I saw this document linked on Twitter yesterday and it's just amazing. I always knew that Larry Ellison's mug was in the dictionary next to the definition of "customer hostility", but man, it's another thing altogether to read the top 60 ways Oracle will screw you.
My favorite is how you can't use Oracle Technology Network (OTN DEV) licenses for testing. They're only for development, which is something you do without testing.
I worked at Sun in Menlo Park in the 2002 post-bubble sadness, when the satellite buildings were slowly being closed and the free coffee was being scaled back.
I remember vividly a town hall with Johnathan Schwartz as the speaker (he was briefly CEO but wasn't at the time).
One of the engineers, after hearing a speech full of buzzwords but no substance asked "Okay, but how does this actually make us money?"
The engineer was politely told to shut up, focus on engineering and leave the "making money" part to the businessmen.
There's usually a reasonable sounding justification for word or phrase misuse.
"Wreck havoc" sort of makes sense because something got wrecked and the correct "wreak" is rarely used outside of that phrase.
A "mute point" makes sense because the point is now silent and the correct "moot" is an uncommon word outside legal circles.
People who abuse power need to be "reigned in" because it vaguely sounds like they are acting too much like a king, even though "rein in" is correct and it comes from pulling in the reins of a horse to get it under control.
Just having a reasonable sounding explanation doesn't make it correct.
"As you know people, as you learn about things, you realize that these generalizations we have are, virtually to a generalization, false. Well, except for this one, as it turns out. What you think of Oracle, is even truer than you think it is. There has been no entity in human history with less complexity or nuance to it than Oracle. And I gotta say, as someone who has seen that complexity for my entire life, it’s very hard to get used to that idea. It’s like, ‘surely this is more complicated!’ but it’s like: Wow, this is really simple! This company is very straightforward, in its defense. This company is about one man, his alter-ego, and what he wants to inflict upon humanity — that’s it! …Ship mediocrity, inflict misery, lie our asses off, screw our customers, and make a whole shitload of money. Yeah… you talk to Oracle, it’s like, ‘no, we don’t fucking make dreams happen — we make money!’ …You need to think of Larry Ellison the way you think of a lawnmower. You don’t anthropomorphize your lawnmower, the lawnmower just mows the lawn, you stick your hand in there and it’ll chop it off, the end. You don’t think ‘oh, the lawnmower hates me’ — lawnmower doesn’t give a shit about you, lawnmower can’t hate you. Don’t anthropomorphize the lawnmower. Don’t fall into that trap about Oracle."
How is this different from VC tech companies with no foreseeable path to profitable where the VC backers only hope is an acquisition or pawning their money losing investments off to the public market?
The video has a text slide, but perhaps the more pertinent assertions are:
* Oracle was extremely straightforward about caring about only money. (In contrast to Sun, or even to the claims of investment banks.)
* Oracle was that way because it was the alter-ego of Ellison. (With funny bit about not attempting to anthropomorphize Ellison.)
(What Cantrill didn't mention, when alleging Ellison's simplicity, was Ellison's supposed intense competitiveness with, or hatred of, Bill Gates. I happened to bump into Ellison once, at an event, and seemed to see a hint of that firsthand.)
I linked to 34:00 min in, which is where the part on Oracle and Ellison starts and is only a few minutes long (and very funny). Bryan talks about his experiences being at Sun after it was acquired by Oracle and the sad demise of OpenSolaris.
Sorry, I don't really understand from the article: how exactly did the accused supposedly break fiduciary obligations? Does it solely have to do with Larry's previous involvement in NetSuite?
Per the Reuters article [0], it sounds like Ellison had a vested interest (of the financial variety) in Oracle acquiring NetSuite at a premium unreasonably higher than NetSuite's actual value, so that's why the shareholders are suing him.
There wont be consequences. What wework's adam did is unethical but not illegal. Same for oracle.
The difference between both however is enormous. I suspect that for in Adam wework deal(s), information hardly reached directors and certainly not shareholders.
With Oracle , everyone knew about the premium paid. And everyone , is a professional money manager and had multiple times the time to shut down the deal. They made mistake after mistake: with CEO selection, with acquisition strategy, with BoD selection, with DD, and price paid.
Shareholders were asleep at the wheel. Now they want to point fingers at someone else.
In both cases there was some unethical on behavior, but that does not make it illegal and recoverable in court
I think saying that the rent is market rate doesn’t really eliminate the transfer of value away from WeWork shareholders. First, you can’t exactly calculate market rate, and rates are normally determined by a negotiation between multiple parties. When you own a rental property, you take on a risk of vacancy while seeking tenants who pay your idea of market rate. You will face the choice of taking a lower rent vs. staying vacant and holding out for more. If Adam Neumann is getting reliably paid a healthy market rate by WeWork, and WeWork is taking the hit from the vacancies, he’s getting one over on WeWork’s shareholders. Lease obligations are going to be paid out before equity. Perhaps that’s the whole point of the arrangement.
You can connect the SV housing bubble fairly directly to pension funds piling money into tech stocks and venture capital after the late-00s global financial crisis (because bond yields were in the gutter and they're more or less obliged to seek returns somewhere, and they weren't available in less risky instruments).
Same kind of problem Berkshire Hathaway has; once you're big enough, available returns are limited by how much you yourself distort the market. Pension funds used to be able to buy almost limitless bonds in order to lock in annuity returns, but a) a bunch of them are a long way underwater and b) the effective rate of interest on bonds was below zero so they were forced to seek riskier assets, bidding up the price on those, which... etc etc etc.
Capital concentration – huge pension schemes, enormous corporations, big university endowments – has weird effects and it happens in all kinds of places.
I wonder what would be a good way to deploy that concentrated capital. Essentially, it’s the combined labor of a large pool of people, hoping that their capital will be deployed in places where it will earn great returns. What happens when these pockets of wealth don’t have anywhere to go?
Related: pensions are out of fashion in the US. Where is the wealth of young Americans going nowadays?
Rent, healthcare, etc. Some have 401k accounts, if they are lucky, otherwise you have IRAs which have an annual contribution limit of $6000, IIRC (am not an expert and am likely wrong on that point). Pensions are unavailable and housing is out of reach for most.
Most Americans don't have student debt to pay down (44million), nor a 401k (55million). Most young Americans are just trying to get by, I'd imagine "wealth" isn't a reality for most, outside of maybe emotional wealth.
There are few, if any, productive ways to deploy those huge swaths of capital that can command the risk adjusted returns those funds seek. See: negative yields on bonds across the world, and VC gambles.
If they have wealth, it’s typically going into broad stock market index funds or ETFs such as VTI, or target date retirement funds which are the same mixed with some bonds.
Probably the right thing to do given that money is concentrating in a few large companies, and the government will bail them out no matter what.
That’s where all the profit margins are in publicly traded companies due to low marginal costs, infinite scalability, low liability, and huge barriers to entry.
Even if it crashes, since so many voters are invested in it, they’ll just get a bail out at the cost of reducing value of USD. Which isn’t a problem as long as the US stays relatively powerful in the world.
I'm 38 and have a pretty good salary. About 50% after tax goes to rent, 25% goes to paying down debt inherited from getting married and medical bills (previous employer had shit insurance). The last 25% is what we live on for essentials (insurance, gas and tolls to go to work, utilities, food, etc). My wife and I have long ago paid off out student loan debt. We have 10s of thousands in high interest, unsecured debt. Debt, that in theory we could pay off tomorrow from savings. However, since most of my savings (my wife has none) is spread across 2 401ks, a Roth IRA, a traditional IRA and a taxed investment account, and I work for an investment fund, I'm subject to all sorts of lockups, retention requirements and blacklists on trades on securities held by my employer. Tl;Dr; I have savings to cover my debts, but cant legally access most of it.
I'm not unhappy that I got married, but I didn't consider the financial repercussions before I went through with it.
Taking on debt from my wife, cost of the rings, wedding was cheap, we just did a justice of the peace wedding. Also, furniture for our new place (needed more than my 1-bedroom + den apartment). Lots of little things that just kept adding on.
By using erroneous assumptions about future investment gains, corrupt investments causing losses, and governments choosing not to invest any money into the pension fund in the first place. All self afflicted, all avoidable if people would acknowledge that they don’t have the ability to predict investment returns 20+ years into the future.
> Capital concentration – huge pension schemes, enormous corporations, big university endowments – has weird effects and it happens in all kinds of places.
That reminds me of the market for exotic cars.
Twenty years ago, the market had completely collapsed. The dot com bubble had popped. You could get used Ferraris for under $100K.
Fast forward to 2019, and Bugatti is offering new cars for four million and up.
Probably just the first ones to pull the trigger. I don’t understand what the lawsuit is about though, seems like they are just complaining about performance of the acquisition? People just drunk on Oracle koolaid?
The current CEO is also a target of said lawsuit-blessing, so "execs" is a reasonable description that encompasses both (without something wordier like "current and former Oracle CEOs").
Larry Ellison owned 40% of NetSuite when it was purchased at a very high price. He effectively ran both sides of the deal (between oracle and NetSuite) and funneled shareholder money into his own pockets via the transaction. Allegedly.
> Larry Ellison owned 40% of NetSuite when it was purchased at a very high price. He effectively ran both sides of the deal (between oracle and NetSuite) and funneled shareholder money into his own pockets via the transaction. Allegedly.
It's very similar to what happened with HP and Autonomy.
Sold for $10B (3 years ago). 40% of that is $4B, of Ellison's $65B financial networth.
The amount Ellison profited from scheming
(the premium over actual value, discounted by the fact that Ellison owns much of money being spent on the purchase) seems...not big enough to matter? But his greed is unbridled?
I don't really understand when you already have billions of dollars why having more billions of dollars even matters anymore. How is more billions going to change your standard of living? You can buy two islands instead of just one? When you have so much money, how is getting more money a motivation?
Larry Ellison is a particularly greedy bastard. You could make a James Bond movie with him as the villain and nobody would notice.
He owns an island in Hawaii where the locals work for him as de facto serfs.
He has donated to two charities in his life: one to Stanford in exchange for not admitting fault in an options backdating scandal, and one to set up a charitable foundation to research ways to extend his own life.
The mission statements and internal marching orders at Oracle and his various other companies is "make lots of money for Larry". Nothing else matters, they will screw the users, screw the customers, screw the product, screw the employees, screw the open source community, screw the legal system, as long as there's revenue for Larry, the bosses are happy bacause that's all that the company exists for.
The movie version of Tony stark/Iron Man is pretty much explicitly based on Larry Ellison because they wanted to make a super hero out of one of the least likeable people possible.
Most companies at least pretend to have a mission aside from making money.
If you go to a major bank and ask "why do you exist", they'll give you a whole spiel about how they help people achieve fiscal stability, they help new businesses get established and bring new products to market, they help people grow their retirement funds, providing services so that the world can be a better place, yada yada yada.
Google will tell you "We help people find information, and we help businesses find an audience for their products, and we make pocket-size computing cheap and available for everyone all over the world, and we hope that the sum of these activities will make the world a better place"
If you go to Oracle and say "why do you exist" they'll simply say "we make money". That's it. They don't have a mission, they're not trying to make the world a better place, they just want to make money.
The idea that company directors have a fiduciary duty to maximise shareholder value is mostly a myth: it is one of those ideas that many economists like that seem to simplify things but actually can't be made to work. James Kwak has a nice article (Medium, sorry) on this
> The specific fiduciary duties of corporate directors...are common law: legal principles that have been established by courts in the process of adjudicating cases over the years. As it turns out, in Delaware, which is the state that matters—not only because most large corporations are incorporated there, but because courts in other states tend to look to Delaware law when dealing with new issues of corporate law—there are exactly two fiduciary duties: the duty of loyalty and the duty of care.
> They duty of care is basically the duty to pay attention to your job: in essence, to make decisions on the basis of reasonably adequate information. There is an academic controversy—fueled by careless uses of language by the courts—about whether the standard of conduct is negligence or gross negligence. But the point here is that the duty of care isn’t a duty to do any particular thing, such as maximize profits.
> The duty of loyalty is marginally more complicated. This duty (like the duty of care) existed in agency law—the law governing the relationship between agents, such as employees, and principals, such as companies—before corporations became widespread in the nineteenth century. There, the duty of loyalty essentially meant that you couldn’t use your position as an agent to make a personal profit—by stealing directly from the principal, via a transaction with the principal, or, in the famous case of Reading v. Regem, by using your British Army uniform to help smugglers during your off hours.
For profit companies (including public companies) can be established to pursue any lawful purpose. They are absolutely not required to make as much money as possible.
"While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires."
At that point, as far as I can tell, it's just about getting a higher score. It might feel like something more meaningful, even meaningfully greedy or power-hungry, but I think that underneath all the rationalizations it's just the thrill of making that number get bigger.
This is what a lot of people misunderstand. Very few,if any at all, people past $1B mark care about money per se. By then they would have bought the houses,the women/men, the cars,boats and whatever else they want. So all those,kind of targets, are gone.The only reason they keep doing it is because money making ( or whatever brings that money) drives them.
One curious motivation for amassing money is that your offsprings can spend it.
E.g. Megan Ellison, owner and CEO of Annapurna Pictures, a film producer and executive producer (aka a moneybag) on 35 titles since 2010, including for major directors like Coens, Linklater, Paul Thomas Anderson, Wong Kar-wai, Spike Jonze.
Also Annapurna Interactive's game Gorogoa looks pretty interesting, at least visually—haven't tried it yet.
People with that attitude would never bust their butts to get billions in the first place. Most of the people who have earned that kind of money are not the kind of people who would stop trying to earn even more.
When you have so much money, how is getting more money a motivation?
Because the more you have the higher up the scoreboard you move. If you're the 17th richest person in the world, moving into the top 10 is probably a massive motivator, and once you're the 7th richest I bet you lie awake at night scheming how to get into the top 5.
Because being motivated to make money is what made you rich in the first place? I write code for a living. If tomorrow I wake up independently wealthy, I might quit my job, but I will not stop writing code.
Speaking purely in terms of money, I think $4B is still a lot to someone who has a net worth of $65B. The litmus test for me is whether you’d notice if you lost that much. I think you would.
Was it worth it? Maybe not. Still, it’s a substantial amount.
You would notice by looking at your account balance.
When I worked as a part time cashier in the midwest, I could notice $5 missing from my account. In fact I did notice an errant $7 charge. I didn’t have to be particularly vigilant, just, there wasn’t that much money flowing through my account.
As an engineer in the Bay Area, I could miss a $100 transaction. Not saying I would necessarily, but looking at month to month finances, nothing would really look too out of the ordinary. It could fade into the noise.
Of course this has mostly to do with the amount of money flowing through accounts, but I am pretty sure that if 4 billion dollars disappeared, it would be promptly noticed. That’s still a huge net change, even if month to month finances scaled up linearly with account balance - and I don’t think they do.
Well that doesn't match how wealth on the level we are talking about works.
I guess that lots of Larry Ellison's wealth is in stocks, which are fluctuating in worth on a constant basis.
Another part of his wealth is real estate, like his Hawaiian island or land for his Japanase-style home in the Bay Area. There the value is only an estimate.
Also I assume most of the day to day handling is in the hands of an accountant and there's constant in and out of sums for paying his personal staff, buying supplies, paying maintenence of his Mig Jet or whatever goes on there.
4 billion dollars of 65 billion dollars is around ~6%. Now I'm not a stock guru but I'm betting for a fairly diversified portfolio a change of 6% is actually pretty big, and is something that is likely to happen over a fairly long period of time. As an arbitrary pick, it looks like the S&P 500 has moved +4.59% in the past 6 months.
>Also I assume most of the day to day handling is in the hands of an accountant and there's constant in and out of sums for paying his personal staff, buying supplies, paying maintenence of his Mig Jet or whatever goes on there.
I know nothing about Larry Ellison or this case, but somehow I doubt someone with $65B net worth is not paying attention to their account balances or their investment positions at all. You hire an accountant to take care of the things you don't want to or don't have time to do, but if you have that much money it is apparent that you care about how much money you have.
It is true that such an acquisition or loss of fortune would be noticed. But context of the discussion is "how much did he overpay the acquisition to put money in his pocket" So question is "Is it a difference he notices, if Oracle spent less on the acquisition?" - So if Oracle paid not 9.3, but 5B for PeopleSoft Larry got not 4, but a bit less of 2B for the deal for his account. At the same time the value of his Oracle stocks would be different (probably higher) thus the notable effect of the deal is small for Larry (but potentially bad for that sueing pension fund)
There's no much difference in lifestyle between making $100,000 a year and $110,000, but I'd sure know the difference if I lost $10,000. Either way though, at that level it's not really about the money itself.
the $4B was in cash - the 65B is in Oracle stock. he can't divest the later without having an impact on it's value
it's telling that Ellison wouldn't take stock in his own company in the transaction but rather took cash at a valuation that was 10x revenue and Oracle's largest acquisition at the time
Larry sunk a bunch of money and pride into Netsuite because he hated Marc and Salesforce so much after being booted from that company.
He was bailing himself out financially, in ego and also catching Oracle up in the entire cloud shift they missed and failed on with their own early shitty online products
Well it won’t be Ellison looking into dollar value but judge and lawyers. Besides this whole scheme could be filed under insider trading in some form. And Martha Steward went to jail for much smaller schennegans. Ellison could be in much more trouble than just hasing out a $ penalty and settling a lawsuit.
> Besides this whole scheme could be filed under insider trading in some form.
Huh, how ironic would that be, as the company's primary compliance policies urge it's employees against insider trading and other such practices and warns them multiple times not only when they're inducted into it but several times throughout their employment.
Look from the other side as well. I doubt such transaction moves the needle enough in Oracle’s performance to mean anything to the pension fund’s investment. However, it’s almost an asset for the fund to be able to pursuit such lawsuit.
Basically: Larry Ellison had a vested interest in Oracle buying NetSuite, and (allegedly) abused his power within Oracle to kickoff the NetSuite acquisition at a premium far above NetSuite's actual value, thus (allegedly) financially benefiting Ellison rather nicely.
The BS-mometer on this one is off the scale... Allow me to explain
1 - a bunch of professional investors (the "affected") and money managers buy material stakes in Oracle
2 - the affected elect the CEO
3 - the affected elect board members
4 - the CEO explores, consults and executes on M&A transaction
5 - the board members vote on M&A deal
6 - the largest affected hear specifics of M&A deal and weigh in
7 - deal loses money. The affected want to sue.
I count no less than 4 times in which the affected as stakeholders should have made better decision. And a few other steps when other parties would have prevented problems if the affected parties had not been asleep at the wheel
These sort of lawsuits never happen because the improbability of investors clawing money back off their own (not others) mistakes.
And make no mistake. There is an element of sour grapes here.
That's not meant as a dismissal, I'm just not very familiar with Oracle DB and I haven't heard about it dominating on query performance or language features. That might imply it wins at scales I haven't ever needed, but I could imagine some other reasons.
Are the standing advantages support and scaling, basic features, or something else?
I saw this document linked on Twitter yesterday and it's just amazing. I always knew that Larry Ellison's mug was in the dictionary next to the definition of "customer hostility", but man, it's another thing altogether to read the top 60 ways Oracle will screw you.
My favorite is how you can't use Oracle Technology Network (OTN DEV) licenses for testing. They're only for development, which is something you do without testing.