America’s Cup:

Lawrence J. Ellison discusses the America’s Cup, describing it as the oldest international sports trophy, dating back to 1851. He emphasizes its competitive nature and how the cup is named after the schooner “America,” which won the inaugural race. He notes that in 160 years, only six teams have managed to win the trophy. Ellison shares his own journey of winning the cup on his third attempt and anticipates future competitions, saying they will be against strong teams.

Extreme Sailing:

Ellison elaborates on the advanced technology involved in the boats used for the America’s Cup. Unlike traditional sailing, these boats are designed for extreme speeds and are intentionally unstable to achieve this. The technology makes these boats dangerous, yet exhilarating, with speeds up to 40 miles per hour.

Longevity in Tech:

Ellison is recognized for his extended tenure as CEO of Oracle since 1977, making him one of the longest-running tech CEOs in Silicon Valley. While his leadership in Oracle was briefly touched upon, the focus shifted to the state of innovation and Ellison’s views on Silicon Valley.

The Evolution of the Internet and Cloud Computing:

Ellison reflects on how the Internet was the last big technological change and how it has matured over time. He points out that the internet has moved from complex end-user devices to simplified devices, migrating complexity to network servers. This transition is what is now often referred to as cloud computing.

Software as a Service (SaaS):

Ellison claims to have been an early innovator in SaaS through his company NetSuite, which preceded Salesforce.com. Both companies initially provided software services through the internet, which later came under the umbrella term of cloud computing. Ellison takes issue with the term “cloud computing” being seen as a new phenomenon, as it has been a natural evolution from the internet and SaaS.

Branding of Cloud Computing:

Ellison explains his resistance to the term “cloud computing,” viewing it more as a rebranding rather than a new concept. He notes that the functionality and architecture of cloud computing date back years before the term was coined. Despite this, he acknowledges that the term has now been universally adopted.

The overall conversation offers valuable insights into competitive sailing, technological evolution, and the dynamics of long-term success in Silicon Valley.

Internet’s Pervasiveness:

Lawrence J. Ellison starts by emphasizing the transformative power of the Internet. According to him, our lives are now essentially lived online, a progression that’s been happening for years.

Evolution of Consumer Data:

Previously, the most vital source of consumer data was credit databases, which tracked creditworthy consumers globally and their purchase habits. The speaker argues that this method of gathering data is now almost obsolete.

Power of Social Media:

With platforms like Facebook and Twitter, companies now have a more comprehensive data set, which includes social interactions and personal preferences, aside from just financial data. Ellison notes that consumers willingly share this information, making it even more valuable for businesses.

Real-time Feedback:

Ellison explains how real-time data from social media can be invaluable for brand management. Companies can quickly react to consumer feedback and take corrective measures as necessary, something that wasn’t possible with older methods of data collection.

Personal Experience:

Ellison discusses his initial fascination with Facebook and how he used it to understand social networking’s capabilities. His personal interaction helped him appreciate the far-reaching implications of such platforms.

Monetization Challenges:

Ellison talks about how Google successfully monetized search, and while Facebook has a massive advertising play, exactly how it will monetize its extensive data remains uncertain.

Role in Modern Marketing:

Salesforce aims to make selling more efficient by leveraging social media data, reflecting a broader trend. Ellison mentions that Oracle aims to analyze data streams from various social media platforms for better consumer understanding, thus substantiating their recent acquisition, Vitra.

Future of Innovation:

When asked about the future of Silicon Valley and innovation, Ellison doesn’t specifically predict upcoming revolutions but implies that the current trend of digital transformation and data-driven business models is significant in itself.

Creative Destruction:

Lawrence J. Ellison discusses the concept of “creative destruction,” emphasizing that companies must evolve or face obsolescence. He cites Woody Allen’s analogy that relationships are like sharks; they must move forward or die. The same principle applies to companies, particularly in maintaining current technology and staying ahead of competitors.

Silicon Valley Dynamics:

Ellison notes that while some companies in Silicon Valley are under stress, others like Facebook and Splunk are thriving. He suggests that the technology sector is not a zero-sum game; companies can emerge with groundbreaking innovations while others falter.

Technology Hype vs Promise:

When asked about overhyped technologies, Ellison states that the most promising technologies often get the most attention and can be both hyped and promising. He uses the example of cloud computing, which was initially considered overhyped but later proved to be highly influential.

Consumer vs Enterprise Markets:

Ellison observes that the consumer part of the IT industry has surpassed the enterprise sector in size, partly due to the rise of smartphones and Apple. While Oracle is not a consumer business, they do provide services to companies in the consumer sector, such as Apple and various phone companies.

Oracle’s Position and Strategy:

Regarding Oracle’s role, Ellison describes it as a primarily enterprise-focused company that sells to consumer businesses. They compete directly with IBM in various sectors, claiming superiority in databases and middleware. He also states Oracle’s plan to overtake IBM in high-end servers.

Management and Product Development:

Ellison reveals his role at Oracle as the person overseeing engineering. The company spends $5 billion in R&D, and he works closely with engineers to steer the company’s product roadmap.

Unified Data Center Solution:

Ellison talks about Oracle’s decision to enter the hardware business. He argues that data centers have become unnecessarily complex because companies integrate disparate components from different vendors. Oracle aims to simplify this by providing a comprehensive solution including disk drives, networks, servers, and databases.

This segment portrays Ellison as a leader keenly aware of the imperatives of innovation, competition, and adaptability in a rapidly evolving tech landscape.

Oracle’s One-Stop Solution:

Lawrence J. Ellison discusses Oracle’s strategy of offering comprehensive solutions for data centers. The company sells building blocks that include everything from disk storage to database servers and software, aiming to make data centers more reliable and cost-efficient. This approach is likened to Apple’s integrated system where hardware and software are designed to work seamlessly together.

Profitability of Sun Acquisition:

Ellison reveals that Sun Microsystems, which Oracle acquired, has already paid for itself. Despite a decline in the top line of the hardware business, the focus on profitable segments has led to significantly higher margins. Ellison anticipates the hardware business will start growing again next year.

Role of Software in Hardware:

Countering the perception that Oracle is inexperienced in hardware, Ellison emphasizes that most of the hardware business is, in fact, software. He elaborates that just like in an iPhone, where the complexity is 98% software and some chip technology, Oracle’s hardware business, especially following the Sun acquisition, is largely software-based.

Ellison’s Role at Oracle:

Ellison mentions that he has always been in charge of engineering at Oracle and continues to focus on product planning and development. He oversees a $5 billion R&D budget and collaborates closely with Oracle’s other leadership in sales, marketing, and back-office operations.

Challenges and Adaptability:

Ellison highlights the importance of constant innovation and adaptability for the survival of a company. Companies need to be aware of emerging technologies and consumer demands; otherwise, they risk losing to competitors. Oracle aims to keep its technology up-to-date to stay ahead in the competitive landscape.

Consumer vs. Enterprise Focus:

While Oracle is not a consumer-focused company, it serves clients like Apple who are in the consumer business. Ellison mentions that the consumer part of the IT industry has overtaken the corporate part for the first time, but Oracle still firmly identifies as an enterprise business.

Importance of Social Media:

Ellison humorously contemplates engaging with the public through Twitter, emphasizing the role of social media in contemporary business interactions, though this is not a primary focus of the discussion.

This summary encapsulates Lawrence J. Ellison’s insights on Oracle’s business strategy, the role of software in hardware, and the importance of adaptability and innovation.

Oracle Cloud Services:

Lawrence J. Ellison announces the general availability of Oracle Cloud, which will feature a complete ERP and CRM suite. It’s based on Oracle’s Exadata and Exologic machines, giving customers a robust and comprehensive platform-as-a-service.

Virtualization and Control:

Ellison highlights the advantage of running in one’s own Virtual Machine (VM) compared to multi-tenancy. A dedicated VM offers more security and control, allowing clients to choose when to upgrade their software, unlike multi-tenant arrangements where upgrades are controlled by the vendor.

Comparison with Amazon:

Ellison notes that Oracle Cloud’s architecture aligns more closely with Amazon’s modern approach to the cloud, distinguishing it from other Software-as-a-Service vendors.

Legal Affairs with Google and HP:

Ellison briefly discusses ongoing litigation, particularly noting that the case with Google is more focused on copyright than patents. He avoids detailing ongoing litigation but emphasizes that the important issue is the “copyrightability of software.”

HP and Relationships:

In addition to legal matters, Ellison talks about relationships with HP. He criticizes HP’s previous management while stating he has a better relationship with Meg Whitman, HP’s CEO. He wishes her success but remains focused on Oracle.

Comments on SAP:

Ellison brings up past legal issues with SAP, stating that they pleaded guilty to criminal theft of Oracle software. He emphasizes that his concern was during the period when Leo Apotheker, whom he criticizes heavily, was in charge.

The overall tone suggests Ellison’s confidence in Oracle’s new cloud offerings and a complex landscape of relationships and legal affairs in the tech industry.

Motivations:

Lawrence J. Ellison describes what keeps him going as a journey of discovery. He is deeply interested in understanding both human potential and technological capabilities. He thrives on competition, whether it’s to outperform IBM or to push the limits of the technology his company develops. Ellison finds fulfillment in leveraging technology to solve customer problems and considers the whole process captivating.

View on Life:

Ellison considers life to be a journey focused on discovering personal limitations and understanding others. Even in leisure activities like sailing, he is inclined towards competition over mere enjoyment, suggesting a deeply ingrained competitive spirit.

Public Image and Personal Traits:

When questioned about public perception and his image, Ellison admits it’s a complex topic. He hints at the difficulty in accurately representing oneself to the public and acknowledges the cleverness of the question without directly commenting on whether the public’s perception matches his actual self. An interesting personal tidbit he reveals is his ability to play classical guitar, a detail he believes is generally unknown.

Enigma in Personal Details:

Ellison presents himself as someone constantly hungry for challenges and fascinated by the world around him. However, he appears reserved when discussing personal aspects of his life, revealing only minimal details. This creates a blend of transparency and enigma surrounding his persona.

Public Perception vs. Reality:

Lawrence J. Ellison talks about how people often have a preconceived notion about him that changes once they meet him in person. He humorously suggests that not living down to a ‘low bar’ of expectations is often enough to change people’s minds.

Strategic Competition:

Ellison emphasizes that Oracle is not interested in competing with IBM in the services sector; instead, the focus is on the product side. He points out that Oracle has outgrown IBM in the software domain, beating them in databases and middleware. The next competitive target for Oracle is high-end servers where they aim to outperform IBM’s P-Series with their own Exadata, Exalogic, and Exalytics servers.

Oracle vs. SAP:

According to Ellison, Oracle’s other major competitor is SAP, particularly in the ERP (Enterprise Resource Planning) domain. He highlights how Oracle is modernizing its cloud applications while SAP hasn’t yet begun to rewrite theirs. Ellison sees a significant opportunity for Oracle to take over SAP’s ERP market share, especially given that SAP allegedly has no new offerings until 2020.

Market Opportunities:

Ellison believes that Oracle has a massive chance to dominate in multiple areas. In infrastructure and the platform area, the competitor to beat is IBM. In the cloud area, the rival to topple is SAP. Ellison asserts that Oracle has a significant advantage, especially in high-end ERP against SAP, for the foreseeable future.

Future Challenges:

While answering a query about Oracle’s ‘next mountain to climb,’ Ellison indicates that beating IBM in high-end servers and analytics and overpowering SAP in the cloud area represent the next set of challenges for Oracle. He is confident that these are achievable goals, providing a glimpse into Oracle’s strategic direction.

Apps Business Model:

Lawrence J. Ellison clarifies a misconception regarding Oracle’s apps business, particularly the belief that the company locks customers into older software and raises maintenance fees. He states that the fees remain consistent; it’s the customer’s choice to buy more software.

Next-Gen Companies and Oracle:

A concern is raised about next-generation companies potentially not using Oracle, citing remarks from Mark Andreessen. Ellison dismisses this, emphasizing that Oracle’s business is growing and will soon have all applications available in the cloud.

Competition in the Cloud:

Ellison speaks about Oracle’s major competitors in the cloud sector, including SAP, Salesforce, and Workday. He points out that Oracle already has significant cloud revenue (~$1 billion in PureSaaS) and expects continued growth. He notes that unlike SAP, Oracle has invested in rewriting their applications for the cloud.

Critique of Workday:

Ellison takes time to critique Workday, a competitor in the cloud-based human resources software sector. He criticizes Workday’s architecture, specifically its use of an object store instead of a database, making it inefficient for reporting. He also mentions Workday’s limitations with Flash as a user interface.

Oracle’s Cloud Capabilities:

Ellison asserts that Oracle’s cloud offerings are mature and competitive, specifically mentioning their Fusion HCM product. He anticipates that Salesforce will remain a formidable competitor but does not have the same concerns about Workday due to what he perceives as their product’s immaturity and architectural flaws.

Final Thoughts:

Ellison makes it clear that he is confident about Oracle’s standing in the industry, specifically pointing to their robust database and middleware used by other significant players like Salesforce and NetSuite. He concludes that Oracle is not “a loser” in the evolving business landscape, especially with their forthcoming fully integrated cloud suite.

Sailing Passion:

Lawrence J. Ellison, also identified as SPEAKER_09, spoke about his longstanding passion for competitive sailing. Starting as an amateur sailor, he steered his boat Sayonara to five consecutive world championships at Ohio’s highest level. He also highlighted the inevitable curiosity that arises after succeeding as an amateur: competing against professionals. He mentioned competing against Russell Coutts and acknowledged Coutts’ superior skill.

Healthcare Endeavors:

Ellison talked about his investments in the healthcare sector, both personally and professionally. He has a foundation, the Ellison Medical Foundation, that focuses on researching diseases related to aging, such as cancer, Alzheimer’s, and Parkinson’s. The foundation aims to understand the mechanisms of aging that make individuals more vulnerable to these diseases. He mentioned that he has spent approximately a billion dollars supporting this cause. Additionally, Oracle has a large health sciences practice, and he has also invested in a startup focused on computational molecular dynamics for drug design.

U.S. Manufacturing and Immigration:

When questioned about U.S. manufacturing, Ellison pointed out that high-end manufacturing is possible in the U.S. because labor costs are not the primary issue; the cost of parts is more significant. He emphasized that the U.S. has a scarcity of skilled manufacturing engineers. Ellison advised a balanced immigration policy that encourages skilled professionals, such as engineers and scientists, to stay in the U.S. post-education. He criticized current policies that compel these individuals to leave, noting that this deprives the U.S. economy of valuable talent.

Overall:

Ellison provided valuable insights into his personal and professional endeavors, from his passion for sailing to his significant investments in healthcare research. He also highlighted the importance of reviving U.S. manufacturing and adopting an enlightened immigration policy to attract and retain skilled professionals.