It is an interesting case of blinders when one considers Oracle. While Oracle was quick to enter the business applications market in the 90s, buying Siebel as well as developing their own products, they started missing the mark fairly quickly shontly thereafter.
A recent article https://www.cnbc.com/2019/12/05/oracle-shows-buybacks-can-go-too-far.html discusses Oracle buyback frenzy and how it is leaving the company with net debt. There is really only one reason for that–they were Hurded.
Mark Hurd ran the company as co-CEO for a long time. Unfortunately, Hurd rips apart companies, with an eye on financials, but without an eye for doing anything useful in the marketplace. He proved that time and time again. First at NEC, Teradata, HP, then at Oracle. Hurd was good at understanding financials and I think that’s critical and good. He was horrible, always, at understanding what makes a company tick and missing big trends. He’s missed them all his life–totally blind. Mostly, he propped up a company playing with financials while undermining its core–the companies would falter after he left and he always left. Hurd would make a good 2nd in command, just not a 1st in command.
With Ellison mostly retired (now un-retired), Ellison was out of the loop of the marketplace. He’s been mostly a one-trick poney so far–a good trick that has its place of course. But not a trick that takes it to the next level. That’s why Microsoft finally got rid of its self-limiting ponies as well as, recently, google. I’m still amazed that Ellison does not understand the damage Hurd did at Oracle.
At Oracle, like HP, Hurd scared away deep, technical talent. A short-term focus on financials meant that Hurd was missing the market signals. Oracle is missing the largest IT transformation story in the history of IT–cloud computing (private/hybrid/public)–because he scared away the talent that understands the change. Locked in with just a focus on financials, he completely misread the trend. Underinvested and undercommitted in multiple ways, Oracle’s transformation story to prepare itself for the next decade is sorely lacking. If you are going to take on debt, at least do it to help you become more competitive.
I own Oracle stock and I want it to succeed. I am hoping that it does not fall into a death spiral and sold off. The marketplace needs more competitors sooner. They need to replace the senior leadership team with a new “Ellison” (Ellison was good in his time). The focus needs to be on customers and improving their interactions with them. You can see a steady stream of awful sales executives leave Oracle, bounce over to IBM and HP, then bounce around again–all while delivering little value. Sales executives who learned truly terrible behaviors at Oracle replicate their poor behaviors elsewhere while not delivering–just look at S. Cook who has bounced around at Oracle, HP, IBM, MicroStrategy et al.
Let’s hope Oracle succeeds at becoming competitive again and can direct itself to the next level.