View Full Version : Ellison interview/profile in the SF Chronicle

05-03-2011, 11:24 AM
Larry Ellison learned to sail before he was Larry Ellison. At least the one the world knows as the swashbuckling chief executive of Oracle Corp. and one of the world's richest men.

In the mid-1960s, he arrived in Northern California from Chicago, as a college dropout in his early 20s who had been raised by adoptive parents of modest means. Drawn to what he would call the "idyllic independence" of sailing, he took a course on San Francisco Bay.

One day, clear of the eyes of his instructors, he tacked out past the Golden Gate Bridge, where steepening waves nearly capsized his small, plastic day sailer.

"I said, 'If God lets me back in alive, I will never do that again,' " Ellison said in an e-mail interview.

If all goes well, however, he will soon return to San Francisco Bay, as his team prepares to defend the America's Cup trophy it won in early 2010. In the closing days of last year, Ellison's negotiators and city officials hammered out a complicated deal that allows San Francisco to host sailing's premier regatta in 2013.

The event promises a billion-dollar boon to the local economy, with hundreds of thousands of spectators expected to pack the region's shorelines for a glimpse of some of the fastest boats ever to set sail.

But it was a controversial transaction, replete with 11th-hour demands that might have boosted city costs by millions and unquestionably left some residents feeling bitter. Such tactics, however, come as no surprise to anyone familiar with Ellison's biography.

Not enough to win
He's consistently applied the same hardball maneuvers that defined his style and success in the software industry to the world of elite sailing: spending big, ridiculing rivals and demanding that things go his way. Whether in business or sport, he's repeatedly demonstrated that, for Larry Ellison, it's not enough to win. The other guy has to lose.

In his authorized biography, "Softwar" (Simon & Schuster, 2003), Ellison admits he lacks the discipline to do things he doesn't like. The 66-year-old spent his 20s bouncing around programming jobs that he was only half interested in, but which granted him time to pursue the things he did care about, like rock climbing, kayaking and sailing.

After the high cost of maintaining one of his first boats nearly broke up his first marriage, he realized he couldn't afford that particular hobby. He sold the 34-footer he'd bought with borrowed money and stayed shore-bound for years.

During this lean period, he sometimes wondered whether his adoptive father, an emotionally reserved Russian immigrant, was right when he told Ellison he'd never amount to anything.

But in 1977, more from a desire to ensure himself leisure time than any innate entrepreneurial drive, he started his own company. Eventually named Oracle, it was one of the first businesses to commercialize relational databases, the software now standard throughout corporate America for tracking and analyzing sales.

Ellison built Oracle into one of the world's largest software companies, in part by better understanding the technology needs of businesses and in part by being more aggressive than his rivals, said Andrew Reichman, principal analyst at Forrester Research.

Ellison outspent competitors, rushed into promising new technology areas, assembled a cutthroat sales team, unceremoniously dumped underperformers and gobbled up a string of rivals - whether they wanted it or not.

Along the way, he demonstrated a knack for turning business rivalries into personal ones, relishing the opportunity to lob insults at his C-suite peers. Most recently, he suggested that members of the Hewlett-Packard board were "idiots" for dismissing CEO Mark Hurd.

"He sees where he wants to go and he does whatever it takes to get there," Reichman said.

Oracle of Redwood City, now boasts a market capitalization of $175 billion and Ellison ranks fifth on the Forbes 500 list of the world's richest people, with a net worth of nearly $40 billion.

He has thoroughly enjoyed his wealth, dropping billions to finance a lavish lifestyle. He reportedly spent $200 million on a 23-acre Japanese-style estate in Woodside, and as much again on properties around Malibu.

Four divorces
Ellison earned a playboy reputation across Silicon Valley, standing out in the land of pasty, khaki-clad nerds in his Armani suits and permanent tan.

He has been married and divorced four times, most recently wedding romance novelist Melanie Craft in 2003. Apple CEO Steve Jobs was his best man. Ellison and Craft divorced late last year, according to San Mateo County court records.

He had two children from his third marriage, David and Megan, who are both Hollywood producers.

More so than many of the high priests of high tech, Ellison indulged in frequent breaks from the boardroom to pursue his many extracurricular hobbies: flying jets, body surfing and, eventually, once again sailing.

"I am a sprinter," Ellison told Matthew Symonds, author of "Softwar." "I rest, I sprint, I rest, I sprint again."

In 1994, an Atherton neighbor reignited his interest in sailing by introducing him to maxis, then the largest, fastest class of racing sailboats.

Before long, he was pursuing the sport with the fanaticism of the born again, as if to compensate for lost time and the ego blow of being forced to sell his boat decades earlier. He was soon spending tens of millions to build vessels and win races.

A document concerning his 2000 debt, which emerged in a shareholder lawsuit around 2005, suggested he spent $194 million for a new yacht and $80 million on race efforts over a three-year period.

Backed by the best boats and crews money could buy, Ellison's teams triumphed in a handful of contests in the late 1990s, including the famously treacherous Sydney to Hobart Yacht Race in 1998. That match, however, cost more than money.

The regatta fully lived up to its "Hell on High Water" nickname that year, as hurricane-force winds and at least 30-foot swells damaged dozens of vessels and left six sailors dead.

Ellison's 80-foot Sayonara repeatedly dove from the crest of waves so steep it went into free fall for several seconds before crashing into the trough. Shaken like a cocktail below deck, Ellison vomited again and again. He later said he seriously wondered if he would die.

More than half of the boats that started the race withdrew, but the Sayonara held on and arrived into port first. A teary-eyed Ellison told reporters he would have to spend some time reassessing his attitude toward racing.

"It's been a very emotional experience to get here," he said. "This is not what this is supposed to be about."

It marked at least the third time Ellison glimpsed death at sea. In addition to his misguided venture beyond the San Francisco Bay, he broke his neck body surfing in Hawaii in the early 1990s.

But the Hobart experience didn't curb his ambitions any more than those earlier ones. In 2000, Ellison founded Oracle Racing, with his eyes set on the sport's most prestigious trophy, America's Cup.

Boardroom tactics
Ellison's willingness to apply boardroom tactics to the world of competitive sailing emerged early in the effort.

The rules of the 160-year-old race require that a yacht club sponsor each entrant. The betting money assumed that San Francisco's prestigious St. Francis Yacht Club would back the Oracle team. But the club balked at Ellison's demand that three members of Oracle Racing be given seats on its board.

"He wanted to be able to make the decisions on his own," said one person familiar with the matter. "It was his money."

The neighboring Golden Gate Yacht Club, then on the brink of insolvency, had no problem seeing that logic. So in January 2001, Ellison shocked local yachting circles by granting the scrappy little outfit the privilege of hosting his bid.

But Ellison's teams came up short in both 2003 and 2007. The Swiss syndicate Alinghi took both contests. The team was backed by its own billionaire, Ernesto Bertarelli, setting up a classic Ellison rivalry.

The Oracle team threw everything it had at the 2010 challenge, in and out of the water. That included dropping more than $100 million on the campaign.

The team constructed a space-age trimaran, the USA 17, with a 223-foot, carbon fiber wing sail that resembled an airplane wing.

More controversially, Ellison tapped Russell Coutts, formerly of Alinghi, as his skipper. That single act plunged a friendly relationship between Ellison and Bertarelli into the deep freeze nearly overnight.

Bertarelli "was afraid he was going to lose," Ellison said to an Australian newspaper, delivering the sort of taunt he might well have directed at a software executive. "He's afraid of Russell. And he thought with a fair set of rules he couldn't come up with a team" that could win.

Decisive victory
The two billionaires' teams faced off on Feb. 12 last year, lining up in the waters off Valencia, Spain, for the first of what would be two regattas. Ellison's heavier vessel trounced Bertarelli's in both, winning by 15 minutes and 28 seconds and 5 minutes and 26 seconds.

"It really had never dawned on me, or at least it had not gotten through to me, that we weren't just a team, we were the American team," Ellison told The Chronicle.

"There we were, pursuing the oldest trophy in sport, and people were chanting, 'Go U.S.A., go U.S.A.,' " he said. "I'm very proud to have represented our country."

Winning the Auld Mug also granted Ellison the right to bring the contest back to his country, its namesake, for the first time in more than a decade.

After several months of contentious negotiations with San Francisco officials, including public threats to deliver the Cup to other cities, the parties sealed a deal late last year to deliver the 2013 America's Cup to the bay.

The transaction also handed Ellison's team some lucrative, long-term development rights along San Francisco's waterfront, in exchange for spending millions to fix up dilapidated piers and other facilities.

Even some supporters of the America's Cup deal, which still needs environmental approvals, were left feeling a little bruised by the hardball negotiations and uncertain about the true costs.

'Not surprised'
"It was brutal," Supervisor Ross Mirkarimi said. "But I was not surprised, based on the reputation of Mr. Ellison."

Anyone making the observation that Ellison could have afforded to give up more to bring the Cup to San Francisco would be right - and, at the same time, would be missing a fundamental point about the man.

Those who have worked closely with him say money long ago ceased to be the driver in his life. His motivation is winning, whatever the contest, whatever the cost. Even when the battle is with the negotiators of a cash-strapped city.

"As much as Larry likes to win, he hates to lose just as much," said Bob Wynne, former head of communications at Oracle, who attended the 2007 America's Cup in Valencia. "He's driven to succeed, to win at whatever it is he sets his sights on."

It's an attitude that made him a billionaire, and won him the America's Cup. Now it might just transform the sport itself.

Under his team's rules, the boats competing during the summer of 2013 might well set speed records for the event. The next-generation sails can propel the crafts up to 50 mph as they sprint across San Francisco Bay, what Ellison calls "the most spectacular natural amphitheater for sailing that God created on this Earth."

Traditionally, the only people who could watch the America's Cup up close were those elite few who could afford an open ocean vessel of their own. By setting the event on the region's central stage, Ellison, local sailors and city officials say it will invite spectators from around the area and all walks of life, be it the monied yacht club set or the downtown bike messenger. The grand spectacle, they hope, will inspire new fans and new sailors.

"Part of his legacy to this sport will be democratizing it and bringing a whole new generation to sailing," said Lt. Gov. Gavin Newsom, the former San Francisco mayor, noting it's long been perceived as the exclusive pastime of the rich.

"Larry thinks that's nonsense," he added. "He had a love of this sport when he didn't have a dime to his name."

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/30/MNPR1J5JTJ.DTL&ao=3#ixzz1LJaxwlJb