The Mind of Larry Ellison w/ Tom Dotan

Ed Zitron (0:01)

CAUSOMEDIA Hello and welcome to Better Offline, I'm your host Ed Zitron.

On August 17th, 1944, the Allied forces pushed Germany out of the south of France, and in the Bronx, a child was born that would go on to become one of the most leathery and ghoulish software orcs in the history of capitalism. I am of course talking about Archdemon and Oracle founder Larry Ellison, and today I'm joined by Tom Dotan, a wonderful writer who just had a piece published about this vile old fart in Vanity Fair. Tom, how are you doing?

Tom Dotan (0:44)

TOM I'm doing great, Ed. I really like that X-Men style Magneto intro to it.

Ed Zitron (0:49)

ED Yeah, he's like Magneto, but he kind of attracts bad debt at the moment.

Tom Dotan (0:54)

I was about to say, yeah, exactly, his superpower is a magnet for debt.

Ed Zitron (0:58)

TOM It's acquiring companies because it's funny, having you want to talk about Oracle, this is one of my favorite and least favorite subjects because I spent really the last like 10 months digging into this company here and there, but mostly on the financial side. And the thing that keeps popping up is this is a very strange company. Like they have, I think they may be one of the most aggressive stock buyback companies in the world ever.

Tom Dotan (1:24)

Yes, yes, very much so. They've been doing it for, I can't stand up that particular superlative. We should look into it, but that's been-

Ed Zitron (1:33)

190 billion or more since inception, which isn't the most that anyone's bought, but I think as a percentage of overall revenues and such, it's one of the highest ones.

Tom Dotan (1:42)

Yeah, absolutely. And it's a key part of their strategy as they've been basically using their excess cash to buy up stock and keep Larry Ellison further and further into control. I mean, that's been like a major part in why their stock has been able to be, you know, even relatively flat during the years that the company was basically floundering. So yeah, it's key.

Ed Zitron (1:59)

Yeah, it's a strange company. So how did we get, what is the actual founding story of Oracle? Because I know that they, I've read vaguely that they worked with the CIA, but how'd this get going?

Tom Dotan (2:10)

All right. So basically what happens is Larry Ellison comes out to California in the 1960s. He's a college dropout, sort of a layabout bum, moves out to San Francisco with no real plan in mind. I think he's like a river guide or something in Yosemite for a couple of years, but he has a chip on his shoulder and dreams of being rich. This is extremely important to him from an early age. And he kind of falls in with the burgeoning Silicon Valley crowd of the era. So this is like a cohort that produces Steve Jobs and Bill Gates and Steve Wozniak.

And Larry is a self-taught programmer. He works for a couple of early, early days software companies. I'm not gonna remember all of the names, but one of them has an internal project working for the CIA, providing a database, basically. Larry is very into the plumbing and database side of things.

Ed Zitron (2:59)

Which was quite boring at the time, right? It wasn't really extremely boring, right?

Tom Dotan (3:03)

Yeah. I mean, you have people, sorry, what were we saying?

Ed Zitron (3:06)

No, just keep going.

Tom Dotan (3:07)

Yeah. So you have people like Steve Jobs who are interested in the proliferation of personal technology and Bill Gates, who's interested in, I guess, I don't know, licensing software, but more or less the same kind of consumer approach. And Larry is taken by this concept of the relational database, which in very simplistic terms is basically about how you can connect one piece of data to another. And we're about to have an explosion of data as all these companies start collecting customer and other sort of specific data into these mainframes. And Larry makes this bet that databases are gonna be the future of how businesses are run. And so he's working for this company and their first client or one of their biggest clients is the CIA and the internal name for the project of the CIA software contract is Oracle.

So that's where the name comes from. He leaves that company and then he starts his own. It doesn't it isn't initially called Oracle, but years down the road, it does take that name. And their first client, the company that later becomes Oracle, their first client is the CIA.