Live From Larryland

You gotta hand it to Larry Ellison.

Love him or hate him, the Oracle chairman makes life more interesting. He disappears from the hemisphere,and the business,last year in pursuit of an America's Cup berth. He literally phones in his keynote to Oracle's biggest customer event of the year. Meanwhile, Oracle's license sales continue to slip, its attempt to crack the business apps market is an underwhelming success, and its database stronghold is under attack.

Larry returns from New Zealand and keeps his own counsel, except for a few Linux drum-beating forays and, oh yeah, some fence-mending with once,and seemingly again,ally Scott McNealy.

But then, within days of PeopleSoft's bid for J.D. Edwards, he strikes with a vengeance, making a bid to acquire PeopleSoft for $5.1 billion.

A former colleague summed it up: "He's off for half the year in the South Pacific, sailing, chasing women, whatever. He comes back, and in one fell swoop proves he's been paying attention all along. He gets it."

"It" is the all-important role business applications are playing in high-tech. Rather than watch PeopleSoft bolster its midmarket presence with J.D. Edwards, Larry pre-empts that deal. He makes no bones about the fact that his 5.1 billion clams will serve mostly to rid Oracle of an apps competitor. As one Wall Street pundit put it: "This is not an acquisition; this is a hostage-taking."

He seems bent on proving his premise that the boom years for high-tech are gone. We're in for consolidation. And Larry wants to be a consolidator, not a consolidatee.

At first, I thought this buyout didn't have a prayer, but that it didn't matter. Its very existence is a huge monkey wrench in the PeopleSoft/J.D. Edwards deal and buys Oracle time. PeopleSoft CEO Craig Conway appeared to agree, issuing strong statements about Oracle's "atrocious" behavior. The PeopleSoft board has since voted against the deal and recommended that shareholders do likewise.

Still, I wouldn't bet against Ellison. Whatever else can be said about him,and it's ALL been said,he is not an idiot. He's a smart guy with a lot of money. Don't sell him short.

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