gilded by the setting sun. But down in the bayside flatlands of Redwood Shores, the source of the dappling light would seem to be the Emerald City, the glittering blue-green complex of office towers of the Oracle Corporation. Brilliant, dazzling Emerald City, the would-be center of the e-commerce universe.

Here, inside building 500 on the 11th floor, CEO Larry Ellison, sleek as ever in his $7,000 suit, glides into a spacious office. Paneled in warm, blond wood and with a panoramic view of the giant man-made lake on the company's campus, the office seems part inscrutable sanctuary, part New Age power statement. In other words, vintage Ellison. But it turns out that this isn't really Ellison's office. It's actually the former office of Ray Lane, Oracle's ex-president--and erstwhile heir apparent of Ellison. Given the contentious nature of Lane's departure, it seems a truly bizarre venue for a chat about the company's future. But maybe Ellison is sending a message: My underlings are as replaceable as furniture. No employee departure can harm the prospects of this company.

If there is such a message, it's quickly lost in the "dialogue" that follows. For nearly an hour the 56-year-old Ellison careens from one unexpected topic to the next: from Mother Teresa to Bismarck to the Sacramento Kings' star forward Chris Webber to the late Supreme Court Justice Louis Brandeis to country singer Faith Hill to Al Gore's and George W.'s SAT scores to relational databases. And then, finally, toward the end of his fascinating harangue, Ellison alights upon his glorious epiphany.

This big revelation, this strategy-changing moment, came to him in the fall of 1997 when Oracle was doing $5.7 billion a year in sales--about half of what it does now. Yes, Oracle had been immensely successful. Yes, its database software business was flourishing, in spite of Microsoft's big push to sell a much cheaper database called SQL Server. And yes, traditional database rivals like Sybase and Informix were fading further and further from view. But Ellison knew that the database business was showing signs of maturing, and that his company would be hard-pressed to continue delivering 30% growth rates year after year after year--especially when faced with a slew of upstart competitors. Oracle had always thought its software would be the core of operations in corporate America, but now a host of new rivals--Siebel, PeopleSoft, and SAP among them--were offering programs that threatened to relegate the database to mere plumbing. Some observers viewed the threat as modest, believing that Oracle could simply coexist with these relative neophytes, whose applications were predicated on tapping into databases. But that wasn't Larry Ellison's take. That wasn't his take at all.

The question he faced was simple: Where would Oracle go from here? How could Ellison take his company to the next level--the leadership role he so deeply believed it deserved? And then it hit him, he says. Oracle would create a suite of Internet-based enterprise application software. These enterprise applications would work perfectly with Oracle databases. The resulting combination would be irresistible to corporate IT guys looking to make their lives simpler. It would be an unbeatable combination. And Oracle would wipe out its competitors, wipe 'em all right out, just as it had marginalized Sybase and Informix. "I realized this was the right thing to do for two reasons," recalls Ellison. "Number one, we're the big guys. We have the size and the brainpower to do this. No other software company does. If we're going to do applications, let's do it. Let's really do it. Two, I of course saw how incredibly successful Microsoft's Office suite was. Here we had a chance to do the same thing."

Whoa! Hold on here. The same strategy as Microsoft? Isn't this the same Larry Ellison who hired private detectives to dive into Mister Softee's dumpsters to dig up dirt on the company? ("Unsavory, yucky--kind of. But legal," Ellison says.) Aren't Oracle and Microsoft the bitterest blood rivals in techland? The new economy's Celtics and Lakers, Corn Huskers and Sooners, Hatfields and McCoys?

Exactly. And though Ellison may be flattering Bill Gates by copying him, he's also hoping to thrash him. To that end, Oracle's famously flamboyant chief has committed himself to a radical, bet-the-company strategy to build a colossus of finely integrated business applications that will do for the Net what Microsoft's software did for the old world of personal computers.

Indeed, one might argue that databases are already the system software of the e-commerce Internet, just as Windows is the key software of the PC realm (though the market share of Oracle's database software, roughly 40%, is less than half of what Microsoft's flagship program controls in PCs). So a suite of Oracle Net software applications, says Ellison, is a natural extension. Making Oracle the one-stop shop for database and application software is the right thing to do for his corporate customers. "It's like if you want to buy a car," says the high-energy CEO in one of his familiar rants. "Would you get an engine from BMW, a chassis from Jaguar, windshield wipers from Ford? No, of course not. Right now with the software that's out there, you need a glue gun--or hire all these consultants to put it together. They call it best of breed. I call it a mess. We want to put an end to that. Sometimes choice is a bad thing. If you say that our strategy is like Microsoft's in that it's giving customers what they want in one seamless package, then yes, it's like Microsoft."

Next Section: On March 12, 1986, Oracle Corp. went public at $15 a share.

Fortune Magazine; Vol. 142, No. 11
November 13, 2000