Speaking to reporters here yesterday amid this postcard of a backdrop, Ellison seemed relaxed and content--understandable considering his database company is basking in the Wall Street glow of blockbuster second-quarter results that sent the company's stock soaring into the 90s, up from 52-week lows in the 20s per share.
Ellison's talk spanned beyond Oracle stock prices and database sales, touching on the role of philanthropy in Silicon Valley, life and death, and a well-worn Ellison rant against his arch rival, Microsoft chief Bill Gates.
Ellison's living space is modern, decorated minimally with leather couches, an indoor rock and plant garden, a piano and a classical guitar on a stand. Though not as rich as Gates, Ellison, as of today, checks in with a net worth of about $41.5 billion. He ranks among the country's top five wealthiest CEOs, along with Gates, USA Networks chief Barry Diller, Dell founder Michael Dell, and RealNetworks chief Rob Glaser.
But it is Gates who has been Ellison's target. Ellison, who is on Apple Computer's board of directors, blames Gates for the fate of Netscape Communications, which Microsoft has all but beaten in the competition for consumer use of desktop Web browsers. Ellison advocates breaking up Microsoft into three companies that would be led by Microsoft executives who would divvy up company assets, including Office 98, Windows 2000 and Explorer, and host a lottery for all programmers.
"Like the NBA draft--you'd have three leaders of these companies and they'd draft their programmers," said Ellison, who sat with reporters in a spare meeting room at the bottom of a spiral staircase.
Balking at the idea, Microsoft spokesman Jim Cullinan said a break-up would be of no benefit to consumers and would not help competition or build innovation. He added that Netscape, now owned by Microsoft rival America Online, continues to grow and compete against Microsoft in the browser market.
Asked about philanthropic responsibilities of Silicon Valley's richest executives, Ellison said he doesn't believe they collectively "have an obligation to do anything," though he contended there is "a great sense of joy in giving."
Ellison said many of his donations have been toward medical research and in the form of investments in bio-tech companies, including one Israel-based firm, Quark Biotech, which is researching how to combat the ravages of chemotherapy by protecting healthy cells during treatments.
Commenting on Gates' recent pledge with his wife, Melinda, to donate about $15 billion this year toward funding everything from libraries and scholarships to vaccinations for children, Ellison said, "This is not a 'who gave the most money' competition."
He said philanthropy should be about solving problems such as illnesses or disabilities rather than throwing money at societal woes.
"We need to use wealth and cleverness to solve these problems," he said.
With talk of medical research, Ellison also fielded a question about his own mortality.
"I try not to dwell on mortality," he said, as a view of sailboats dotted the bay. A year ago Ellison faced the possibility of his own death during the December 1998 Sydney to Hobart Yacht Race. Ellison, owner and skipper of the 80-foot Sayonara, said his life was threatened when a storm turned into a hurricane, taking the lives of six sailors from other vessels.
"I went below the deck to get some sleep," he said. "I knew the boat was beginning to fall apart."
Though Ellison said he makes no New Year's resolutions, he did restate a long-term goal: To have Oracle be the No. 1 software maker in the world.
Oracle holds about 40 percent of the worldwide database market and is the second largest business applications maker behind German software giant SAP. But while SAP and other competitors have struggled with financial woes and the toil of Internet-enabling their software, Oracle, buoyed by database growth, earned 26 cents per share in the second quarter, beating Wall Street expectations of 22 cents a share, on earnings of $364 million, up 40 percent from last quarter.
Frank Gillett, analyst at Forrester Research, questioned whether Ellison should be concerned about being the No. 1 software maker, arguing the company instead needs to focus on changing its business model as the Internet makes software licensing less relevant.
"It's a silly game" to want to be the No. 1 software maker, he said. "The more interesting question to ask is how they can evolve their business model away from standardized software like databases and applications like [customer resource management] and towards software and services that delivers a solution and value proposition."
Mark Murphy, a financial analyst at First Albany, said Oracle has a good shot at sustaining second-quarter growth by banking on the Internet. About three years ago, Ellison ordered his developers to revamp the company's applications to work on the Internet. The company has since expanded that strategy to include software rental, software to manage sales and marketing, and marketplace exchanges and software that its customers will use to buy and sell goods and services online.
"Larry made a long-term, high-stakes technology bet that people would want their applications centralized and run them over the Internet," Murphy said. While the company still doesn't have all the pieces together, "They're way out in front of everyone else."