Ellison resigns – So What!!

Ellison resigns – So What!!

Larry Ellison resigned as Oracle’s CEO yesterday. A great headline that detracted from a simultaneous, relatively poor, sales performance announcement. The market did not react much and early trading was only slightly down.

So actually what difference will Ellison’s resignation actually make? In short, not much.

Oracle is in a painful transition, moving itself from a perpetual revenues model to subscription based revenues – a journey that Microsoft anticipated and began a couple of years ahead of Oracle. The stress to sales and the bottom line will continue for the next few years. Ellison however has not conceded anything. He remains CTO and attains Executive Chairman status. He remains the largest single shareholder by far with 25% of the issued stock [market cap$185Bn]. He has relinquished very very little.

So what can we expect from him in the next few months?

Oracle’s strategy from the beginning has been to buy innovation rather than develop it. Ellison’s reputation for “calling out” competitors publicly and aggressively beginning a public war against them, has gained him a certain amount of notoriety – who can forget the prolonged “blood on the walls” over the $10Bn PeopleSoft acquisition.

Indeed the aggressive nature of the man spurns the next generation of competitor and new innovation, look at Salesforce and Workday as examples of management leaving because their ideas were ignored inside Oracle. Oracle has a huge war chest to continue this strategy, so we can expect further acquisitions. This may possibly be in new areas to the peripheral vision side of Oracle’s traditional applications base. For example, embedded software in household products.

Also expect the joint CEO roles of Safra Catz (the world’s highest paid woman, who earned $52million last year), and new boy Mark Hurd (four years in) to cause friction. History tells you that there can only be one winner. Interesting times indeed.

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