Welcome!

Recurring Revenue Authors: Elizabeth White, Yeshim Deniz, Zakia Bouachraoui, Pat Romanski, Xenia von Wedel

Related Topics: Recurring Revenue, Java IoT, @CloudExpo

Recurring Revenue: Article

Larry Says What Everyone Thinks About Sun

Oracle CEO Blasts Schwartz, Sparc, and Blogs in Interview

Reuters managed to entice Oracle CEO Larry Ellison into a rare interview and Larry delivered in turn by publicly castigating former Sun CEO Jonathan Schwartz as a raging incompetent, which will come as no news to the computer industry-at-large. It's just nice to hear it from Larry.

According to the Reuters piece Ellison met directly with Sun's technical managers "as often as four days a week to diagnose its problems, rather than delegating the work to underlings" and emerged with the observation that Sun's pony-tailed chief executive "ignored problems as they escalated, made poor strategic decisions and spent too much time working on his blog, which Sun translated into 11 languages."

According to Larry, "The underlying engineering teams are so good, but the direction they got was so astonishingly bad that even they couldn't succeed. Really great blogs do not take the place of great microprocessors. Great blogs do not replace great software. Lots and lots of blogs do not replace lots and lots of sales." Schwartz was the first CEO of a major company to blog and his example set the rest of Sun to going blog-wild.

Schwartz's predecessor Scott McNealy, who for some unknown reason handed the boy prince the reins, wouldn't talk to Reuters. Schwartz told the wire service that he couldn't talk until after August. "Until then, Larry's an outstandingly lovely, flawless man." Apparently the pig-tailed one is writing a book.

Ellison told the wire service that Sun's "management made some very bad decisions that damaged their business and allowed us to buy them for a bargain price." He did not say the dénouement started with Schwartz.

Ellison, who spent $5.6 billion buying Sun, apparently told Reuters that he found "lots of waste among the billions of dollars that had gone into R&D in recent years," that Sun "had cut back the sales staff that sold its most profitable products, including its business computers and storage equipment, causing sales and earnings to decline," that it "operated an antiquated manufacturing and distribution system," and that it "regularly sold hardware and software at a loss, sometimes losing more than $1 million on a single deal" merely to boost revenue.

Ellison also told Reuters that he had "stopped the carnage at Sun, less than four months after the sale closed in January" and expects profits from Sun to tickle Oracle's earnings this quarter, which ends May 31.

The way he stopped the blood loss was to start by shutting down "one of Schwartz's pet projects - development of the Rock microprocessor for Sun's high-end Sparc server line, a semiconductor that had struggled in development for five years as engineers sought to overcome a string of technical problems."

"This processor," Ellison told Reuters, "had two incredible virtues: It was incredibly slow and it consumed vast amounts of energy. It was so hot that they had to put about 12 inches of cooling fans on top of it to cool the processor. It was just madness to continue that project."

Sun's sales staff was also compensated on deal size, not profits. So a commission on a $1 million sale that generated $500,000 in profit was the same as one that cost the company $100,000.

"The sales force could care less if they sold things that lost money because the commission was the same in either case," Ellison told Reuters. Sun also lost money when it resold high-end storage equipment from Hitachi, storage software from Symantec and consulting services from other companies.

It also used to charter planes during the last two days of a quarter so it could book extra sales of its money-losing industry standard servers.

Ellison faults Sum for buying StorageTek for $4 billion in 2005 and then laying off all the sales people and the field service people, which resulted in sales plunging. "It's breathtaking!" he told Reuters.

With Sun under his belt, Ellison told Reuters he means to acquire other semiconductor, storage and server technologies like he's been doing in software since his hostile takeover of PeopleSoft, starting with technologies he can incorporate into his newfangled purpose-built pre-integrated factory-tuned Sun-based appliances à la Exadata.

At least two new appliances are due in September, one reportedly running Oracle's sight-unseen next-generation suite of business management programs called Fusion Apps, complete with storage and networking, and another running Oracle's middleware meant to take on IBM.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


IoT & Smart Cities Stories
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
If a machine can invent, does this mean the end of the patent system as we know it? The patent system, both in the US and Europe, allows companies to protect their inventions and helps foster innovation. However, Artificial Intelligence (AI) could be set to disrupt the patent system as we know it. This talk will examine how AI may change the patent landscape in the years to come. Furthermore, ways in which companies can best protect their AI related inventions will be examined from both a US and...
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Bill Schmarzo, Tech Chair of "Big Data | Analytics" of upcoming CloudEXPO | DXWorldEXPO New York (November 12-13, 2018, New York City) today announced the outline and schedule of the track. "The track has been designed in experience/degree order," said Schmarzo. "So, that folks who attend the entire track can leave the conference with some of the skills necessary to get their work done when they get back to their offices. It actually ties back to some work that I'm doing at the University of San...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.