How Larry Ellison became one of the richest people in the world
In 1945 , a young single mother decides to give her son up for adoption because she did not have enough resources to take care of him. 60 years later, that boy had become one of the ten richest man in the world and had created one of the most powerful companies in the technology industry… How did she do it?
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The protagonist of this story is Lawrence Joseph Ellison , better known internationally as Larry Ellison, who was born on August 17, 1944 into a low - income Jewish family in Bronx, a New York city.
His mother, Florence Spellman , became pregnant when she was just 18 years old. Her father, a US Army Air Corps pilot , abandoned them shortly after learning of the pregnancy, leaving the young mother and her future child in dire financial straits.
At 9 months old, the little boy contracted pneumonia and his mother decided to give him up for adoption to his sister, Lillian Spellman , who took care of him in the company of her husband, Louis Ellison .
He remembers his adoptive mother as loving and warm, in contrast to his adoptive father, a government employee who had made a small fortune in real estate in Chicago and was characterized as austere, unsupportive and often distant.
Although Larry was raised in a Reform Jewish home and his adoptive parents regularly attended synagogue, he was always a religious skeptic. In fact, at the age of thirteen he refused to celebrate a Bar Mitzvah. He says that his love affair with Israel is not connected with religious feelings, but with the innovative spirit of Israelis in the technology sector.
The beginnings of Larry Ellison in the world of computing
After finishing school, he entered the University of Illinois , but dropped out during his sophomore year without taking final exams due to the death of his adoptive mother. After spending a summer in Northern California, he enrolled at the University of Chicago as a Computer Science major . There she aroused a great passion for everything related to technology.
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In 1966 , he abandoned his studies without acquiring his university degree. Then, at the age of 20, he moved to California, where he worked for companies like Wells Fargo and Amdahl . Thanks to these works he obtained important knowledge about computer science and programming.
During the 1970s , he began working at the electronics company Ampex and was commissioned to build a database for the CIA , which he developed based on an article titled "A Relational Data Model for Large Shared Data Banks. " written by computer scientist Edgar F. Codd , who is considered to be “The father of the relational model of databases” .
A technological empire is born: Oracle
In 1977 , with all the experience he had gained from his previous jobs and together with two partners, Bob Miner and Ed Oates , he decided to found a company called "Software Development Laboratories". The company started with $2,000 , $1,500 of which came from Ellison's own pocket.
Initially, the company was dedicated to consulting and custom software development, but eventually its founders decided to pivot with the goal of creating something that they could sell many times, and it was there that they saw a business opportunity in enterprise databases. .
In 1979, the company changed its name to the old name and made "Relative Software Inc" , and in 1982 it formally became “Oracle Systems Corporation” after launching its flagship product: Oracle Database, a relational database management system that enabled consumers use standardized software, thus opening the way to endless possibilities in the growing computer industry.
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“Whenever you want to invent something new, you have to always be ready to listen to people even when people call you crazy. If you want to go ahead, the only way is to find a mistake within yourself with traditional wisdom. Allison commented.
The first version of Oracle was 2; there was no Oracle 1. This version number was intended to imply that any bugs that might have existed in a previous version had already been fixed.
At that time, IBM had been working on a research project with the purpose of building a database system called "RDBMS IBM System R" , also based on Codd 's theories . This system pioneered the implementation of SQL and influenced many later relational systems.
When Ellison and Miner heard about the project from IBM , they wanted Oracle Database to be backward compatible with it, but IBM made that impossible by refusing to share the System R code .
With Ellison at the helm, Oracle began to gain ground in the marketplace by competing against powerful rivals such as Microsoft and IBM . Among his clients were mainly banks, supermarkets and airlines, although later companies from all sectors began to require his services.
Positioning itself in this industry was not an easy task, but Oracle achieved it thanks to its aggressive marketing strategies and its focus on research, development and standardization, allowing its customers to save costs and time in their business processes.
In 1984 , Oracle V3 is released , adding transaction handling through COMMIT and ROLLBACK statements .
In 1985 , Oracle V4 adds support for read consistency, and in 1986 , Oracle V5 begins to support the client/server model to join the rise of networking. That same year, Oracle went public with revenue of $55 million .
In 1989 , they launched Oracle's ERP, known as Oracle Financials , along with version 6 of the engine, which adds a procedural language, row-level locking, and the possibility of making Backup without the need to end the process.
So far, everything was going well and Oracle was growing steadily; however, in 1990 the company had a crisis that forced it to lay off 10% of its workforce (around 400 people).
One of the biggest crises in Oracle history
This crisis, which almost bankrupted the company, occurred due to the initial marketing strategy that they were following, which consisted of vendors urging potential customers to buy as much software as possible at one time. . The sales staff then reserved the value of future license sales in the quarter they were purchased, thereby increasing their bonuses.
This became a problem when future sales failed to materialize. Oracle eventually had to restate its earnings twice, in addition to settling class-action lawsuits stemming from overstating its earnings. Ellison would latterly say that Oracle had made" an inconceivable business mistake."
As Oracle struggled to survive, rivals like Sybase were taking away much of its market. The situation was quite complex, but in 1992 Ellison managed to turn Oracle on its head with the release of Oracle Database 7 and the implementation of a series of strict strategic measures.
Still, you have to reduce your cash inflow, “ If your cash is about to run out. CEOs have to make those opinions and live with them as painful as they are. You have to act, and act now; and act in the stylish interest of the company as a whole, indeed if it means that some people in the company, who are your stylish musketeers, have to work away. ” – Says the businessman.
In 1994 , the Informix company overtook Sybase to become Oracle 's biggest rival , sparking an intense war between Informix CEO Phil White and Larry Ellison . This war was front-page news in Silicon Valley for three years, leaving highlights like the time Informix put up a mocking billboard outside Oracle .
In 1996 , Sybase merged with Powersoft and suffered a loss of focus on its technology, thus beginning the decline of the company. In 1997 , Informix announced significant revenue shortfalls and earnings restatements, resulting in Phil White being arrested. The company was subsequently absorbed by IBM in 2001 .
With the defeat of Informix and Sybase , Oracle regained its dominant position in the industry and established itself as the most powerful database company in the world.
The resurgence of Apple at the hands of Steve Jobs and Larry Ellison
As a curious fact, at that time Apple Computer was mired in serious problems and internal conflicts. Even people wondered if the company would survive. Concerned about the situation, Steve Jobs , Apple founder who had been fired from the board of directors years before, invited his friend Larry Ellison for a ride to plan how to regain control of the company.
Ellison proposed that he use the assets of both as collateral to request a loan and acquire Apple completely, since at that time it was "only" worth $5 billion dollars . After the purchase, he would restore Jobs as CEO to correct the course of the company and save it. However, Jobs refused and came up with a much more elaborate plan. His idea was to convince Apple to acquire NeXT , a company of which Jobs was CEO. With his presence on the board of directors, it would only be a matter of time before the other members recognized that he was the right person to lead the company and would end up appointing him to the executive position.
Both agreed to execute the plan and events unfolded as planned. Apple acquired NeXT and shortly thereafter Jobs succeeded in removing Gil Amelio as CEO, while Ellison became director of Apple , thus marking the beginning of the resurgence of the company.
Larry Ellison's investments in the technology industry
In 1999 , Ellison's protégé, Marc Benioff , left Oracle to work at a startup called Salesforce . Ellison was an early investor in this company, putting $2 million into his friend's new venture, but when Benioff found out that Oracle was beginning work on a product that would be a competitor to Salesforce , he tried to get his friend Ellison to leave the company. Company address; however, Ellison forced him to be fired in order for him to keep his shares in Salesforce .
In 2002 , Ellison resigned as Apple 's director , saying he didn't have enough time to attend formal board meetings. By 2005 , Larry Ellison was already one of the richest people in the world, with a fortune of more than $18 billion according to Forbes Magazine . Even for brief periods of time he had managed to occupy the first place in the ranking.
In 2010 , Oracle bought Sun Microsystems , a computer services company that started around the same time as Oracle , in 1982 . This acquisition allowed the company to take control of the MySQL database manager , which today is the most widely used manager on websites and in free software applications.
That same year, Ellison began delegating his duties within Oracle , handing more responsibilities to trusted lieutenants such as Mark Hurd and Safra Catz .
- In 2012 , the successful businessman bought the entire Hawaiian island of Lanai for $300 million .
- In 2014 , Ellison finally stepped down as CEO of Oracle, handing over control to Hurd and Catz .
- In December 2018 , he joined the management of Tesla Motors , buying 3 million shares.
- In 2020 , he founded a company called “Sensei” on his island in Hawaii , through which he offers immersive programs, tourist experiences, sports activities, spa treatments, and wellness services.
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