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July 3, 2000
A New 3-Headed Second Tier at Oracle
By JOHN MARKOFF
President's Departure Is Called Unrelated to Snooping on
Microsoft
AN FRANCISCO, July 2 -- Who's
minding the store at Oracle?
First, there was last week's clamorous
disclosure that the software giant had paid a
private investigation service to gather
information about Microsoft allies. Then on
Friday came the abrupt resignation of the
company's president, Raymond J. Lane -- a
move the company said was unrelated to
the investigation controversy.
In any case, the day-to-day operation of
Oracle is now in the hands of a troika of
executives who report directly to Lawrence
J. Ellison, the company's flamboyant and
mercurial founder and chief executive.
In an interview over the weekend, Mr.
Ellison cited these three executives as key
members of his executive team: Gary L.
Bloom, 38, Oracle's top marketer and
executive vice president; Jeffrey O. Henley,
54, the chief financial officer; and Safra
Catz, 38, Oracle's highest-ranking woman
and a former investment banker who is now
an executive vice president.
Mr. Henley and Mr. Bloom have both been
with the company for a decade, and Mr.
Bloom in recent months had been assuming
more and more of the departing president's
duties. Ms. Catz was at Donaldson, Lufkin & Jenrette before joining
Oracle last year.
Mr. Ellison said that Mr. Lane would not be replaced.
Although acknowledging that the timing of the announcement was not
ideal, Mr. Ellison said that the resignation of Mr. Lane, 53, a former
Booz Allen & Hamilton executive who was widely credited for having
helped rebuild Oracle during the last eight years, had nothing to do with
the Microsoft controversy.
"This was just a good time for this transition," Mr. Ellison said in a
telephone interview. "We have been planning Ray's departure for several
weeks, it was related the end of our fiscal year."
Whatever the appearances of upheaval, Oracle, of Redwood City, Calif.,
the largest database software company, is on a roll, having capitalized on
the Internet commerce boom the last two years. On June 20, the
company announced strong earnings gains in its fourth fiscal quarter.
Excluding investment gains, Oracle reported earnings of $926 million, up
76 percent from similarly adjusted income of $527 million in the period a
year earlier. Revenue rose 17 percent, to $3.37 billion.
"This is a good time for Oracle to have this happen," Roger McNamee, a
director of Integral Capital Partners in Menlo Park, Calif., said of Mr.
Lane's resignation. "Larry Ellison has surrounded himself with a great
team and a deep team."
The timing of Mr. Lane's resignation nonetheless raised eyebrows. The
company chose to issue a news release announcing Mr. Lane's departure
at 6 p.m., Pacific time, on Friday at the start of the long Fourth of July
weekend. The news release offered no reason for his resignation, and
Mr. Lane could not be reached for comment over the weekend.
But David J. Roux, Oracle's former
executive vice president for corporate
development, who is now a general
partner at Silver Lake Partners, an
investment firm in Menlo Park, said it
was unlikely that Mr. Lane's
departure indicated any split or
dispute with Mr. Ellison.
"Oracle is very much Larry's company," he said. "One of the reasons that
Ray was so effective and well-liked was that he was never confused
about the core fact."
Mr. Ellison said that Mr. Lane had been on vacation last week when the
company made the surprise disclosure that it had paid for a covert
investigation of several Microsoft lobbying groups. He said he and Mr.
Lane had not talked about his decision to publicly defend the spying
effort on Wednesday, at a news conference where Mr. Ellison told
reporters he thought that his company was not arrogant but rather had
performed a "public service."
Mr. Ellison said that he did not know Mr. Lane's future plans but added
that Mr. Lane had a new family, with one young child and a second on
the way. He said Mr. Lane, who will remain on Oracle's board, had
made more than $2 billion in the increased value of Oracle stock since
joining the company in 1992.
He also noted that most of Mr. Lane's responsibilities at Oracle had
already been shifted to Mr. Bloom, the executive vice president who also
has responsibility for product development.
For his part, Mr. Bloom said in a telephone interview on Saturday: "My
own role has evolved over time and I'm quite comfortable with it. There
are a number of organizations that have been shifted from Ray's to my
responsibility -- including the partners program; the education business,
which is a $500 million business; as well as worldwide support and
worldwide marketing."
It was Mr. Bloom who took responsibility for introducing a new version
of the company's Internet Application Server 8i, which came out on
Wednesday. The software, crucial to the e-commerce operations of
many businesses, has become one of Oracle's most important products.
Alongside Mr. Bloom and Mr. Henley, Mr. Ellison said that Ms. Catz,
who had been a managing director at Donaldson, Lufkin & Jenrette, was
playing an important role at Oracle.
He noted that Ms. Catz had helped build Softbank, the Japanese
company founded by Masayoshi Son, but joined Oracle because she
was tired of the extensive travel required by her work as a banker.
"She's great," Mr. Ellison said, "But she doesn't like public attention.
She'd be upset if she heard I was telling you about her."
As for Mr. Lane's abrupt resignation, another former high-ranking Oracle
executive said Mr. Lane might have simply felt that his eight years at
Oracle under Mr. Ellison's mercurial leadership was enough time served.
"Eight years in the saddle with Larry," he said, "is a lot of time out on the
range." |
