OracleResets 47
ItsAmbitions
It’s focusing more on
databases and applications
than on infrastructureThree years ago, Larry Ellison, the chairman of Oracle
Corp., stood on a stage in San Francisco at his com-
pany’s annual OpenWorld user conference, boasting
about his cloud aspirations. “Amazon’s lead is over,” he
declared, pledging “serious competition going forward”
to become the biggest provider of cloud computing and
data storage, also known as infrastructure services. He
would make similar promises in 2017 and 2018. But now
it looks like he’s changed his mind.
Ellison spent millions of dollars to try and grab more
of the infrastructure market in recent years, hiring thou-
sands of employees, including engineers from Amazon.
com Inc. and Microsoft Corp., whose Azure is No. 2 to
Amazon Web Services (AWS). He also revamped much
of Oracle’s existing software to run on the new service.
Then early this year, layoffs began in the infrastructure
unit. It soon became clear Ellison is scaling back his
infrastructure ambitions, refocusing on Oracle’s cloud
applications and database businesses.
Infrastructure is one of three types of cloud tech-
nology the company provides—and it’s been the weak-
est. Despite the talent and backing, and even though
its product is more affordable than those of rivals, thewaitersknowhisorderwithouthimutteringa word.
“You’llkindofjusthavetowithstandperiodsoftime
wherethebusinessis gonnabevieweddifferentlythan
what’sactuallyhappeningandwhatyou’rebuildingon
theinside,”hesays.“Andsoyouhavetohavethefor-
titudeandconvictiontobeabletopushthroughthat.”
Still,Starboard’sinvolvementhascausedLevietotake
a closerlookathisstrategyandconsiderwhathecould
dodifferently,hesaidattheBoxWorksconference,not-
ingthathe’slookingatwaystocutmorecosts.
Leviereadsbusiness-managementbooksbefore
bedandreceivesmentoringfromJohnChambers,the
formerCEOofCiscoSystemsInc.,whosayshe’spro-
gressedasa leader.“He’slearnedtolistenbettertoboth
thepeoplehetrustsandagreeswithbutalsohiscrit-
ics,”saysChambers.Hedeclinedtosharehisspecific
advice for Levie, but he says the Box CEO was “very
much focused on continuing to reinvent his company,
which in today’s world you’ve got to do every three to fiveinfrastructure unit failed to win business. It didn’t have
the data centers necessary to compete with AWS and
Azure, and it struggled to persuade large clients to
spend the money to move their existing Oracle work-
loads—stored in traditional data centers—to the cloud.
Its business represents such a small share of the cloudyears.”HepointedtoLevie’s$180,000basesalary—low
bySiliconValleystandards—asanexampleofhisdedica-
tion.(Levie’stotalcompensation,includingstockoptions,
exceeds$3million.)
For Box, the question has never been whether Levie
cared enough about the company or was a serious enough
person to run the business. It was about whether his best
was enough. All of the company’s steps have failed to pro-
duce predictable growth. Levie says he still feels optimis-
tic that he, Smith, and the rest of the management team
can pull off a turnaround and meet financial targets, as
new products are expected to start delivering more sales
as soon as later this year. He says he doesn’t spend much
time thinking about what might happen if things don’t go
as planned. �Nico Grant, with Scott Deveau◼ SOLUTIONS Bloomberg Businessweek October 14, 2019
THE BOTTOM LINE Box wants to jolt its flagging sales growth and plunging
stock by becoming a go-to cloud provider for security and data management.
Activist Starboard’s entry risks distracting executives.