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How Lawrence Ellison Built Oracle Corporation; the Second Largest Software Company in the world

Welcome to the world of Lawrence (Larry) Ellison, the flamboyant, school drop out billionaire. Who was once written off by family and friends because he dropped out of college twice. Yet, he went ahead to build one of the world largest software company, Oracle Corporation.

Lawrence J. EllisonLawrence J. Ellison was born in Bronx, New York. At nine months, Larry contracted pneumonia and his unmarried 19 year old mother gave him to her aunt and uncle; Lillian and Louis Ellison who lived on the south side of Chicago. Lillian and Louis Ellison raised Larry as their own son in their two bedroom apartment.

During the Great Depression, Larry adoptive father lost his real estate business and began to earn a living as an auditor for the public housing authority. Larry Ellison attended South Shore High School and from his early age, he displayed an independent, rebellious attitude that made him clash with his adoptive father on several occasions. At the age of 12, Larry discovered he was adopted but that was not enough to kill his ambition.

After graduation from High School in 1962, Larry enrolled at the University of Illinois. He exhibited a strong passion for math and science that earned him Science student of the year at the University of Illinois. While in his second year, Larry’s adoptive mother died of cancer and Larry dropped out of school. Larry later enrolled in the University of Chicago to pursue a degree in Mathematics and Physics but he dropped out again after the first semester. Larry’s adoptive father concluded that Larry will never amount to anything in life.


For almost eight years, Larry Ellison went from job to job working as a freelance programmer using the computer knowledge and skill he learned from his few years in college. He worked as a technician for Fireman’s Fund and Wells Fargo bank. As a programmer at Ampex, he participated in building the first IBM-compatible mainframe system.

In 1977, Ellison and two of his Ampex colleagues, Robert Miner and Ed Oates, founded their own company, Software Development Labs in which Larry Ellison served as Chief Executive Officer. Ellison had come across a paper called “A Relational Model of Data for Large Shared Data Banks” by Edgar F. (”Ted”) Codd, describing a concept Codd had developed at IBM. Codd’s employers saw no commercial potential in the concept of a Structured Query Language (SQL), but Larry Ellison did.

Ellison and his partners won a two-year contract to build a relational database management system (RDBMS) for the CIA. The project’s code name: Oracle. They finished the project a year ahead of schedule and used the extra time to develop their system for commercial applications. They named their commercial RDBMS Oracle as well.

In 1980, Ellison’s company had only eight employees, and revenues were less than $1 million, but the following year, IBM adopted Oracle software for its mainframe systems, and Oracle’s sales doubled every year for the next seven years,. The million dollar company was becoming a billion dollar company. Ellison renamed the company Oracle Corporation.

Oracle went public in 1986, raising $31.5 million with its initial public offering, but the firm’s zealous young staff habitually overstated revenues, and in 1990 the company posted its first losses. Oracle’s market capitalization fell by 80 percent and the company appeared to be on the verge of bankruptcy. Accepting the need for drastic change, he replaced much of the original senior staff with more experienced managers. For the first time, he delegated the management side of the business to professionals, and channeled his own energy into product development. A new version of the database program Oracle 7, released in 1992, swept the field and made Oracle the industry leader in database management software. In only two years the company’s stock had regained much of its previous value.

Larry EllisonEven as Oracle’s fortunes rose again, Ellison suffered a series of personal mishaps. Long an enthusiast of strenuous outdoor activities, Ellison suffered serious injuries while body surfing and mountain biking. He recovered from major surgery, and continued to race his 78-foot yacht, Sayonara, and to practice aerobatics in a succession of private jets, including decommissioned fighter planes. In 1998, Ellison and Sayonara won the Sydney to Hobart race, overcoming near-hurricane winds that sank five other boats, drowning six participants. Ellison is a principal supporter of the BMW Oracle Racing team, which has been a significant force in America’s Cup competition. His yacht, Rising Sun, over 450 feet long, is one of the largest privately owned vessels in the world.

Oracle’s fortunes continued to rise throughout the 1990s. America’s banks, airlines, automobile companies and retail giants all came to depend on Oracle’s database programs. Under Ellison’s leadership, Oracle became a pioneer in providing business applications over the Internet. Oracle benefited hugely from the growth of electronic commerce; its net profits increased by 76 percent in a single quarter of the year 2000. As the stocks of other high tech companies fluctuated wildly, Oracle held its value, and its largest shareholder, founder and CEO Larry Ellison, came close to a long-cherished goal, surpassing Microsoft’s Bill Gates to become the richest man in the world.


Beginning in 2004, Ellison set out to increase Oracle’s market share through a series of strategic acquisitions. Oracle spent more than $25 billion in only three years to buy a flock of companies both large and small, makers of software for managing data, identity, retail inventory and logistics. The first major acquisition was PeopleSoft, purchased at the end of 2004 for $10.3 billion. No sooner was the ink dry on the PeopleSoft deal than Ellison trumped rival SAP to acquire retail software developer Retek. Within the following year, Oracle also acquired competitor Siebel Systems. Ellison capped his buying spree with the acquisition of business intelligence software provider Hyperion Solutions in 2007.

BEA Systems was bought for $6.5billion, Sun Microsystems was bought in January 2010 for $7.4billion and Oracle owns a 52% stake in Net Suite worth $480million. As at March 2010, Oracle was reported to have acquired 57 companies in the last five years.

Today, the school drop out, Lawrence Ellison has consistently been on the Forbes top ten list of world richest people and he is not resting on his oars. Larry Ellison has proven to all that building a successful business has nothing to do with a college degree. All it takes is determination, dream, persistence, the right product, the right plan and the right team.

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