A Solid Foundation
Continued
PROFIT: How has Oracle been able to retain its strong relationships with customers during the industry upheavals?
HENLEY: When the internet bubble burst in 2000 and the economy slowed and the stock market imploded, from a customer standpoint we did very well, because we had already been cutting costs because of our globalization work. So we weren't caught having to make huge layoffs or anything like that. Nobody was nervous about Oracle's viability because our profits were still very strong relative to the rest of the industry. A lot of companies—smaller players—saw losses, or big drops in profits.
From a customer standpoint, I don't think there was any concern about our viability because we remained very strong financially. The important thing we pointed out to customers is that in every quarter, we kept adding R&D people. We said, "Look, we've obviously had to readjust like everybody, and our profits aren't quite as good as they have been. Our revenue actually dropped for a little bit, but we think this is temporary. We think the business will come back, so we're going to keep investing." It was a great opportunity for us to show ourselves as a truly safe choice. And obviously, in hindsight we were right, and when the business came back and revenue and profits started growing, those investments really paid off for us.
PROFIT: What do you think it is about Oracle that drives the company to increasing levels of innovation?
HENLEY: One of the big benefits of Oracle is that the database is such a strong product, and so financially powerful, that it gives us the strength to invest in other things over time and not be afraid to take the risk of getting into new areas. We've continued to innovate in all of our product lines. We've acquired very innovative companies, and at the same time the people within our development teams have continued to be very innovative. In our database, our middleware stack—we can show a long history of innovation, and as we've grown stronger financially we've been able to power more innovation.
Another part of it is that Larry Ellison is an entrepreneur and a risk taker. Oracle, in my opinion, isn't as ossified and bureaucratic as some large companies can become. I attribute a lot of that to Larry, because he fights bureaucracy.
Also, once Larry found a way to do acquisitions so that they would make financial sense for Oracle, that was another way to foster more innovation. No software or technology company has the lock on all the good ideas. We have a lot of good people, but so did PeopleSoft, so did Siebel, and so do all these different companies we've been buying. The trick is not driving off those people, but figuring out how to make them feel at home and how to actually listen and get good ideas from them.
PROFIT: Going forward, what do you think is the biggest challenge that the company faces?
HENLEY: We have a great strategy, so if we execute right, I think we're going to do really well. We have a good record of success, but I don't think anybody feels like we're done yet. People aren't resting on their laurels. As much as we respect our competition, we really think we have the right strategy and can differentiate ourselves. We just have to work hard and execute.
For More Information
Find out more about Oracle's past and its future plans. Read part one of the Oracle 30th anniversary coverage at
oracle.com/profit/mag/profit_may_07.pdf.
Margaret Terry Lindquist is editor in chief of
Profit magazine.
