INTERVIEW: Larry Ellison, Oracle's ultimate salesman

Adapt federal systems for Internet

Larry Ellison

Lawrence J. Ellison founded Oracle Corp. in 1977 after having held technical and marketing jobs at several companies, including Amdahl Corp. and Ampex Corp. of Redwood City, Calif.'not far from Oracle's Redwood Shores headquarters. And what he knows, he didn't learn in school. In fact, he dropped out of college.

Relational database technology was new in the mid-1970s, and among Oracle's first customers were the CIA and Air Force. To this day, Oracle derives a quarter of its more than $10 billion in annual revenue from sales to government.

The outspoken Ellison is a tireless promoter of Oracle software and is openly critical of competitors. He's also famous for his activities outside of work, such as yacht racing'he and a crew nearly perished in the South Pacific in 1998.

Over the past several years, Ellison has pushed Oracle from its original niche as a relational database vendor for Unix computers to a purveyor of enterprise applications as well.

More recently, he ordered a reworking of the company's products to Internet standards.
GCN editorial director Thomas R. Temin interviewed Ellison recently during the
E-Gov Conference in Washington.

GCN: A lot federal research goes into using middleware to tie disparate databases into larger virtual databases. Have agencies got it all wrong?

ELLISON: The ideal solution is to have large central databases with lots of applications publishing information into and subscribing information from them. But that's not what we have today. So how do we get from each application with its own private database to lots of applications sharing information from one big database?

To take a medical records example, the blood lab goes ahead and analyzes your blood. They not only put the results into the laboratory's database, they also take your results and store them a national database as well. Everyone knows where to find that information, so everyone who is authorized to see that information can in fact see it.

Gradually, the application becomes less and less dependent on its local database and more and more reliant on the central database, until the local database just disappears.

Then you get what is an idealized architecture: You get all the [data] in one place with all the applications surrounding it.

GCN: If such a database were to exist literally, it would contain trillions of data elements.

ELLISON: TRW Inc. provides a service for something that works exactly like this. But this is something that must be much more important than health care'it's credit. So we have a national system. TRW keeps track of all our credit records, and it does it as a service for Visa and all sorts of other folks.

So hypothetically, Oracle Corp. could provide this as an online service. It doesn't have to be a government-run agency that does this. It can be privatized like the centralized credit services.

GCN: How do you sell agencies on the migration costs from multiple databases to one? Middleware seems like a cheaper option.

ELLISON: Well, no, actually the opposite is true. It's not cheaper, even in the near term. If it were just a matter of writing a check for middleware and it's working, that would be one thing. But it's a little bitty check for middleware and 100 to one on labor to use the middleware to connect everything up.


  • Age: 56

  • Family: Two children

  • Hero: Winston Churchill

  • Automobile: Many, including a McLaren

  • Leisure activities: Yacht racing, flying

  • Major influence: Japanese culture and approach to business

  • Other interest: Biomedical research

  • The middleware doesn't really do the job. It's a little like saying, 'Gee, I bought the lumber for my house, and it's done.'

    GCN: Have you declared client-server officially dead?

    ELLISON: We declared it dead for Oracle in the mid-1990s.

    The idea that we could put applications on millions of desktop computers is a form of madness. It's not unlike the form of madness we have now, which is taking all our data and putting it in lots of little databases everywhere. It's the same lunacy.

    Fewer databases are easier to manage, and you get better information'costs less, better data.

    GCN: Service is becoming an increasingly large share of Oracle's business '

    ELLISON: Wrong. If you look at our consulting business for the last three years, it's been going down.

    We believe that our whole job is to make application systems and our database less labor-intensive.

    One of the classic rules of thumb is a 10-to-1 ratio of labor to software. We think that ratio should be 1-to-1. We're trying to change the nature of the software business and make it much less labor-intensive.

    GCN: The government has been touting its FirstGov portal. Portals are mainly collections of links, not truly transactional systems. How do agencies make the leap?

    ELLISON: I think the portal is important because it at least helps you find things. In the end, what you want is information integration not just in terms of its presentation but actually in its storage. That information should be stored together because then you can relate one piece of information to another.

    GCN: Government is supposed to buy commercial off-the-shelf products whenever possible. So it either spends 50 percent more modifying software, or vendors like Oracle create government editions of applications. Are those really COTS?

    ELLISON: Well, is a French version still COTS? The government version and the commercial version probably have 90 percent in common. Just like we adapt our accounting software for Italy, we adapt our accounting software for the government.

    Companies make the same mistake. One company spent four and a half years to do an installation, making heavy modification to the software. Madness. So the simple notion is who should finish our software?

    Government shouldn't ask the question, 'How have I done business for the last 50 years?' and say, 'Oracle change your software to the way I've done business for the last 50 years.' That's a very bad approach.

    The question is: 'How do I want to do business for the next 50 years with this new technology called the Internet? And can I do a better job?'

    GCN: IBM Corp. recently got a contract through the IRS' Prime program to start migrating the service's tape-based Master File System to a relational database. Presumably they would use DB/2, but maybe not.

    ELLISON: IBM just picked up a huge contract to manage Shell Oil's data centers all over the world. But at the same time Shell Oil announced that their worldwide database standard was Oracle. It is not uncommon. I mean, IBM works much more often with Oracle than it does with DB/2.

    GCN: Government takes a lot of hits for large-scale systems deployment failures. Is government that much worse than the private sector, or are its mistakes simply more public?

    ELLISON: That's an interesting question. Industry is pretty bad. I think it's very competitive. The government has had some incredible failures. I mean, air traffic control is one of the more amazing ones. But there are some pretty astonishing commercial systems flubs. If they handed out medals, I don't think it would be all government winners.

    GCN: If you were the federal chief information officer, what would you do?

    ELLISON: I would talk about having an information architecture for the government.

    A national health records database would be one initiative. A national public safety database would be another one, where we would be providing service to state and local police agencies.

    I would put tremendous pressure on the intelligence community for collecting and storing intelligence information. I might increase the charter of one of those agencies and give it responsibility for managing this very large database, gathering the data and doing data analysis.

    I would have these superagencies gather information on behalf of several agencies. The size of the savings targets would be staggering.

    GCN: Everyone has bet on the Internet. Is there anything you worry about at night that could change everything?

    ELLISON: No, I really believe this is kind of it. The reason I believe this is the last architecture is [because] for the first time the computer network looks like every other essential network in the world, whether it's the water network, the telephone network, the television network. They're all built the same way with simple end-user devices.

    Click here for the unabridged interview with Ellison.


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