Wednesday, October 24, 2018

Oracle CEO: What’s In Our DNA Deeply is to Build for the Future

Oracle CEO Mark Hurd says that because they have a founder like Larry Ellison they are focused on generational changes. “At the end of the day what’s in our DNA deeply is to build for the future,” said Hurd.

Mark Hurd, Oracle CEO, discussed Oracle’s growth strategy in an interview earlier today:

We have a technical strategy. It’s very important in a technology company that you have a technology strategy. When you listen to companies that say here’s our strategy, produce a lot of cash flow, buy back stock, increase our dividend… that not a technology strategy.

Lead in Cloud Applications and Database Technology

Our strategy is to lead the applications market as it moves to the cloud and lead the movement of database technology as it moves to the cloud. I think our strategy is irrefutable. That said, almost everything in our company is at some stage in transition, moving from the old model to the new model. The company is going to grow its revenue and applications is just one example of that.

Our DNA is to Build for the Future

When you have a founder like Larry Ellison he’s very focused on generational changes. It doesn’t mean he doesn’t care about Quarter or care about our year, but at the end of the day what’s in our DNA deeply is to build for the future.

We have in some cases given away revenue that we could have had in the interest of moving our business to where we think the market is headed. If our sole objective was to grow our revenue on a quarterly basis we wouldn’t have deemphasized many of our businesses in order to pursue where we think the market is headed years from now.

If we Were Only Focused on the Short-Term Numbers…

We wouldn’t have made the applications transition. Our applications business is now in aggregate growing double digits. We could have stayed on the old model and probably had some short-term growth better than we had when we went through the transition. But it wouldn’t be where we want to be five years from now.

We’ve pretty much played the long game at every chance to move to where the market is headed. It will result in long-term revenue growth as our legacy businesses as a percent of our revenue goes down.

We Have No Business in Oracle Growing at the Rate of Oracle

We have no business in Oracle growing at the growth rate of Oracle. We have businesses either growing 40 percent or declining 30 percent and as you mix them up you get to the result of Oracle.

As those businesses become a smaller part of our total and the growth businesses become a bigger part of the total revenue will grow. One thing you can say when you look at the numbers is that when we hit revenue growth we know how to turn it into cash flow and earnings.

There Will Be Extreme Growth for Us

Executing the applications strategy, moving our customers, and then taking other peoples customers into the more modern world of SAT, there will be extreme growth for us. The ability to move our database to Gen 2 Oracle cloud infrastructure and Autonomous Database is actually more growth opportunity than the applications business. Just executing those two things is huge for us.

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