Oracle customers are likely to welcome Larry Ellison's decision to remain as CTO following last week's leadership reshuffle, but the promotion of senior execs Safra Catz and Mark Hurd to co-CEO raises questions over the company's ability to adapt to the cloud.
According to Gartner research VP Chad Eschinger, Friday's announcement that Larry Ellison will step down as CEO was unexpected but will not have a significant impact on customers in the short term.
"With a passion for the company and technology, he's not ready to relinquish direct involvement in the development and direction of the company he helped found," Eschinger said.
"Clients can expect minimal to no changes in Oracle's product strategy or technology direction given Larry Ellison is retaining product development."
UK Oracle User Group (UKOUG) president David Warburton-Broadhurst said that customers will welcome the stability and continuity of Ellison's succession plans, with no changes to reporting structure as Catz and Hurd take over.
The three senior execs have been running the company together for a number of years, with Hurd taking charge of sales, marketing and strategy, while Catz focuses on finance, legal and manufacturing operations.
"They completely understand the business and have strong relationships with Oracle customers," said Warburton-Broadhurst.
"UKOUG believes this succession will enable a successful transition and allow our members to be confident in their Oracle investments and future product roadmaps."
He added: "We are looking forward to hearing more on these topics at Oracle OpenWorld next week."
However Gartner's Eschinger noted that by retaining some control at the company, it could be difficult for Catz and Hurd to take new strategic directions: "What is unique is that the new Oracle CEO's do not have product development which typically is a significant means of achieving the CEO's objectives. How this will play out is going to be worth watching."
Oracle's Q1 results, released as the management changes were announced, highlighted flat revenues with hardware sales down and Saas - which saw double digit growth - still accounting for a small percentage of its business.
Capgemini's Head of Alliances, Application Services UK, Anne Cave-Penney, also questioned whether the changes would enable the co-CEOs the freedom to overhaul the business as customers move workloads off-premise.
"[Ellison's decision to step down] is a surprising move that will prompt some serious questions around the future of the business, not least will he be prepared to genuinely relinquish control to Hurd and Katz," said Cave-Penney.
"Oracle's traditional revenue streams, namely hardware and on premise enterprise software, are not performing as well as they once were, and so for the company to alter its current trajectory it will need to grow its cloud revenues quite aggressively.
"Oracle is in need for some radical changes and if Ellison does truly hand over the reins to his co-CEOs, this could be just what the business has been looking for."
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