Why Larry Ellison's new role could actually change Oracle

Larry Ellison ran Oracle as a feudal monarchy, and it won’t be the same if he’s no longer king.

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Oracle CEO Larry Ellison

Credit: Reuters

As most everyone knows by now, Oracle’s Larry Ellison last week announced that he’s stepping down from his position as CEO of the company he founded in 1977. At age 70, Ellison will stay on at the company as chairman and CTO. Leadership structure won’t change much, as the company’s co-presidents Mark Hurd and Safra Catz will become co-CEOs.

That continuity has led many observers to believe that things won’t change much at the huge and dominant business technology vendor.

I think they’re wrong. And here’s why.

Oracle is a feudal monarchy

It boils down to something a very smart technology journalist I know casually mentioned to me more than 10 years ago, which has been supported by conversations with many past and present Oracle workers. After covering Oracle for decades and working with the company around the turn of the millennium, he described Oracle's culture and organization as a "feudal monarchy," with all power and influence derived from actual and perceived access to the King: Larry Ellison.

Think of Oracle's notoriously hyper-aggressive VPs as the palace court, lords and ladies fighting over their various fiefdoms. Directors and senior directors are the head serfs, well compensated for their work but subject to the whims of the landed gentry. Everyone else is a peasant, just doing their work and getting paid (often very well, of course). The relationships among these various groups were typically fluid, bound by loyalty, performance, and relationships, more than super-strict rules and procedures.

Contrast that structure with a company like IBM, or Oracle arch-rivals Microsoft and especially SAP, where bureaucracy and stability typically win the day. Both approaches have their advantages and disadvantages, of course, but Oracle’s unique environment and decades of Ellison's iron rule mean that any change at the top could have big implications.

The king is retired, long live the kings?

If Ellison really does step further back from day-to-day decision making (to be fair, at times he’s been consumed with other passions other than Oracle, leaving the minutiae to others), someone or something else will have to take his place. It could be that Hurd and Catz will share the throne, but that sounds like an unsustainable recipe for conflict and uncertainty, especially if Ellison is still around to second guess the really important stuff.

See also: Oracle's Ellison flip-flops on in-memory database

More likely, this is the first step toward turning Oracle into a more traditional company, more beholden to processes and procedures than personalities. That’s not some little blip; that’s a fundamental change at a hugely important company.

(Disclosure, I worked for Oracle briefly in 2001.)

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