Larry Ellison Changes Course

You have to admire Oracle CEO Larry Ellison's ability to read trends and adapte his company's strategy as necessary.

In fact, Oracle has been on my equity strategy's selection list four times in the past year. That's a testament to Ellison's ability to keep Oracle consistently growing revenues at high rates while still outperforming the S&P on total return.

Yesterday's Wall Street Journal noted that Ellison had recently changed course and, after eschewing hardware businesses for years, suddenly pounced on the ailing Sun Microsystems. If memory serves, Ellison first tried to buy a key software business that Sun owned, and couldn't get it. Evidently worried that it would fall into a competitor's hands, and seeing his rivals begin integrating software and hardware, Ellison moved to take Sun.

He said, according to the Journal, that,

"Oracle will focus on selling such combination systems to businesses. Mr. Ellison said they will cost less and perform better than systems that use parts from different companies.....he expects systems that combine hardware and software to become a multi-billion dollar market."

One would surmise that Ellison and his executives have foresee a change in economics from having Oracle products flexibly work with various hardware systems to being cheaper by being integrated with just one hardware line.

It takes an open-minded, secure CEO to be able to see changes in trends, acknowledge them and take action to accommodate them.

Not many companies can perform as well Oracle under Ellison's leadership.