Wednesday, August 14, 2013
Self Serving Prophecies - a Larry Ellison specialty.
Here are four - when Apple was relieving it self of the Pepsi, German and Italian CEOs who did not understand the company, Ellison proposed to acquire the company for a song. Fortunately, the Board at the time, which had had a strong of horrible CEO choices (John Sculley who thought designing technology was similar to designing Pepsi cans; then the board hired Michael Spindler - no not the guy who created Spindler's list - who is a short footnote in the lore of the Silicon Valley; then the board lurched again to hire Gil Amelio - who seemed more capable of writing a very bad autobiography than managing a technology company) ultimately figured out that Steve Jobs could come back and within a short period of time rebuilt the company. Ellison's "rescue" was rejected and the rest is history. Ellison did not want to rescue a California company but to pick it up for a song.
A second one about the same time was his blathering about network based computers. One could argue that with the expansion of the cloud that he was simply 15 years early in his call for dumb terminals. But that would be overly kind. Almost every modern device is connected to the cloud. But unlike the vision which Ellison proposed - those devices are not dumb but use the intelligence of the network in new ways. Ellison's thoughts may have ultimately proven correct but one must not forget that a good deal of his original speculation was based on the assumption that Oracle in this new world would be a controller of much of the data that went through those dumb terminals.
Ellison is also is responsible for the rejiggering of the America's Cup. The design specifications for the current series make the competition (which was already expensive) outrageous in cost producing very fast yachts which are also a bit hard to handle. One wonders whether Ellison thought this new design would guarantee him the America's Cup once again or whether he just did not care about this historic race.
But then Ellison sounded off about whether Apple could survive without Steve Jobs- remember his earlier gambit where he tried to acquire a company he allegedly hated - in an interview on Charlie Rose. Apple has been slower in this round ASJ (after Steve Jobs) in producing new innovations. In the earlier period when Ellison tried to acquire the company BSJ (before Steve Jobs) their innovation cycle was a bit off pace. But there are differences. First, the market for tablets and smart phones began to change when they both became dominant platforms in their arenas.
While the market continues to expand the need to get a new phone every few months is no longer as strong as it once was. The key and simple fact is that IOS users have a much higher attachment rate than Android users to keeping up with the operating system. As noted in a much earlier post - Android users operate on a variety of platforms while IOS users are predominately on the same platform. That interoperability among devices is important and useful. Apple will address the need for a less expensive smart phone and if the projected September 10 announcement on a new phone and a final version of IOS 7 is realized and it is followed up by an upgraded tablet set (full size and mini) then Apple will be in fine shape.
As we saw in the America's cup leadership it is not clear what Ellison was trying to accomplish - to add something or to cement his own position in the competition. The same can be said of his pronouncement on the future of Apple (both before and now).