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Chasing Bill
What More Does He Want?

by Jim Surowiecki (Suroweicki@aol.com)

He's not what one would normally think of as a computer geek. He races sailboats competitively, has appeared on Oprah, and was recently photographed for Time sitting comfortably in a Japanese-style room decorated with tatami mats and rice-paper walls. Larry Ellison, CEO of ORACLE (Nasdaq: ORCL), seems, in fact, a man devoted as much to the pursuit of style as he is to the pursuit of profits. But it might be more accurate to say that, for Ellison, the pursuit of style and the pursuit of profits have become inseparable.

That may seem to be a rather odd conclusion, given the fact that Oracle has become the world's No. 2 software company not through brilliant advertising campaigns like the one INTEL (Nasdaq: INTC) fashioned for its Pentium processors nor through the marketing of consumer products with wide-ranging appeal. Indeed, Oracle's major business, the provision of computer databases to large corporations, could hardly be more mundane. And yet it still seems fair to say that, at this point in Oracle's existence, who Ellison is and how he fashions his life has as much to do with the company's future as does anything else. The stories about Ellison drive free exposure for his company, Oracle.

In no small part, that coverage comes because Ellison has styled himself as the nemesis of Bill Gates. Microsoft inverted. In recent months, as Ellison flirted with the acquisition of APPLE (Nasdaq: AAPL), he has received a remarkable amount of press coverage, with a short article about him appearing in Esquire and full-length profiles of him in Vanity Fair and Time. And in all these stories, Ellison himself remains remarkably consistent in his message: Bill Gates' rule over the personal computing industry can end, and if it does, Ellison will be the one to do it.

The odd thing about Ellison's obsession with Gates is that it seems somehow unmotivated, at least in a personal sense. In other words, there's no story lurking in Gates' and Ellison's past of Gates betraying the erstwhile samurai, nor is there any suggestion that MICROSOFT (Nasdaq: MSFT) has ever seriously encroached on Oracle's turf. In fact, were it not for Ellison's sense that he's on a quest of some sort, it's not really clear that Microsoft and Oracle would even be crossing swords at all. (Though it is hard to imagine Microsoft being able to resist moving into any area where another software company enjoys market dominance.)

The most concrete result of Ellison's desire to challenge Gates, of course, is the network computer (NC), the radically pared-down personal computer that will serve as a conduit for access to a network instead of being a stand-alone device. The NC, which Oracle and SUN MICROSYSTEMS (Nasdaq: SUNW) have played crucial roles in developing, offers the possibility of putting enormous computing power into the hands of individuals for less than $500. It also, not coincidentally, holds the promise of ending the stranglehold that Microsoft enjoys over the operating systems of personal computers.

According to Bryan Burrough of Vanity Fair, in fact, the NC was born out of "Ellison's resentment of the hype surrounding the launch of Microsoft's Windows 95." While speaking at a Paris conference just as Windows 95 mania was seizing the computer press, Ellison decided to launch a bomb, introducing the NC to the world by saying, "The P.C. is a ridiculous device."

Ellison's plans for the NC have been helped along, of course, by the fact that Sun's Scott McNealey is, if anything, more hostile to Gates. At the same time, the creation of the Java programming language, which would facilitate the replacement of hard disks with networks from which programs could be easily downloaded, has strengthened the NC concept, while the willingness of IBM (NYSE: IBM) to endorse the project gave it both institutional and public-relations support.

Still, for all of this, the real prospects for the NC remain decidedly unclear. Gates, for one, remains essentially dismissive of the long-range impact of the concept and, in any case, one suspects that he's confident Microsoft will figure out a way to make money off it even if it does happen. There have been estimates by some analysts that somewhere between 65-100 million NCs will be sold by century's end, and Ellison clearly hopes that the NC could become the vehicle for uniting cable and the Internet. But at a time when stand-alone PCs are becoming ever more powerful and at the same time ever cheaper, the NC seems to be missing a hook with which it can lure customers. In other words, Ellison has yet to make obvious why everyone needs an NC instead of a PC.

In this context, his flirtatious attempt to become head of Apple without ever buying the company can be seen as an attempt to acquire a firm with the name brand recognition to make the NC a household product. He may have achieved this just by publicizing the idea. And for all of Apple's woes -- and they are many -- the company still retains a very real cachet with computer users, and it still remains the one computer company besides Microsoft whose name almost everyone recognizes. A Sun-Oracle-Apple push for the NC might have been able to make a real difference.

Maybe, then, that's one way to think about the way in which Ellison has increasingly found his way into the spotlight. If the task is, as he told Burrough, to find a "'lifestyle' brand" for the NC, perhaps the way to do so is by associating his lifestyle with his brand. Get on the NC bandwagon and you too can walk in the woods with Steven Jobs and ponder the mysteries of Zen. You, too, can avoid being labeled a geek. And if things don't work out, well, there's always those databases to fall back on.

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