Larry Ellison is one of the richest people in the world with the net worth of $55.2 billion as of March 2017 according to the Forbes World’s Billionaires list.
Ellison has donated up to 1% of his wealth and is taking part in The Giving Pledge commitment campaign.
Larry Elison takes part in yachting competitions with his Oracle Team USA, he is a licensed aircraft pilot, and he enjoys playing tennis and guitar. Larry Ellison is a self-made entrepreneur and billionaire who achieved his success through trials and errors. His parents did not have a penny, and during all his life he has been making up for the miserable childhood.
The distinctive personality traits of Larry Ellison are persistence, strategic vision, and passion to innovations.
EARLY LIFE
Larry Ellison was born in New York City, to an unwed Jewish mother. His biological father was an Italian American United States Army Air Corps pilot. After Ellison contracted pneumonia at the age of nine months, his mother gave him to her aunt and uncle for adoption.He did not meet his biological mother again until he was 48.
Ellison moved to Chicago's South Shore, then a middle-class neighborhood. He remembers his adoptive mother as warm and loving, in contrast to his austere, unsupportive, and often distant adoptive father, who adopted the name Ellison to honor his point of entry into the United StatEllis Island. Louis Ellison was a government employee who had made a small fortune in Chicago real estate, only to lose it during the Great Depression.
Although Ellison was raised in a Reform Jewish home by his adoptive parents, who attended synagogue regularly, he remained a religious skeptic. Ellison states: "While I think I am religious in one sense, the particular dogmas of Judaism are not dogmas I subscribe to. I don't believe that they are real. They're interesting stories. They're interesting mythology, and I certainly respect people who believe these are literally true, but I don't. I see no evidence for this stuff." At age thirteen, Ellison refused to have a bar mitzvah celebration. Ellison says that his love affair with Israel is not connected to religious sentiments, but rather due to the innovative spirit of Israelis in the technology sector.
Ellison left the Universafter his second year, not taking his final exams, because his adoptive mother had just died. After spending a summer in Northern California, he attended the University of Chicago for one term, where he first encountered computer design. In 1966, aged 22, he moved to Northern California.
Early Career
Larry Ellison found his first job at Amdahl Corporation, a technology company founded in 1970 by Gene Amdahl in Sunnyvale, California. At the beginning of the 1970s, Larry Ellison worked for an electronics company Amtex, founded by Alexander M. Poniatoff in 1944 that faced stiff competition with Sony Corporation. At Amtex, he mostly worked on a database for the CIA, which he called “Oracle.”
In 1977, Larry Ellison met Bob Miner met at Ampex, who was Larry’s supervisor then. However, Bob Miner quitted Ampex soon, and on June 16, 1977, he co-founded a company called, Software Development Laboratories (SDL), together with Bruce Scott and Ed Oates with the investment of $800. A few months later Larry Ellison joined their enterprise as a business partner and invested $1,200 into the firm.
In 1977, Larry Ellison met Bob Miner met at Ampex, who was Larry’s supervisor then. However, Bob Miner quitted Ampex soon, and on June 16, 1977, he co-founded a company called, Software Development Laboratories (SDL), together with Bruce Scott and Ed Oates with the investment of $800. A few months later Larry Ellison joined their enterprise as a business partner and invested $1,200 into the firm.
Later, Ed Oates introduced Miner and Ellison to a paper by Edgar F. Codd on the relational model for database management called “A Relational Model of Data for Large Shared Data Banks,” and Larry Ellison got inspired by it. Soon they started working on the database management system (DBMS). Companies used it for the distributed storage of the lists of clients, equipment data, financial notes, transaction information, correspondence, legal documents and so on.
Oracle Systems Corporation
In 1979, SDL was renamed into Relational Software Inc., and in 1982 officially became Oracle Systems Corporation after its flagship product, the Oracle RDBMS, which was an object-relational database management system. The initial release of Oracle RDBMS was issued under v2.0; there was no Oracle v1.0 as Ellison was sure that no one would buy version 1.
According to Ellison, the Oracle RDBMS could do unbelievable things at that time: to sort the best performing supermarkets from the whole supermarket chain or to sort and filter bestseller goods and products. Oracle RDBMS was able to process a vast amount of data, which became very alluring for the government and big business. There were only eight employees (including three co-founders: Larry Ellison, Bob Miner, and Ed Oates) and the company revenue reached less than $1 million.
Starting from 1974, IBM Corporation was also working on the database products based on Codd’s theories at IBM’s San Jose Research Laboratory. They developed IBM System R, and Ellison wanted Oracle products to be compatible with it. However, IBM executives refused to share System R’s code.
By 1982, the revenue of Oracle reached $2.5 million with 75 micro- and mini- clients on board. Larry Ellison invested 25 percent of the revenue into R&D during 1982 to develop a commercially available and portable Oracle RDBMS, based on the C programming language compiler. Oracle’s contracts with government agencies had provided enough funds to let their team focus on the commercially viable products that would help them to occupy some market share from IBM and other IT companies of those times.
In 1983, Oracle RDBMS of v.3 became a commercially accessible and could be installed on all types of operating systems such as mainframes, workstations, personal computers, microcomputers, etc. Ellison was right, and Oracle’s investments paid off by doubling company’s revenue to $5 million. In 1985, the company’s revenue sales reached $23 million, and in 1986, the revenue sales reached $55 million. Oracle focussed on the leading clients such as government agencies and largest international companies in the automotive, aerospace, pharmaceutical and manufacture industries.
IPO
On March 12, 1986, Oracle Systems Corporation initiated its IPO on the NASDAQ (ORCL) stock exchange with the initial cost per share of $15 that increased to $20.75 at the close of the trading day by selling 2.1 million shares and raising $31.5 million.
Here is an interesting fact. You may question: how much are 100 Oracle shares worth today? Here is the answer: Oracle has had six 2/1 splits and four 3/2 splits. It means each initial share has grown to 324 shares. So 32,400 shares at $42.69 (cost per share as of March 08, 2017) equals $1,383,156.
After the IPO, Larry Ellison set up marketing subsidiaries in 17 countries to trade Oracle’s products in more than 35 countries. Soon Oracle introduced the SQL Star software that could process and retrieve data stored across the network’s computer systems.
Oracle’s Crisis
In 1990, Oracle faced its first crisis and finished the year with a negative net income and started losing money. The market value of the company was reduced by 80%, and it seemed as if the company was on the brink of bankruptcy. The same year, Oracle dismissed 10% of its employees, about 400 people. The main reason for the crisis was due to the aggressive marketing strategy. The sales team urged prospective clients to purchase all of the possible Oracle software at once by booking the value of the future license sales in the current quarter. As a result, such actions increased their bonuses, but when the scheduled sales failed to materialize afterward, this became a big issue. Being a public company, Oracle incurred additional costs to resolve class-action lawsuits from the shareholders regarding its overstated earnings. It was an incredible business fault, according to Larry Ellison. As a result, the company had to pay $24 million to its shareholders.
At the beginning of the 1990s, IBM had the biggest market share in mainframe relational database market with its database products such as DB2 and SQL/DS. While other competitors such as Sybase, Oracle, Informix, and Microsoft used the opportunity to occupy the niche for a relational database on UNIX and Windows and dominate mid-range systems and microcomputers.
From 1990 to 1993, Sybase was the fastest-developing company, and Oracle remained behind. But after three years of biggest sales and significant mergers, Sybase sold all rights of its software to Microsoft Corporation, which now positions its software under the name “SQL Server.” In 1994, Sybase was absorbed by Informix that became the most prominent rival of Oracle.
The database competition between Informix CEO Phil White and Oracle CEO Larry Ellison headlined Silicon Valley news for three years till 1997 when Informix reported significant earnings restatements and profit shortfall. Phil White got into prison for such corporate fraud activity, and IBM absorbed Informix in 2001 (Sybase programmers and code completed IBM’s DB2 software).
In 1997, Larry Ellison was included in Apple Computer’s Board of Directors after Steve Jobs returned to the company. Ellison served a director of Apple Computer for five years, and on September 20, 2002, he resigned from this position.
Larry Ellison commented: “I will continue to offer my advice to Steve and the executive management team at Apple, but my schedule does not currently allow me to attend enough of the formal board meetings to warrant a role as a director.”
Merger and Acquisitions
Larry Ellison is a great strategist. In his biography, he made a lot of strategic steps to the leading positions in the market to create a bigger software maker.
In October 1994, Oracle acquired a relational database management system (RDBMS), called Rdb division from DEC. It was the first official acquisition by Oracle.
On April 29, 2008, Oracle Corporation bought BEA Systems, Inc. for $8.5 billion. It was a company specialized in enterprise infrastructure software products. Larry Ellison was very determined in making Oracle Corporation number one in the computer technology industry and did all his best to catch up and surpass the giants in the software market.
On January 27, 2010, Larry Ellison agreed to buy Sun Microsystems, Inc. for $7 billion; that was one of the biggest acquisitions by Oracle. Once the deal has been finished, Oracle began to sell technologies, using new database and services based on Sun Microsystems technologies.
However, IBM and SAP remain Oracle’s main competitors.
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