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In 2004, Oracle CEO Larry Ellison took a look at software in the post-dot-com-bust era and saw an industry that was ripe for consolidation. He also saw a steadily maturing database market that was no longer going to consistently generate double-digit growth.
Furthermore, Oracle was the second-largest pure-play independent software company in the world, next to Microsoft. A man with a healthy ego, Ellison has never liked being second to anybody.
He made no secret of his plans. Ellison openly told the world that there were lots of software companies-public and private-that presented inviting acquisition targets. Oracle intended to cherry-pick the best ones to build up its portfolio.
Ellison said many public software companies would increasingly find it hard to generate the returns that would satisfy Wall Street’s expectations in the post-dot-com era. And most private, venture-funded companies would find the prospects of a big IPO payoff more elusive than ever. Ellison expected that when Oracle came calling with a buyout offer, corporate boards would listen attentively.
And so it was.
Since 2004, Oracle has acquired more than 40 companies and demonstrated that it wouldn’t shy away from a tenacious hostile buyout campaign when it pulled off the two-for-one takeover of PeopleSoft and J.D. Edwards.
The acquisitions have rapidly increased Oracle’s revenue stream and gratified Wall Street with consistently strong earnings growth. Since Oracle’s acquisition campaign began, other companies-including Microsoft, IBM, Hewlett-Packard, Google, Yahoo and EMC-have joined the industry consolidation boom.
While he is not an especially vocal supporter of software as a service-since the model competes with his established on-premises software markets-Ellison has invested significant cash in SAAS ventures. He was an early investor in Salesforce.com, founded by his former protege, Marc Benioff, and is a major stockholder in NetSuite.
Ellison’s fearless use of his company’s financial clout to rebuild Oracle-and, in the process, transform the shape of the enterprise software industry-makes him No. 1 on eWeek’s list of top 100 IT influencers.
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