Software industry top slots rife with Oracle alumni

When Oracle launched its $5.1 billion (€4

When Oracle launched its $5.1 billion (€4.43 billion) hostile bid for PeopleSoft, its aggression can have come as little surprise to Mr Craig Conway, chief executive of its target, who had every reason to know how Oracle and its flamboyant founder, Mr Larry Ellison, like to operate.

A former senior Oracle executive, Mr Conway knows his adversary well - and he is not alone. The bid highlights a little-appreciated fact about the US software industry: it is rife with Oracle alumni.

Just as alumni of General Electric or Procter & Gamble can be found in management positions in many companies, Oracle has become a crucial training ground for successful careers in software.

"Oracle's culture is very driven and it encourages aggressive marketing and sales behaviour which has served it well in the past. These qualities are sought after by other companies," says Ms Betsy Burton, a senior software analyst at Gartner, a US market research company. That hard-driving culture was clearly established by Mr Ellison.

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Several of those who have worked with the Oracle chief executive in senior positions have gone on to create or lead some of the largest software companies in the world.

These include Mr Tom Siebel, who in 1993 founded Siebel Systems, a leader in sales automation software; Mr Gary Bloom, head of Veritas Software, the leading storage software company; Mr Marc Benioff, founder and chief executive of Salesforce.com, a provider of online sales automation applications; and Mr Conway himself.

Others have gone to work in senior management positions at SAP and many other software companies.

Mr Ellison has often mentioned his pride in the number of Oracle alumni in senior management positions within the industry and has compared Oracle with the best business schools.

When Mr Bloom left in November 2000 after 14 years at Oracle, Mr Ellison said: "Dozens of companies in the \ Valley are now headed by Oracle alumni.

"There is no better proof of the quality of our people, or the strength of the training they get at Oracle."

Mr Bloom says he is not typical of the Oracle culture, however. He tends to shy away from the public spotlight, which Mr Ellison and other former Oracle executives usually relish.

Moreover, he has no exotic hobbies such as those of Mr Ellison, who flies jet fighters and battles in the Americas Cup sailing contests.

In an interview with the Financial Times shortly after his appointment to Veritas, Mr Bloom said: "I represented a counter-culture at Oracle. I was in charge of a large division and my way of management was different to Larry's way."

A striking measure of a senior Oracle alumnus's worth is the effect of his or her departure on the share price. Mr Bloom recalls that when he left Oracle, he received a phone call from Mr Ray Lane, the former company president who left in July, 2000.

He was calling to complain that Mr Bloom's departure had caused an 18 per cent fall in Oracle's share price; his own departure had prompted a decline of less than 5 per cent.

Mr Lane, unlike many of his colleagues, decided against joining another software company. Instead, he became a partner at the venerable Silicon Valley venture capital firm of Kleiner, Perkins, Caufield & Byers, using his experience in the industry to evaluate software start-up companies.

Mr Ellison, on some occasions, has invested his own money in start-up companies founded by Oracle alumni.

He was an early investor in Mr Benioff's Salesforce.com. But despite his public statements of affection for former Oracle staff, insiders say, leaving the company "is not taken well by Larry or other Oracle staff".

At least one senior executive in Silicon Valley claims that Oracle's hostile bid for PeopleSoft "is simply vindictiveness on the part of Larry. He wants to get at Conway".

This animosity is often a two-way street. For example, Mr Conway has rarely had a good word to say about Mr Ellison, on one occasion saying he runs a "sociopathic company" addicted to lying and, more recently, comparing him with Genghis Khan.

Mr Siebel, similarly, has not had much good to say about Mr Ellison. And Mr Lane has often criticised Mr Ellison, labelling him a "micro-manager", a damning indictment of his management style.

This makes Oracle seem like a dysfunctional family of sorts, in contrast to Microsoft, the largest software group, whose executives rarely leave and where the senior ranks seem to be cloistered in the remote Redmond, Washington, area.

"Have you noticed how the senior executives all tend to speak like Bill Gates and they often use the same words?" asks Gartner's Ms Burton.

She ascribes this to Microsoft's close sense of community, rather than a "cult of Bill", as some Microsoft watchers might label it.

While Oracle is well known for its aggressive tendencies, Oracle's alumni, however, have tended to moderate their behaviour once they leave Oracle, realising that the approach does not always pay off.

And to some extent, Ms Burton points out, Oracle itself is having to change its stripes in a bid to foster a kinder and gentler image.

"I've had many clients calling me to complain about Oracle's aggressive sales tactics, and wanting to adopt alternative vendors. Oracle is realising they don't have the same dominance they once had and it's a gut-wrenching change for them to soften their behaviour." - (Financial Times Service)