Larry Ellison says long-time and now former Oracle president Charles Phillips told Ellison 10 months ago that he wanted to leave the company. Ellison further says he asked Phillips to stay through the Sun acquisition, and Phillips agreed.
In that context, Phillips got what he wanted while also helping Oracle manage through one of its most transformative acquisitions, and doing so in a manner consistent with his 7 years (or "29 quarters," as he put it in his brief farewell statement) at the company.
I'd like to believe that. But it smacks of too many coincidences. And in matters of this sort, I don't believe in coincidence. Like most people, I do believe in facts—and here are a few to consider:
FACT: Early this year, Oracle's other president, Safra Catz, indicated in public comments that the Sun integration was zipping along, aided by the 9 months of limbo Oracle endured while the European Union dragged out its approval of the Oracle-Sun merger.
By Oracle's own statements, the heavy-lifting portion of the Sun integration was completed months ago. So why didn't Phillips—who asked to leave in December 2009, according to Ellison—take off sooner?
FACT: Just seven weeks ago, Phillips endured a stunningly public rebuke from Oracle over his comments, made at an industry event, relating to an M&A war chest he said Oracle had assembled for the next five years.
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Not only was the company's clarification of Phillips' remarks condescending and starkly personal, but it was attributed to the head of Oracle PR, who at the time reported up through Phillips in the organization. I believe the remarks came from Ellison himself, and that he was so miffed that Phillips either (a) was just plain wrong on a very sensitive matter, or (b) made an accurate statement but wasn't supposed to talk about it publicly, that Ellison wouldn't even deign to connect his name to the public tongue-lashing of Phillips.
Here's part of the comment, which is unlike any I've seen regarding a sitting executive from his employer:
"Oracle does not have a five- year acquisition budget. We don't even have a one-year acquisition budget. While it is highly unlikely that we will spend anything approaching $70 billion in five years, we will be opportunistic and . . . . " blah, blah, blah. To further humiliate Phillips, the statement did not even mention him by name—it referred simply to an Oracle executive.
FACT: In Monday night's press release welcoming Mark Hurd as Oracle president, the company's other president, Safra Catz, offered this comment on Hurd: "I look forward to working with him for years to come. As Oracle continues to grow we need people experienced in operating a $100 billion business." Splitting hairs for a moment, HP had reached revenue of $125 billion under Hurd, and surely a businesswoman of Catz's stature knows that. So why the allusion to "$100 billion"—and the specific point that Oracle needs people who know how to run "a $100 billion business"? Seems obvious that Catz is saying Oracle's long-term objective is to reach that plateau.
But Oracle's growth over the past 7 years has come mostly from acquisitions, so in order for it to approach even anything close to the $100 billion tossed out there by the very disciplined Catz, acquisitions—lots and lots of acquisitions—will surely be a part of the mix. And they'll be expensive because closing the gap between that $100 billion target and Oracle's fiscal 2010 total revenue of $26.8 billion will be costly.
In the public comment that earned him the woodshedding, Phillips said Oracle's M&A war chest for the next five years would amount to about $70 billion. I'll bet that in September 2015, that number will look pretty good.
FACT: A marketwatch.com news story that came out on Monday before the formal announcements of Phillips departure and Hurd's arrival notes that Oracle very recently stripped from Phillips his responsibility for global business units, leaving him with oversight for only sales and marketing: "Phillips, who remains an Oracle co-president along with Safra Catz, was replaced as the head of global business units by Bob Weiler, a former CEO who came in via an Oracle acquisition, Hunter said. Weiler is the former CEO of Phase Forward, a developer of applications for life sciences and healthcare acquired by Oracle in April for about $685 million. The change leaves Phillips responsible only for sales and marketing, Hunter said. . . . An Oracle spokeswoman declined to comment and noted that Phillips is still co-president and a member of Oracle's board of directors."
Again, if Phillips were looking to leave as Ellison had stated, why the petty politics in his final days? I mean, we know Phillips graduated from the United States Air Force Academy and then became a captain in the United States Marine Corps, so clearly he's not afraid to take some big hits for the team.
But this slow and undignified and pointed death-by-many-cuts treatment just doesn't strike me as the way a company would treat a top-level executive who'd done so much for the company in 7 years on the job.
FACT: Ellison says that 10 months ago, Phillips expressed his desire to leave. Ten months later, Phillips is still with the company. Then Mark Hurd suddenly becomes available, and then Charles Phillips suddenly leaves. What a coincidence.
In closing, two numbers, and then two thoughts:
In Phillips' seven years with Oracle, it acquired 66 companies and evolved from a large database company to the world's largest business-software company with strong presence in databases, middleware, horizontal applications, and vertical-industry applications.
Shortly after Phillips joined Oracle, it posted annual revenue of $10.2 billion for fiscal 2004. Three months ago, it posted annual revenue of $26.8 billion for fiscal 2010.
Parting thought #1: I still don't believe in coincidences at this level.
Parting thought #2: Mark Hurd better watch his back.
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Bob Evans is senior VP and director of InformationWeek's Global CIO unit.
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