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Oracle CEO Larry Ellison turns 70 with no retirement in sight

Chris Kanaracus | Aug. 22, 2014
Most people start thinking about retirement when they turn 70, if they haven't already called it a career. Not Oracle CEO Larry Ellison, who passed that milestone Sunday.

"They certainly have been challenged by the migration to the cloud, and by all accounts were late to the party," Scavo said.

"The problem Oracle has with doing so many acquisitions is that these many solutions were not designed holistically, and are at best interfaced with one another and not tightly integrated," Scavo added. When Oracle competes for a cloud software suite deal, they must present a "hodge-podge of solutions cobbled together," he said.

To this end, it would be a major mistake for Ellison to make a major cloud vendor acquisition, such as of or Workday, Scavo added.

Beyond applications, Oracle has to play major catch up in the cloud on PaaS and IaaS, in the view of Forrester Research analyst John Rymer.

"When we talk to folks using Java in the cloud they're using CloudBees or Amazon Web Services," Rymer said. "I'm sure there are people who are using [Oracle's Java-based PaaS service], but we just never see it. For me, if something's really catching on, I hear about it from clients."

Oracle also has to grapple with a shift away from its current sales model, Rymer said. Cloud services are typically sold by subscription, while the bulk of Oracle's revenue today is comprised of upfront software license fees and annual maintenance payments, the latter of which carry extremely high profit margins.

Unlike Scavo, Rymer expects Oracle to make more acquisitions to bolster its push into the cloud. Oracle, IBM, SAP and other large vendors "manage cash cow products, but they're really not very good at innovation," he said.

In any event, when Ellison does finally hand off the reins, "I think who he chooses as a replacement will drive what his legacy looks like," said analyst Ray Wang, chairman and founder of Constellation Research.

Someone like Oracle's long-time chief corporate architect Edward Screven would be a "formidable force" as CEO from a technology perspective, Wang said. Hurd, a former Hewlett-Packard CEO and close friend of Ellison's, has been eyed as a potential successor since coming aboard in 2010. Catz's name has come up frequently as well.

Whatever happens, Ellison "is not an easy person to replace," Wang said. "The job could be too big for one person."


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