Business Week's guest on May 7 was Larry Ellison, co-founder and CEO of Oracle, the king of database software programs--and now challenger of Bill gates and Microsoft. With him was Richard Brandt, BW correspondent in San Francisco.
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OnlineHost: Good evening and welcome! Tonight Business Week Online has a special treat in its regular weekly conference. The Cover Story in the current issue (May 15), "Can Larry Beat Bill?", was all about Oracle CEO Larry Ellison's strategy to overtake Bill Gates and Microsoft on the Information Highway. And our guest tonight is that very same Larry Ellison. Larry's screen name is LarryEll.
Larry Ellison has been CEO of Oracle ever since he co-founded the company in 1977. His numerous honors include being named Entrepreneur of the Year in 1990 by Harvard Business School and the 1994 Smithsonian information technology leadership award. He has built Oracle into the unquestioned leader in powerful database software programs. And now he's chasing Microsoft.
Also on stage is Business Week Correspondent Richard Brandt (RLBRANDT), who is based in San Francisco and specializes in covering technology, especially software. He attended Harvey Mudd College and graduated from the University of California at Santa Barbara. Rich Brandt has been with BW continuously since 1981, except for a year off in 1990 to study at MIT on a fellowship.
The Cover Story on Oracle was written by Rich Brandt. The moderator is Jack Dierdorff (JackBW), consulting editor of BW Online. Now, on to our discussion with Oracle's Larry Ellison--and answers to the questions you send us via the Interact button.
JackBW: Good evening, Larry Ellison and Rich Brandt.
RLBRANDT: Hi, Jack.
LarryEll: Hello, Jack.
JackBW: Rich, you have the honor of throwing out the first ball.
RLBRANDT: Larry, I get the first question. Microsoft says that you can't be ahead on the I-Way. It's too early. Why isn't that true?
LarryEll: We have several running trials--Microsoft has none.
RLBRANDT: Microsoft says its TCI [cable TV system] trial «MDNM»has started.
LarryEll: Not true. We will have thousands of video-on-demand users by the end of the year. Bill--zero.
JackBW: Prtzlhead submitted this question in advance.
Question: Do you see the I-Way as a "winner-take-all" arena? Or will there be a place for Oracle, Microsoft, and other technology vendors?
LarryEll: I think that there will be one winner--just like the desktop.
RLBRANDT: Why only one? Can't there be two lanes to the I-Way?
LarryEll: Users love standards. Developers love standards. In our industry, there has always been one winner. IBM won round one, Microsoft round two. Now it is on to the video war.
JackBW: NicieJ sent this one ahead of time, Larry.
Question: Without suggesting in the least that you might be in his shoes someday soon <g>...If you were Jim Manzi, what would you do about Lotus' eroding position in the desktop software market?
LarryEll: Merge SmartSuite into Notes just exactly as he is trying to do.
RLBRANDT: Larry, how would you do a better job merging SmartSuite and Notes than Manzi has done?
LarryEll: I would lower the price and distribute the product through the Internet.
JackBW: DougR4444 has this question.
Question: Is Oracle forming any strategic alliances with the content providers on the I-Way, especially in the entertainment industry? Do you have Michael Ovitz' home phone number?
LarryEll: I spend more time with movie moguls than with programmers these days. They have better parties.
JackBW: John inDFW has a follow-up for you, Larry.
Question: Larry, if there's going to be one standard, how will Oracle become that standard?
LarryEll: By being first to offer high-quality interactive video. We have it now. Bill does not.
RLBRANDT: Bill says he will have it by the time people are ready to buy--two years or so. Too late?
LarryEll: Bill thinks that whenever he is done, then people are ready to buy--an amazing point of view. He is late. People are ready to buy now.
JackBW: Adam JF has this.
Question: Larry, what is the feedback you're getting from the multimedia community about your Oracle Media Objects development tool?
LarryEll: Oracle Media Objects is now the standard at Voyager, Time-Life Books, and many other publishers.
JackBW: RSeligma tosses this out.
Question: What will be the compelling I-Way application? Video on demand? Shopping? Information access? And when will the explosion happen?
LarryEll: News on demand. Just-in-time training on demand. Video catalog shopping. Personal communications. The explosion will happen this summer, when we release our LAN media server. We will also trial our video online service this summer.
JackBW: It's your turn for a question, Rich, sent in advance by NicieJ.
Question: A critic might argue that the story of Oracle and Microsoft is much more about corporate MIS purchasing needs and strategies than about two billionaire egomaniacs--and that the personality stuff in the story is just fluff. How would you answer?
LarryEll: I'm a billionaire egomaniac--no doubt.
RLBRANDT: The race to the I-Way is not about MIS purchasing needs. These execs have to figure out how to sell it. I'm interested in who has the better visions.
JackBW: As a longtime editor, I will defend including material about personalities. That kind of color often illuminates a company or a strategy much better than numbers.
JackBW: Larry, this may be from someone you know.
Question: Mr. Ellison, Mike Ault here, when will Oracle 8.0 be released, and will it have full multimedia capability?
LarryEll: The key is delivering the technology ASAP and then to begin climbing the learning curve. The sooner we are dealing with real users, the faster our vision will improve. Oracle8 goes to users for test at the end of this year. Production release is next year.
JackBW: DougR4444 sounds impatient.
Question: How many years away are we realistically when Blockbuster doesn't matter, General Cinema doesn't matter.. i.e. Mr. and Mrs. America can get Rambo VIII on demand in their living room for $10?
RLBRANDT: I have no idea. It seems as though it requires better lines to the home than ISDN.
LarryEll: I don't think the key application is movies on demand. Blockbuster will disappear because we buy movies on CD--not because of VOD [video on demand].
JackBW: Also, I want it for a lot less than $10 per movie.
JackBW: SmokeNMirr has this question, Larry.
Question: How will Oracle Power Objects impact folks who use Visual Basic? Are you going after the VB market share?
LarryEll: Power Objects will let users develop applications faster than VB or Borland Delphi. We are going after VB users who are building database applications.
JackBW: Joseph623 has a strategy question.
Question: Does Oracle have any plans to move into the hardware field?
LarryEll: We have designed a three-button remote control for interactive TV.
RLBRANDT: Is Oracle going to sell that remote, or do you have a partner?
LarryEll: We will probably sell the remote just as Microsoft sells mice.
RLBRANDT: How soon?
LarryEll: This summer. Do you want one? We have them now.
RLBRANDT: Yes. Does it come with interactive TV? Or is that extra?
LarryEll: Of course, you have to have Oracle interactive TV for them to be useful.
JackBW: Honcho7 has what sounds like criticism and a question, Larry.
Question: I would like to ask Larry E. what he believes are the strengths and weaknesses that Oracle has as it starts moving more and more toward the consumer market. It seems he has many good ideas, but Oracle hasn't proven that it can even communicate succesfully with the day-to-day consumer?
LarryEll: Not many companies communicate well with consumers. We are going to leverage our strength: technology to help us communicate better. We plan to be big users of the Internet and other interactive systems.
JackBW: CaryS1 has a question. Is there any answer except Oracle, Larry?
Question: Answer this: Who's going to be the winner five years from now?
LarryEll: Macintosh should have won the war for setting the standard for graphical user interfaces because they were first to the mass market with that technology. We think that we have a multiyear lead over Bill. We hope we will not make the same mistakes that Apple made in letting their technology lead fail to gain market dominance.
JackBW: MFCubster wonders about acquisitions.
Question: Are you still looking to acquire a computer maker like Apple? Or was that all rumor without fact?
LarryEll: We are working closely with Apple to develop video computers. Also, I ate an Apple I acquired this morning.
JackBW: LOL.
LarryEll: Lots of luck?
JackBW: Laughing out loud.
JackBW: PapaBiker has a language question.
Question: Will, or does, Oracle have multilingual video servers? That is, can the language be translated to another at the time the server is in use?
LarryEll: Our video server handles English and Japanese right now--other languages to follow this summer.
RLBRANDT: Chicken. What about the rumors you're buying Lotus stock?
JackBW: Now, about Rich Brandt's question about Lotus stock.
LarryEll: I had chicken for lunch--before the apple.
RLBRANDT: What about Jack's question about my question?
LarryEll: O.K., here is the scoop. We are going to make an offer for Lotus--but keep it a secret.
JackBW: Stop the presses!
RLBRANDT: You can trust me.
LarryEll: I knew I could. Thanks, guys. I could get in trouble if you said anything.
JackBW: OK, Larry, try this, from BobA.
Question: Larry, do you and Bill Gates ever talk? If so, what about?
LarryEll: We talk less and less every month. No problem, really. We are both kind of busy.
LarryEll: When we do talk, he asks how we got our video stuff to work so well. Microsoft cannot make their video server work for more than a few users. It is a huge problem.
JackBW: We'll ask him the same question if he comes on board for a conference.
JackBW: Mobile129 adds to the same area of questioning.
Question: Hasn't Bill's strategy worked before? Look what has happened to both Lotus and WordPerfect as two examples.
LarryEll: Yes--Bill will own everything. We are just doing this to provide the next target.
RLBRANDT: Bill says he'll win by coming in later with better technology. Can't he just add more PCs?
LarryEll: They are great at spreadsheets and word processors and copying the Mac for 10 years. Video innovation? We'll see. Right now they have nothing. Zero. Nada. Zip.
RLBRANDT: Bill? Are you out there?
JackBW: Larry, I'd like to hear your comments on this one.
Question: What's your view of the future of online services (including Microsoft's) with communications speeding up and Internet access going everywhere?
LarryEll: I see «MDRV»rich, I added the "I see" because the sentence as logged didn't track. ok by you? --jd«MDNM» video in the future of interactive computing of all sorts, including online services. We can do pretty good video over ISDN these days--which we will roll out selectively this summer. It is going to be a hot summer for the boys in Redmond [Microsoft headquarters]. But Microsoft will tell you we are early! Get that--not first, early. They will be first.
RLBRANDT: Are you going to sell this service?
LarryEll: We are going to sell the service--yes. It seems like a better idea than giving it away.
JackBW: DAYSAILOR has a hot one.
Question: Larry: Is your company one of those "unnamed" firms sending in briefs to the Justice Dept. against Microsoft? Come on, you're among friends, we won't tell anyone.
JackBW: And what's your view of antitrust law in your fast-exploding field? This has to be the last question, folks.
LarryEll: No. We are going after Microsoft with advanced database and video technology--not lawyers.
JackBW: That seems to be it. Thanks, Larry Ellison and Rich Brandt. And thanks to all of you in the audience. Apologies to all those whose questions we didn't have time for.
OnlineHost: Thanks to Larry Ellison of Oracle, BW's Richard Brandt, and the Business Week team for tonight's conference. If you'd like to continue the discussion, we invite you to move to the BW Online Chat Room or to post your comments and questions on the BW Online Message Boards (try the Computers & Communications category).
Transcripts of all BW Online conferences are available for downloading soon after the event (look under Special Events, Talk, or Search BW). While you're at it, explore all the features of Business Week Online (keyword: BW).
Tune in Tuesday, May 9, for a special BW Online conference. We will be honored to have as our guest Arthur Levitt, chairman of the Securities & Exchange Commission, to discuss the SEC's role as a watchdog for investors (9 pm ET, Coliseum). Plus every Sunday at 9 pm ET, Business Week Online presents a conference here in the Globe. Thanks again and good night!
Copyright 1995 by The McGraw-Hill Companies, Inc. All rights reserved.
