Once again, Larry Ellison is in second place.
Once again, Larry Ellison is in second place.
Heading into the 2007 America’s Cup contest in Valencia, Spain, Ellison’s BMW Oracle Racing syndicate has consistently trailed the No. 1
syndicate in the challenger racing, Emirates Team New Zealand, for the opportunity to snatch yachting’s top prize from the Swiss team, Alinghi. The Oracle team wound up in the same position in 2003, when Alinghi beat Ellison in the final races that determined who would challenge defender New Zealand for the Cup. For Ellison, who Forbes Magazine listed in 2000 as the second-wealthiest person in the world behind Bill Gates — he dropped to a tie with a French woman for No. 15 last year — it’s the same old story.
So the question must be asked: Does Lawrence J. Ellison, 62, CEO of Oracle Corp. and one of the most ferocious warriors in the software industry, have the cunning and craft to grab sailing’s biggest hardware? Ellison has bet $100 million of his own money that he does. To handicap your own wager, consider this capsule version of Ellison’s resume.
• Born in the Bronx to an unwed mother and adopted by his aunt and uncle — the Ellisons — to be raised in Chicago, Ellison’s ability to focus on goals made him a millionaire by the time he was in his 30s.
• Although he dropped out of two colleges, he has had enough success to pledge, among other large grants, $115 million to Harvard University, a gift he rescinded last year when the school fired a president Ellison favored.
• Having sailed only briefly aboard a 34-foot sloop he bought after moving to California in 1966, he was convinced by a friend in 1994 to take up yacht racing. He built a 79-foot maxi, Sayonara, with which he won several prestigious races, among them two victories in the Sydney-Hobart race.
• Cured of a need to race on the open ocean after his victory in the deadly 1998 Sydney-Hobart, he committed $80 million for his first America’s Cup campaign, in 2002-’03, building a team for Oracle BMW Racing (as it was then called) that defeated all but Alinghi, the eventual Cup victor, in a field of nine syndicates.
Brilliant and at times brash, Ellison is both reviled and revered by members of the industry. In the sailing world, one racing legend notes that among some professional yachtsmen the name of Ellison’s company — Oracle — is corrupted to form an unflattering acronym. But almost everyone respects the tycoon’s ability, among them Malin Burnham, the San Diego yachtsman who managed several of Dennis Conner’s Cup campaigns and who was inducted into the America’s Cup Hall of Fame.
“I think … that they’ve got a pretty darned good chance of winning this thing,” says Burnham. “He’s got a strong team that has settled down.”
Ellison didn’t respond to requests through BMW Oracle Racing for an interview. No member of his current team contacted for this profile would comment, nor would any of Ellison’s former business associates agree to talk.
But outside of BMW Oracle and the software industry, there are those who can shed light on the man who would bring the Cup to San Francisco and the Golden Gate Yacht Club. G. Bruce Knecht, a foreign correspondent for the Wall Street Journal, re-created Ellison’s voyage and victory in the 1998 Sydney-Hobart in his book “The Proving Ground.” Matthew Symonds, political editor for The Economist in London, wrote Ellison’s biography, “Softwar.” Justin Clougher was bowman on Sayonara. And Bill Erkelens was Ellison’s professional skipper on Sayonara. Interviews with these four revealed each, for his own reasons, to be a fan of Ellison’s.
“I find him admirable in lots of ways,” says Symonds, who was technology editor for The Economist when he met Ellison. “He’s highly intelligent. He’s curious. He’s generous. He’s very innovative and always really good company.”
“That’s the thing about Larry that is absolutely striking to me,” says Knecht. “He’s a guy who has always sought out things that are difficult. He thinks that’s the purpose of life — that we are not supposed to do things we are good at. We should keep taking on new battles over and over again exhaustively, just to find out how good we are.”
“I think Larry’s the kind of guy who doesn’t carry on, hooting and hollering like a football fan,” says Clougher, who grew up in Hobart, Tasmania, and most recently sailed in the Volvo Ocean Race aboard Pirates of the Caribbean. “He’s a Zenful person. He doesn’t scream and yell. He doesn’t hang out with the guys in bars and things. [But] you can just tell when a person is enjoying the competition and the results.”
“He’s eager to learn,” says Erkelens, who was the first professional captain of Sayonara and helped teach Ellison about yacht racing. “He’s trying to learn as much as he can. Above all else, he’s a fierce competitor. He wants to win. He wants to be successful.”
What journalist Symonds discovered was that — in business, at least — Ellison wants to win on his own terms. “I always feel good when everyone says I’m nuts, because it’s a sign that we’re trying to do something innovative, something truly new and different,” Ellison told Symonds.
Ellison had dropped out of both the University of Illinois and the University of Chicago before he migrated to California, looking for a way to get rich doing what he wanted to do. “I never had the discipline to do things I didn’t like,” he told Symonds. “I had such a short attention span that it was simply impossible for me to finish anything.”
He says he found a home for his unruliness when he discovered computer programming. “People — teachers, coaches, bosses — want you to conform to some standard of behavior they deem correct,” he told Symonds. “They measure and reward you on how well you conform — arrive on time, dress appropriately, exhibit a properly deferential attitude — as opposed to how well you do your job. Programming liberated me from all that. I could work in the middle of the night. I could wear blue jeans and a T-shirt. I could ride my motorcycle to work. And I’d make more money if I could solve the problem faster and better than anyone else.”
Ellison grew wealthy by learning how to build a better database. “The database is really, if you think of it, like a bucket. It’s a data container,” explains Prof. Frank Merrick, who teaches computer science at Gwynedd-MercyCollege near Philadelphia. A large corporation keeps lots of data — sales data, production data, employee data, financial data. “If I purchase an Oracle license, they will give me the software that in essence is the data bucket,” Merrick says. One thing Oracle software does better than other products, Merrick says, is communicate with other data buckets, an important feature that contributes to the company’s value and Ellison’s wealth.
In 2006 Forbes Magazine said Ellison was worth $16 billion. Oracle’s reach seems to guarantee his continued wealth. “Every time we use a credit card, buy a plane ticket, reserve a hotel bedroom, order from a catalogue, search Yahoo, get a video from Amazon, settle a phone bill, or withdraw cash from an ATM, the chances are that we are interacting with an Oracle database,” Symonds writes.
With Ellison at the helm, following a course he called management by abdication, Oracle had its ups and downs, nearly imploding in the 1990s. From his mistakes, Ellison learned to hire professional managers. It’s a strategy he appears to be following in his America’s Cup campaign.
It was a neighbor in Ellison’s posh Bay Area neighborhood, New Zealand expatriate David Thomson, who steered the software mogul into yacht racing, according to Erkelens. Ellison had for years enjoyed adventurous sports, kayaking and mountain biking among them. “Larry takes very good care of himself. He doesn’t eat junk or anything like that. He keeps fit like the rest of us,” says Clougher, referring to professional sailors.
Thomson had a Farr 1220, a 40-foot sloop named Kotuku that Erkelens, who was attending a university, took care of and with which Thomson had won his division in the 1991 Transpac race from Los Angeles to Honolulu. “He [Thomson] bragged to Larry at the gym about how wonderful the Transpac was and how he should try it some time,” Erkelens says.
“So we started doing some research,” Ellison told Symonds, “and we signed up the best designer, Bruce Farr in Annapolis; and the best builder, Mick Cookson in New Zealand; the best spar maker, Steve Wilson in New Zealand; the best sailmaker, the best this, the best that. We found the right people to design and build the fastest maxi in the world.”
That boat was Sayonara, and with Erkelens and other top sailors teaching Ellison, the maxi won five consecutive Maxi World Championships and finished first in 13 other races in its career. “The whole thing was a learning process and we had people on board that were very good,” Erkelens recalls. “Paul Cayard, Stan Honey, Mark Rudiger as navigator, Chris Dickson, Brad Butterworth. They were all at the back of the boat, so he [Ellison] was learning from them. As a student, [Ellison is] very, very sharp, a numbers guy. He remembers everything.”
At first, Ellison was reluctant to steer his own boat, Erkelens says. It was 1996, and the first maxi race was in Hawaii, where the owner’s turn at the helm was part-time. Then the maxis went to San Francisco. “We convinced Larry he was fine and to go ahead and steer the boat,” says Erkelens. “He was a little reluctant, mostly at the starting line. He subsequently went out and steered his own boat, and we won every race. It worked out just fine. Nine races in the big boat series, [and] we beat them all.”
Knecht says the thing that distinguishes Ellison as a sailor is the way he got into racing. “He seemingly out of the blue says, ‘I’m going to become a world-class yachtsman,’ ” Knecht says. “He owned boats years before, but he didn’t grow up racing. That is not the normal way it happens.” (Incidentally, Ellison owns the third-largest private yacht in the world, the 452-foot Rising Sun, his third megayacht of more than 190 feet.)
“[Ellison] decided he was going to write whatever checks were necessary,” and then let Farr and Cookson create Sayonara, Knecht says. “It happened without Larry’s input except Larry’s ability to make the big decisions. Chris Dickson had a very big role in that. Larry decided he was Larry’s guy. Chris put together a team that sailed to Hobart, and Chris is running the show in the America’s Cup competition.”
One of the crewmen Dickson hired for Sayonara was Justin Clougher. He recalls Ellison being just another member of the crew that fought its way through the storm that ravaged Bass Strait in the 1998 race and killed six sailors.
“The Sayonara team was a very high-quality team,” Clougher says. “Hand in hand with that, Larry was getting better and better at sailing and was learning more and more from these top-notch sailors around him. He was well-coached, and he practiced and he was driven enough to improve his own skills. The boats are very physical to sail. Sydney-Hobart is very demanding on everybody.”
When Sayonara crossed the starting line in Sydney in 1998, Ellison “was well on the way. We’d already won two world championships on that boat,” says Clougher. Nor did Ellison go blindly into the race, he says. “Every single person in that race knew it was going to blow like hell in a place where it can blow like hell.”
On the foredeck of Sayonara, Clougher was busy early in the race replacing a broken spinnaker pole. “Shortly after that, we came upon the brunt of the storm,” Clougher says. “There were times when Larry was below and was lamenting to himself that he could be someplace else. It was crashing and banging and making a horrendous noise. It wasn’t very Zen-like. Larry was [saying to himself], Hey, this isn’t much fun.”
During one sailing maneuver in Bass Strait, crewmember Philip Kiely, an Oracle executive, put his foot down wrong and twisted it, Clougher recalls. Kiely’s ankle snapped, and his foot “was flopping around like a wet rag,” leaving him in agony, he says. “A few people did get seasick on that boat. We kept racing the boat all the way.”
Ellison let his professional crew make the sailing decisions on Sayonara during that race until he learned that the hull was beginning to delaminate. At that point, Rudiger was navigating and the boat was beating into a southwest wind on a starboard tack. Ellison thought they should switch to a port tack. “I figure if we can get close enough to the lee of the island [Tasmania], we should get some relief from these big waves that are trying to kill us,” he told Symonds. “I tell Rudiger to tack the boat. He tells me that he thinks that tacking the boat will hurt our chances of winning the race. I say, ‘We won’t win the race if we sink. Tack the f------ boat!’ ”
Sayonara found better wind and less punishment on the new tack, and went on to win the race, thanks to Ellison’s willingness to make the big decision. “That’s kind of Larry to me,” says Knecht, “the ability to make the big decision and stick to it.”
In Ellison’s drive to break above the No. 2 spot in the America’s Cup challenger series, the Louis Vuitton Cup, he has taken a full-time role aboard BMW Oracle’s boat USA 98. At Oracle he remains CEO, where he has withdrawn from the day-to-day operations but, according to Symonds, “absolutely sets strategy.”
But Symonds says that, unlike Ellison’s approach at Oracle of feeling best when he is a renegade, his Cup campaign is mainstream. “I don’t think that they’ve gone about it in an unconventional way,” he says. “They’ve set about hiring the best possible team they can. It is how you would go about building a winning America’s Cup team, and I’m not sure there is a different way of doing it.”
If BMW Oracle beats New Zealand and then conquers Alinghi, Knecht wonders whether Ellison will defend the Cup. “He’s not a guy with just one or two interests,” says Knecht. “He plays the piano very well. He likes to cook. He likes to surf. He has other athletic interests. He likes to think about big things, the nature of life. He’s very involved in biomedical research. I guess I wouldn’t be surprised if he won it and said, ‘On to the next thing.’ ”
Symonds disagrees. “[The America’s Cup] gives him a lot of the things he’s looking for. I think he might also feel that if he wins the America’s Cup, the opportunity [that is the privilege of the victor] to re-create the competition in a new and interesting way … would probably appeal to him quite a lot. [Former Alinghi skipper] Russell Coutts was talking about the need to go on to a new type of America’s Cup boat, fast like the Volvo [Ocean Race boats] that get up to the high 20 knots and that sort of thing.” That, says Symonds, would be a new adventure that would appeal to Ellison.