It was after reading E.F. Codd’s paper called “A Relational Model of Data for Large Shared Data Banks” that Ellison got the idea for his first product. Codd had been working at IBM on the new concept of a Structured Query Language (SQL). While successful, IBM didn’t see any commercial potential in it. Ellison, on the other hand, did.
Ellison and his partner created a database program that would be compatible with both desktop and mainframe computers. After changing the company’s name to Oracle, they released their flagship product, the Oracle database. The initial program released was called Oracle 2. Although there had been no Oracle 1, Ellison wanted to give the impression that all of the bugs of the first version had been worked out.
Oracle’s first customers were the CIA and Wright Patterson Air Force Base. The company was slowly growing, but by 1980, it had just eight employees. In 1981, the company’s future brightened significantly. IBM adopted Oracle’s SQL for its own mainframe computers. From that point on, Oracle would see its sales double each year for the next seven years. Ellison’s brainchild was becoming not only a million dollar company, but also a billion dollar company.
In 1986, Ellison took his company public. With its initial public offering, Oracle earned over $31.5 million. But, the young company, backed by its equally young staff, almost came to the brink in 1990. For the first time in the company’s history, Oracle posted losses and was forced to layoff close to 50% of its workforce. In what Ellison would later say was “an incredible business mistake,” Oracle released flawed financial statements and overstated its revenues, which would eventually wind the company up in court.
After having settled numerous class-action lawsuits, Oracle came close to bankruptcy. It’s market capitalization fell by 80% and many industry analysts wrote off the company entirely. However, Ellison remained committed to his business. He replaced most of his original staff with more experienced managers, admitting that the company would need help if it was going to stay afloat.
For the first time, Ellison left the business management to the professionals and concentrated on what he did best – product development. In just two years, the company would recapture its title as a leader in the industry, with Ellison’s newest version of the database program a success. Oracle’s success steadily increased throughout the 1990s. In a single quarter of 2000, Oracle’s net profits increased by 76%. Today, most of America’s major banks, airlines, and retail companies depend on Oracle’s databases.
Ellison is also a thrill-seeker in the world of sports, as an avid participant in boat races and mountain biking. Despite requiring major surgery for his injuries, Ellison continues to race his 452-foot yacht – the fourth largest in the world. He has attempted to buy both the Golden State Warriors and the San Francisco 49ers, but was turned down both times. Known for his flamboyant and costly lifestyle, Ellison has created a company whose wealth can sustain even his wildest dreams.
The Wisdom of Oracle: Ellison Hits the Jackpot
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