Larry Ellison Yields Spotlight to Oracle’s New CEOs

After being the dominant voice in more than 150 Oracle earnings calls across more than 40 years, chairman Larry Ellison stepped back and played only a minor role in Oracle’s most-recent call, allowing CEOs Mike Sicilia and Clay Magouyrk to articulate the company’s strategy and direction.

Ellison’s decision is the latest tangible indication of the profound evolution taking place at the highest levels of the company he cofounded 49 years ago, and that he and longtime CEO Safra Catz led in an extraordinary collaboration for 26 years.

While Ellison continues to be vigorously involved in Oracle’s long-range vision, product strategy, market positioning, and high-level partnerships, the dynamics of that March 10 earnings call reveal that six months after Catz’s decision to step out of the CEO role, Ellison is supremely confident in the ability of Magouyrk and Sicilia to be the new public faces and voices of the company.

While I realize this is the way life works — nothing lasts forever — these early indications of Ellison’s willingness and perhaps even eagerness to step out of the Oracle spotlight he has dominated for the past half-century are momentous because Ellison and his achievements have made him one for the ages:

• the transformation of the database from a gritty and not-well-understood technology into one of the world’s most valuable and strategic assets;
• his early recognition that the database business and applications would be more valuable together than they are separately;
• his decision to leap into the hardware business when most other enterprise-tech companies were scrambling to abandon it;
• his foray into sailboat racing, where he transcended the caricature of a rich guy playing with expensive toys by not only winning the America’s Cup but also totally overhauling the sailing industry and how it engages with the world via his astute reliance on advanced technology;
• his absolutely audacious decision to begin competing directly against three of the world’s largest, most-powerful, and wealthiest corporations — Google, Amazon, and Microsoft — in the cloud-infrastructure market, and confounding cynics and supporters alike by then becoming enormously successful and forcing others to play catch-up;
• his stupendous achievement in getting those same three extraordinary competitors to turbocharge Oracle’s success by agreeing to sell the Oracle Database to *their* customers via *their* sales organizations;
• his vision to create massive “AI data centers” to power the AI Revolution; and
• Ellison’s ability to pursue — amid all of the wild stuff Oracle was pursuing — simultaneous adventures in professional tennis, restaurants, hotels, robotic farming, medical research, philanthropy, art, and more.

Let me pause here to emphasize that I certainly am not saying that Larry Ellison’s riding off into the sunset. Rather, what I am saying is that Ellison is clearly taking the first essential steps in ensuring that Oracle’s leadership is in the best possible hands so that when Ellison does decide to begin backing away from running Oracle — an outcome that is inevitable even for Larry Ellison — he can be fully confident in the company’s future.

And that speaks directly to his supreme confidence in Sicilia and Magouyrk, which has become increasingly evident over the past six months.

1. Safra Catz steps aside. On Sept. 22, two weeks after Oracle announced explosive growth in its fiscal-Q1 earnings call, the company issued a press release saying Catz had decided to step away from the CEO role and take on the newly created position of executive vice-chairman. In that announcement, Ellison offered this assessment of the transition: “Safra led Oracle as we became a hyperscale cloud powerhouse — clearly demonstrated by our recent results. In her role as Vice Chair, Safra and I will be able to continue our 26-year partnership — helping to guide Oracle’s direction, growth and success.”
2. Two CEOs replace Catz. Simultaneously, Oracle promoted Magouyrk and Sicilia to CEO, pointedly avoiding the “co-CEO” title. The company held a special call with financial analysts to discuss the transition, and throughout that call, Catz graciously deflected questions directed to her and instead asked Sicilia and Magouyrk to address them.
   
   While Ellison also deliberately steered some questions to the new CEOs, he also gave several detailed answers to analysts’ questions. In addition, the press release offered this comment on the new CEOs from Ellison: “A few years ago, Clay and Mike committed Oracle’s Infrastructure and Applications businesses to AI — it’s paying off. They are both proven leaders, and I am looking forward to spending the coming years working side-by-side with them. Oracle’s future is bright” (emphasis added).
3. Sicilia and Magouyrk make their marks. Three months ago on Oracle’s fiscal-Q2 earnings call in December, Ellison made some opening remarks as he always does — well, as he always did, as I’ll explain in a moment — while both Sicilia and Magouyrk offered extensive opening commentary. Magouyrk focused on the infrastructure business he’s led for the past decade while Sicilia discussed customer trends and Oracle’s apps/agents business. During the Q&A session, Ellison was an active participant, offering extensive commentary on the fast-changing and rapidly growing AI marketplace while also ensuring Magouyrk and Sicilia received plenty of airtime.
4. Ellison shifts to supporting role on Q3 earnings call. While it’s possible that I’m making too much of the staging of Oracle’s March 10 earnings call, I don’t think that’s the case. First of all, for the first time I can recall, Ellison did not make an opening statement — both Magouyrk and Sicilia did, and in my estimation did excellent jobs of laying out how Oracle’s business is doing, where it is headed, and why the company believes, as Ellison said above, “Oracle’s future is bright.” So that was a fundamental break with how the company has presented itself to the market for the past four decades.
   
   The second big shift was that during the Q&A session, seven questions were asked and all seven questions were directed to the new CEOs and not to Ellison. In fact, Ellison did not say a single word on the 50-minute earnings call until the very end, when he added some follow-up thoughts to a question that Sicilia had answered.
   
   Ellison concluded his response with a comment that is vintage iconoclastic Ellison: “And thank God we have these coding tools now that allow us to build a comprehensive set of agent-based software to automate a complete ecosystem like healthcare or financial services. That’s what we’re doing at Oracle. That’s why we think we’re disruptors. And that’s why we think the SaaSpocalypse applies to others, but not to us.”

Final Thought

While I think these latest changes in the momentous evolution taking place at the top of the company are highly significant and are surely indications of more adaptations still to come, I want to reiterate that I am certainly not saying or suggesting that Larry Ellison has decided to step away from Oracle.

But I think the public presentations from Oracle leadership over the past six months have made it abundantly clear that Clay Magouyrk and Mike Sicilia are very much in charge at the #2 company on the Cloud Wars Top 10, and that Ellison as well as Catz very much want them to be perceived as running the entire company and not just distinct business units.

As Ellison himself said (noted above), “A few years ago, Clay and Mike committed Oracle’s Infrastructure and Applications businesses to AI — it’s paying off. They are both proven leaders, and I am looking forward to spending the coming years working side-by-side with them.”

Coming from Ellison, that’s an extraordinary endorsement for Magouyrk and Sicilia, and an unmistkably clear message to the market that Oracle’s future leaders are not only in place but also in charge.