053 – Consulting the oracle – 1977

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The most important aspect of my personality as far as determining my success goes;
has been my questioning conventional wisdom, doubting experts and questioning authority.
While that can be painful in your relationships with your parents and teachers,
its enormously useful in life.”  Larry Ellison

Larry Ellison was born to a single mother in New York City and brought up by his aunt in Chicago.  His surname came from his adoptive parents who took it from the immigration landing point, Ellis Island.  He was to acquire a personal wealth of $28bn by 2010, becoming the sixth richest person on the planet and the third richest in the USA!

He attended the University of Illinois for a year and a shorter attendance at the University of Chicago introduced him to computer design before he moved to California.  At the Ampex Corporation, Ellison worked on a project for the CIA creating a database named Oracle, optional reception of announcements by coded line electronics.

Ellison was made aware of Edgar Codd’s 1970 paper and IBM’s System R by Ed Oates, who joined Ampex from IBM.  Together with Bob Miner, the three formed Software Development Lab’s in 1977.

Ellison funded the company with a personal investment of just $1,400.  He set out to make his product compatible with System R but IBM insisted on keeping its code secret and this became impractical.

SDL created the world’s first commercially viable relational database and revolutionised the way businesses were able to access and use data.   It used C programming language so the software was readily portable to different platforms.

Its first release, based upon SQL, was named Oracle 2 to imply the product had been through debugging and market testing – perhaps it had at the CIA?  Its first client was the Wright-Paterson Air Force Base that ran Oracle 2 on a PDP-11.

SDL became Relational Software Inc and moved to Menlo Park.

Umang Gupta joined the company in 1981 and as general manager he produced its first business plan.  It was renamed Oracle Systems to link it directly with its product.  In 1984 Sequoia Capital supported Oracle with funding as it ported its software to MS-DOS and the IBM-PC.

1986 revenues were $55m.  New versions, backed by an applications division, grew this tenfold so that in 1989 Oracle Systems revenue was $584m.

1987 it had created a loose sales bonus scheme so the team was paid against clients’ future expected sales.  This led to a misquoting of revenues to the market and shareholders took action.  Oracle laid off 10% of its team to avert bankruptcy.

Early ‘90s With its technological advances Sybase led the sector, but it took its eye off the ball and focused on acquisitions and mergers.

1994 Informix had surpassed Sybase and was Oracle’s sternest opponent.  Ellison of Oracle and Phil White, CEO of Informix, had a vitriolic and highly public battle for hearts and minds; Oracle had won the battle by 1997.

From the mid-‘90s Oracle maintained a busy buying programme that saw it acquire over sixty organisations in fifteen years – Express in 1995, Hyperion in 2007, Sun Microsystems in 2009 (for $7.4 bn). 

Sun Oracle Database Machine was launched as the world’s fastest platform for any database and soon had 300,000+ clients, including all the Fortune 1000 companies; it operates in 145 countries. 

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