Ellison Steps Down as Oracle CEO, but Management Team Stays

The all-purpose IT vendor reported that its fiscal 2015 Q1 total revenues were up 3 percent; net income was unchanged at $2.2 billion over Q1 2014.

Few people keep their jobs for life, except perhaps the pope, members of the U.S. Supreme Court, and those who own their own businesses and don't wish to retire.

Oracle co-founder and CEO Larry Ellison may yet remain a lifer at the corporation he has run since he started the company called Software Development Laboratories in 1977, but he changed his job emphasis Sept. 18.

Ellison, who turned 70 on Aug. 17, stepped down as CEO but will remain chairman of the corporate board and add the role of chief technology officer, which he has been doing in de facto fashion anyway for decades. Jeff Henley, who has served as Oracle's chairman for the last 10 years, was appointed vice-chairman of the board.

Co-presidents Mark Hurd and Safra Catz will move up to co-inhabit the CEO job. Catz retains her additional title of chief financial officer.

Executive Functions All Remain the Same

Manufacturing, finance and legal functions will still report to Catz. Sales, service and vertical industry global business units will continue to report to Hurd. Software and hardware engineering functions will report to Ellison, as they have for as long as the company has been in business.

In summary, the management team of Oracle hasn't changed; only the titles have.

"Mark and Safra are doing an outstanding job, and they deserve their new titles," Ellison said on the conference call with analysts and journalists after the close of the markets. "They are going to continue doing what they do; I will continue to work with Thomas Kurian [SVP, Oracle software], John Fowler [SVP, hardware] and Ed Scriven [Chief Corporate Architect] on product development as I have in the past."

The Redwood City, Calif.-based database and integrated IT systems maker also reported its fiscal year first-quarter 2015 earnings on Sept. 18.

"Our goal is to become No. 1 in the cloud and deliver record-level cash flow. We think we're doing a pretty good job," Ellison said.

The quarterly numbers supported Ellison's statement. Oracle reported that its fiscal 2015 Q1 total revenues were up 3 percent to $8.6 billion. Net income was unchanged at $2.2 billion over Q1 2014.

Cloud Business Is Gaining Traction

Cloud software and subscription revenue were improved. Total software plus cloud revenue was up 6 percent to $6.6 billion; software-as-a-service (SaaS) and platform-as-a-service (PaaS) cloud revenue was up 32 percent to $337 million. Infrastructure-as-a-service (IaaS) cloud revenue was up 26 percent to $138 million.

The company also reported record operating-cash flow, up 7 percent to $6.7 billion.

Naysayers who claim new-gen IT has passed the 37-year-old company by had better study the numbers. Oracle continues to keep pace—or stay ahead of—market competitors in the race to sell cloud software, systems and subscriptions.

"We are increasing our cloud services growth rate while simultaneously delivering record levels of cash flow," Catz said. "In Q1, our overall cloud services business grew more than 30 percent to $475 million in revenue. We are laser-focused on two goals: growing our cloud business and growing our cash flow. We're off to a good start in FY15."

The main problem spot was in hardware systems, whose revenue was down 8 percent to $1.2 billion. This is not a surprise; sales of servers, storage and networking hardware have been problematic ever since Oracle bought Sun Microsystems in 2010.

"We're your data center, we're your database company, we're your server company, we're your storage company, we're your networking company," Ellison said. "We think we have all the assets to become the one big company that can make the transition to cloud. This is our great opportunity, and we're not going to miss it."

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...