Last update - 00:00 12/08/2007
Oracle CEO Ellison while in Israel: Think innovation and go global
By Guy Griml
Oracle CEO Larry Ellison - the man Forbes Magazine ranks the 11th wealthiest in the world - ends his first visit to Israel Sunday, a country he says benefits from its people's willingness to ask questions and criticize. He also emphasized the need for innovation and to think globally.
The Jewish high-tech mogul landed here Wednesday, and by Thursday had visited Sderot with Foreign Minister Tzipi Livni, pledging $500,000 to reinforce the local community center. He said the money would arrive the next day.
After a military briefing on a hill overlooking Gaza, he was taken by helicopter to the North where he visited an Israel Air Force base and saw a film of an IAF flyover above Auschwitz. He met that evening with Prime Minister Ehud Olmert.
On Friday he gave a lecture to 1,000 people at a conference organized by Oracle, followed by visits with President Shimon Peres and military brass as high as Israel Defense Forces Chief of Staff Gabi Ashkenazi.
He met with Defense Minister Ehud Barak for dinner. On Saturday he toured the Dead Sea with 12 members of his family.
Accompanying Ellison is Democratic Congressman Tom Lantos, chairman of the U.S. House Committee on Foreign Affairs, a Jewish Holocaust survivor.
Ellison told his listeners about the early days at Oracle, which he began with just $1,200. He knew he wanted to build a relational database company - in such a datatbase information is represented in tables - and to beat out IBM, Oracle's main competitor.
For him, Ellison said, innovation was finding the mistake in the common wisdom. When he worked as a consultant on relational databases, he saw they were theoretical, but not commercial, as he believed they could be.
Ellison complimented Israeli culture during his address by noting that asking questions and criticizing are a custom here. "It helps very much in business," he said, "but not so much in school, a humorous reference to his own scholastic career in which he was considered a troublemaker." He left college in his sophomore year after his mother died, and began working toward founding Oracle.
"Innovation is the only way to get ahead in science and engineering," Ellison said, "unless you have the resources of an industry giant like IBM." That is why he decided to develop a relational database everyone said was impossible.
Rather than persuade expensive engineers to leave IBM and work for Oracle, they hired the most brilliant people they could find straight out of leading universities such as MIT and Stanford. The average age of their staff was 25, Ellison says. They were inexperienced and had no money, but thanks to their approach they beat IBM with a better product, he says.
Ellison says Oracle is still trying to be innovative, including in its business models. Its most recent innovation was the takeover of PeopleSoft, a customer relationship management (CRM) firm, for $10.3 billion. A deal was eventually struck after Oracle had made a hostile bid for the company.
"Here too," Ellison says, "everyone said it would not work, and the move was both arrogant and idiotic. But it only leveraged Oracle's business."
The vision: medical data storage
Ellison told his listeners that we are still at the dawn of the information age. As an example, he mentioned databases' ability to store all the information about the credit of every person in the world, allowing a consumer to buy a shirt in a Jerusalem store and know in a fraction of a second if money is available to cover the purchase.
Ellison said his vision was to store medical files. He noted that 75,000 people died every year because doctors were writing prescriptions for drugs contraindicated by other drugs patients take. He noted that the preference was to develop applications to improve shopping rather than health, but that he believed the future held developments in the medical field.
During the question-and-answer session, Ellison was asked how an Israeli start-up could become another Oracle. In response, Ellison recommended that Israeli companies think global from day one. He noted that human resources are not cheap in Israel, and that companies should establish research and development centers and sales offices around the world.
When asked how Oracle viewed open code software available at no charge that allows users to create content individually or by collaborating, Ellison said it was a question of whether Oracle was threatened by it. His answer: There are cases where open code is successful and cases where it is not, and open code is successful only when it is better, not because it is free.
Ellison was also asked about his early attempts to attract investors. Venture capital fund managers will not like his answer: When Oracle was founded in 1977, he went to venture capital managers because he did not want to risk his $1,200. But no one would touch him, the common wisdom being to avoid software and invest in hardware and workstations. Silicon Valley did not want to give Oracle a dime, Ellison said, so his company made do with its own money.
Ellison was also asked about his hobbies (he owns a MiG-21 and a $200 million yacht) and is known to enjoy taking risks. He said he looked for ways to let off steam, as well as to meet interesting people, some of which he had met on his trip.