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Good morning to all new and old readers! Here is your Saturday edition of Faster Than Normal, exploring the stories, ideas, and frameworks of the world’s most prolific people and companies—and how you can apply them to build businesses, wealth, and the most important asset of all: yourself. 

Today, we’re covering Oracle and its journey to becoming one of the world’s largest technology companies. 

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What you’ll learn:

• How Oracle became a tech giant through redirection and acquisition.

• Lessons on localization strategies, urgency, and strong leaders

Cheers,

Alex

Oracle: How the Software Giant Took Over B2B Tech

Today, Oracle is among the top twenty largest tech companies, standing tall amongst rivals like IBM and Microsoft. 

With stakes in nearly every aspect of digital B2B software, Oracle’s longstanding history of redirection and acquisition is impressive. Here’s how they did it. 

Founders Larry Ellison, Bob Miner, and Ed Oates were eager to capitalize on the late 20th-century tech boom. They met in the 1970s while working at Ampex, an electronics company. 

While at work one day, Ellison flipped through IBM’s Journal of Research and Development and found a research paper describing IBM’s relational database management system prototype. 

In the late 1970s, most large firms used computers, but only a highly trained (and expensive) professional could use them. Computer systems were massive and complex to use. This problem bred a gap that Ellison saw a chance to fill. 

Ever the opportunist, Ellison knew no other company was commercializing this technology. He showed it to two of his co-workers, Miner and Oates. 

The firm's early history is characterized by its founder’s intense learning capacity. Ellison said, “We weren't marketers. We weren't sales guys. Other than a little bit of project management, we couldn't run a large organization to save our lives. We had to learn.”

The three were likely partners, each capitalizing on differences in personality to start Oracle. Oates says, “Larry brought chutzpah. Technical wizardry, Bob Minor. Project management and knowledge of how computers worked at their core level—that was me.” In 1978, the three founders started their own firm, Software Development Laboratories (SDL). 

Their first customer and early inspiration was unlikely: the CIA, which needed a relational database. The three went to work on their flagship product, the Oracle Database.

‘Oracle’ was the CIA’s codename for the project. When the database was complete, the firm renamed Oracle Systems Corporation in 1983 to align itself with its first customer. 

As computers became popular in the 1980s, B2B customers wanted serious innovation and reliability. Oracle’s founders knew, “You have to act and act now.” Quickly recognizing shifting needs, the three designed a plan to meet demand. 

Oracle overhauled its UX experience, creating systems that simplified data management. They also made a system where data could be combined or moved, a first for the age. 

Customers noticed, and Oracle’s popularity soared. Soon, it was the go-to company for development tools and business applications. 

Before 1986, Oracle had no investors besides themselves. Their first contract with the CIA offered them $50,000, but other than that, they were self-reliant. However, keen to solidify its place among other industry powerhouses, like Microsoft and Adobe, the firm did an IPO in 1986. 

Unfortunately, Oracle’s founders’ lack of business acumen became their Achilles heel. Before 1990, the firm used an ‘up-front’ sales and marketing strategy. Salespeople urged customers to buy as many products as possible at one time. The practice padded their bonuses as they booked the value of future licenses. 

This bore a huge problem: Future sales didn’t come. The firm’s “incredible business mistake” caused a series of class action lawsuits and earnings overstatements. Luckily, Oracle self-corrected and developed a new sales model. 

Despite over a decade of success, Oracle still wasn’t satisfied with its market share. The firm’s at-the-time CEO, Ellison, is ridiculously competitive, understanding this mindset to be crucial in a hyper-competitive industry. He says, “Winning is not enough. All others must lose.”

In the mid-90s, the firm launched a warlike strike against Informix, its most important rival. But Informix’s CEO couldn’t take the heat and was later imprisoned for fraud in the early 2000s. 

Thus began Oracle’s decade of dominance. After squashing Informix, the firm’s market share grew from 14% to 41%. Out of that experience came Oracle’s next strategic shift: If you can’t beat em,’ buy em’. Oracle focuses on acquiring what they call “smaller pure-play companies... because that’s where the growth is.” 

Over the years, Oracle purchased PeopleSoft, Siebel, BEA Systems, and Sun Microsystems, allowing them to expand their products and cater to shifting customer demands. 

More recently, Oracle purchased NetSuite, a cloud company, to gain a stronghold against Google and Apple’s cloud products. 

Oracle is “addicted to winning. The more you win, the more you want to win.” Today, Oracle has $50 billion in annual revenue (2023 FY), with 17% growth year over year. 

Cloud (SaaS) yields the largest comparative portion of their revenue with $4 billion, with cloud infrastructure remaining the fastest growing of Oracle’s sectors in 2023. 

As a B2B firm, Oracle’s biggest customers are giants like Netflix, LinkedIn, eBay, and Phillips. 

In terms of marketing, Oracle sticks to what it knows, using direct marketing and direct sales outreach to target its B2B customers. The firm conducts workshops to educate customers about its offerings, which boosts sales. 

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Here’s what we can learn from Oracle about acquisition, competition, and legal strategy.

Lessons

Use localization strategies to enter and find success in emerging markets. Time and again, I’ve talked about the woes of globalization. Take Starbucks for example: The firm’s big-box strategy famously fell flat in Israel, Japan, and Australia because it didn’t account for shifting customer concerns in other markets. Starbucks isn’t the only large firm struggling to gain a stronghold in emerging markets; for many firms, these regions are difficult to conquer. On the other hand, Oracle has mastered globalization, particularly in Asian countries. Before entering Japan in the early 2000s, Ellison and his executive team conducted ruthless market research on the region’s commerce, making themselves experts. Ellison himself “owns a home in Kyoto” and frequently networked with top executives in the region to better understand their needs. This research allowed Oracle to hone its localization strategy, which is paramount to cornering the emerging, massive Eastern markets. Many firms adjust their offerings too quickly, but localization is ineffective without relentless research and an eager executive team. Even today, Japan remains a large market for Oracle; the firm has spent the last two decades building trust, an auxiliary consideration to localization. 

Use a mix of vertical and horizontal integration to gain market share. Vertical integration is Oracle’s calling card—it’s also how they became the “Apple” of the cloud. Oracle’s IT tech offerings allow them to control nearly all aspects of their business. In other words, everything is in-house for Oracle, from development and manufacture to sales. This two-fold strategy creates synergy for the brand, allowing them to govern the market effectively. It also boosts revenue, which Oracle invests back into R&D. Looking horizontally, Oracle’s acquisition strategy provides them access to proprietary software and patents: For example, their 2005 acquisition of PeopleSoft gave them a leg up in B2B software, allowing them to provide more significant HR and people management resources. In the past ten years alone, Oracle has acquired over sixty other firms, using and harnessing their technologies to expand product offerings. Their acquisition strategy allows Oracle to focus on what it does best: Efficiency and consolidation. This two-pronged strategy makes Oracle a mainstay. The firm is “addicted to winning,” and Oracle needs to be in control for that to happen. 

Maintain a constant sense of urgency—especially when responding to shifting customer demands. As former CEO Ellison says, “You have to act and act now.” There’s a reason why Oracle remains a mainstay in the tech industry, especially when its competitors come and go so frequently. A quick approach is a profitable one. For entrepreneurs and businesses, the one who gets to an idea or concept first wins. Internally, the firm enacts multiple processes to ensure quick and efficient processes; it’s up to executives to determine whether they meet a centralized goal (for Oracle, this goal is squashing its competition). Oracle employees constantly review and report their top workstreams; the firm uses a process that maintains employee focus as much as possible. All of this garners a culture of ‘today is yesterday.’ In other words, the faster something can be done, the better. As a result, the firm and its executives do everything urgently, especially regarding customer needs shifts. Time and again, Oracle addresses shifting business demands quickly, a key reason behind its dominance. 

Businesses are only as strong as their leaders. Oracle knows that a strong leader is crucial for a company’s focus, one of its hallmarks. Ellison and now his successor are responsible for thinking through the seemingly impossible and then enacting it. This is a huge ask, but for firms like Oracle, it’s essential to have leadership up to answering the call. Many firms hire executives externally, but when Ellison left, Oracle hired internally, knowing that understanding how a business already operates is paramount. Based on a wealth of experience, that leader makes effective decisions about a firm’s pivot. This is one of the most important things to take away from Oracle: A savvy leader with a strong knowledge of a business’s operations is critical for a firm’s continued success. It boils down to trust: Employees with trust in the person at the top feel more aligned and at ease with their firm’s direction.

Approach change with a clear end goal. Time and again, the firm shifts to changing consumer preferences, constantly catering to their needs. But this isn’t enough: Changing direction isn’t the goal. The goal is strategic change. For example, when the internet grew more commodified in the mid-1990s, Oracle quickly analyzed customer interests and developed an internet-enabled database system. The move was genius: Suddenly, Oracle was positioned to lead the internet technology space. When the dot com bubble burst in 2001, Oracle moved into grid computing, designing a new software that would allow firms to run databases over lower-cost hardware more efficiently. As cloud computing emerged, Oracle led the plunge, launching Oracle Public Cloud in 2011. Over the years, Oracle’s goal has been unwavering: Squash the competition. Constant change and adaptation is one of the key ways it accomplishes that goal. To that end, they acquire, sample, and research their consumers endlessly to understand what they need before they need it in the first place. Oracle isn’t reactive or responsive—the firm is predictive. Changing approaches, operations, or product offerings without adequate strategy or research is fruitless. Better yet, adapt with insight.

As former Oracle CEO Larry Ellison said, “You have to act and act now.” This week, consider how you can apply Oracle’s lessons to your work life. 

1. On urgency. 

   • Have you instilled a sense of urgency in your life and work where it may be beneficial?

   • How can you prioritize speed more?

2. On leadership. 

   • Are you a strong leader? How would others perceive your leadership? 

What are 1-2 resources you can absorb to improve your leadership? (I recommend the 15 commitments of conscious leadership).

That’s all for today, folks. As always, please give me your feedback. Which section is your favourite? What do you want to see more or less of? Other suggestions? Please let me know.

Have a wonderful rest of week, all.

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