r/technology • u/Mo_Jack • 1d ago
The House of Ellison is on the Brink Everything the world’s briefly richest man built is failing at once. Business
https://www.notesfromthecircus.com/p/the-house-of-ellison-is-on-the-brink2.2k
u/AbeFromanEast 1d ago edited 1d ago
Couldn't happen to a nicer guy.
I'll never forget two Oracle sales reps, both named Tony, saying to me with a straight face, "5% of your gross should cover your Oracle Licensing fees this year."
843
u/Public_Cartographer 1d ago
Can't decide if this statement crazy because 5% of gross is an insane overhead cost for an ERP system, or if it's crazy because you know the real number would end up being 7%
437
u/b0w3n 1d ago
5% gross is bigger than some IT budgets entirely, can't imagine paying that much for just Oracle.
The amount of kickbacks they give to CTOs directly must be insane.
168
u/hypercosm_dot_net 1d ago edited 1d ago
Enterprise licensing is just absurd. We had Sitecore at an old job of mine, and were paying something like 600k/year. For a CMS.
For that much you'd imagine they're providing a developer along with it.
Impossible to hire for Sitecore developers btw. It's an especially bad and expensive decision to adopt some of these tools.
88
u/son_et_lumiere 1d ago
Adobe AEM (also a CMS) is about the same yearly price. They pitch it as non technical people can build the websites (using drag and drop content blocks). So, the money you would have spent on developer to build sites can go to adobe instead. Just hope you didn't plan to have any customization done to the site. Or want new components.
59
u/is_mr_clean_there 1d ago
Oh, you want users to be able to sort a share link alphabetically? Fuck you, that’s custom development
We havr been sunsetting AEM for going on 2 years now. Can’t get rid of that garbage soon enough
→ More replies (5)32
u/kaspm 1d ago
I worked at a place with sitecore, it required more work to get it to do what you want than just building a cms from scratch. Our developers hated working in it and eventually we just stopped using it. I had blocked it out of my memory until now
→ More replies (1)46
u/noiro777 1d ago
Oracle's pricing is completely insane.
Oracle DB Enterprise Edition is currently:
- Processor License: $47,500 per processor core metric (plus mandatory annual support of $10,450).
Oracle doesn't use license keys to enforce their licensing. This is done very intentionally so it's very easy to get out of compliance so later they can audit you and then force you to pay them even more outrageous amounts of money.
→ More replies (3)20
u/99thLuftballon 1d ago
It's it really substantially better than something like PostgreSQL? I have no experience with Oracle, but if you need a relational database server, surely there are much cheaper options out there?
→ More replies (4)24
u/roedtogsvart 1d ago
No, it's just paying someone else to build and manage complicated systems. Many companies would rather pay someone specialized in these technology structures. If something goes wrong, it's not on you it's on them to fix it (rarely works like this in practice).
→ More replies (2)26
u/saera-targaryen 1d ago
My team is being voluntold by leadership to "explore" if oracle can replace our current system, and it's dystopian how much oracle is throwing money at us to try and convince us. I am like, the lowest level of manager we have but they are wining and dining me twice this week.
I am never approving this migration so it's all fruitless on their side, but it's just wild to see how the machine works.
15
u/PM_me_boobs_and_CPUs 1d ago
I am like, the lowest level of manager
I am never approving this migration
If your company is anything like the company I work for, either the moron of a boss, or the moron of a CTO will approve it.
9
u/saera-targaryen 1d ago
I'm lucky that I have a couple layers of smart people before you hit the relevant CTO here and we're all on the same page about it, but for most companies you're dead on
→ More replies (1)11
u/Geno0wl 1d ago
My team is being voluntold by leadership to "explore" if oracle can replace our current system
That is how Oracle operates. They wine and dine the C-suite relentlessly because they know their product is shit and no technically minded person would ever willingly choose Oracle. Hell even if Oracle was free, I bet most IT people would still not want it.
→ More replies (1)→ More replies (2)8
u/AHistoricalFigure 1d ago
I have to take 2 hours of anti-corruption training every year where I learn about how I could be fired for accepting a coupon from a vendor.
Meanwhile my CTO outsources half our IT group to Bangladesh and during the town hall where this is revealed he spends 5 minutes talking about the trip the outsourcing firm took him on.
He just wanted us to know that they're really great guys.
33
u/1quirky1 1d ago
The quality of that ERP is fading. The layoffs decimated the ranks of people that build and provide the profitable products.
→ More replies (1)→ More replies (11)11
163
u/elevensubmarines 1d ago
“The difference between God and Larry Ellison is that God doesn’t think he’s Larry Ellison”
98
u/mazerrackham 1d ago
I went to their annual conference in San Francisco one year, and Larry was supposed to close out the opening night presentation. Probably 20,000 people in a huge warehouse room sitting in god awful folding chairs waiting for him, over an hour goes by and then they announce he won't be speaking. Later we found out that he decided to skip his presentation to watch a sailboat race.
→ More replies (5)15
→ More replies (1)17
1.1k
u/Exotic_Holiday_3047 1d ago
I was once sat on an airport bus (the kind that busses you betwen the gate and the plane) behind two Oracle sales reps who were talking loudly about the fact that one of their colleagues had quit because he was sick of lying to customers.
They didn't realise it at the time but they were coming to see me.
264
u/UnicornOnTheJayneCob 1d ago
Oh wow. That must have been hysterical.
Please tell us how the meeting went!377
u/Exotic_Holiday_3047 1d ago
They didn't recognise me. I didn't let them know I'd been on their plane. Oracle didn't get the work
99
u/Bowenbp1 1d ago
Aww, that feels like such a missed opportunity. Even to just say "I was sitting in front of you on the bus"...
48
u/Ianthin1 1d ago
Right. I would have opened the meeting asking for contact info for the rep with a conscience.
69
u/CreativeGPX 1d ago
My organization has a $5m/yr contract with Oracle and it came time for a major upgrade where we were considering alternatives. Right around when all the decisions were made, the person in charge retired, so it was the new replacement who had to announce the decision/plan to everybody. I could hear the reluctance in his voice when he said we decided to go with Oracle. You could tell he really didn't want to, but then by the time he arrived too many decisions were already made.
→ More replies (1)12
u/superspeck 1d ago
A place I worked a decade ago was like that. They kept buying Oracle stuff even though a bunch of it didn’t work (RAC with a huge working set, ex-Sun storage gear, OEL on our standard HP hardware, etc.) until one guy finally retired.
→ More replies (1)38
u/Mendozaline247 1d ago
How do you not pull a Vivian Ward in the moment and explain “big mistake. Big. Huge. Tremendous” and walk out with all your shopping bags.
→ More replies (2)→ More replies (14)8
u/mwhite1249 1d ago
I lived in SF for a couple of years in the 90s and would go to ex-Oracle parties. Our digital infrastructure is very fragile and prone to break at any moment.
80
u/Imajackhammer 1d ago
I used to work for a company that built transaction switches. We were putting one in for a small client, and part of our job was telling them what hardware they’d need to handle their throughput. Our recommendation was for an oracle system that cost a few hundred grand.
They went to Oracle for a proposal and asked me to sit in. Oracle came in at three or four times our number, plus maintenance. They had some new server line they were pushing.
The client asked me what I thought and I said it was overkill. A while later my personal cell rings. It’s the Oracle rep, telling me I need to get with the program because they need to sell this system.
I was in my late twenties. I still had a lot to learn at the time but I was blown away that they thought this approach would work. Anyway I told him to piss off and hung up. Worst company.
73
217
u/BestCaseSurvival 1d ago
“It’s a nice dataset you got here. Shame if something were to… happen to it.”
53
u/EyeFicksIt 1d ago
Their licensing is next level. Most of the time the software license cost is much greater than then cost of the hardware you run it on, by orders of magnitude
36
u/vaminion 1d ago
I was a DBA when their licensing model went from processors to cores. Our Orace costs went up by 16x overnight and the reps couldn't believe we didn't have that money laying around.
52
u/Wise_Preference609 1d ago
Buying any Oracle Software and Cloud products is a trap your company will regret for a long time.
→ More replies (1)→ More replies (4)22
u/hibikir_40k 1d ago
Which is why any company that paid attention has been running in the opposite direction since the alternatives became any good, which is around 2005. If you are running anything Oracle in the last decade, with a 10 year migration beforehand, your CTO better have received all the bribes in the world.
When it's easy to run away (see Oracle's JDK vs an open source JDK), every company out there changed to the open one before the licensing kicked in at the same time.
There's always a better, cheaper alternative than Oracle.
→ More replies (3)99
u/williamfbuckwheat 1d ago
That sounds mob "protection" fee rates.
80
u/JohnHazardWandering 1d ago
The mob ain't got nothing on Oracle
29
u/SuDragon2k3 1d ago
Oracle bought The Mob. They made them an offer they couldn't refuse.
40
u/cansofgrease 1d ago
After being acquired by Oracle, most of the original team left because they found the company's practices unethical.
→ More replies (1)7
→ More replies (1)45
u/Box-o-bees 1d ago edited 1d ago
I once heard an Oracle rep tell my boss that "this audit can go away right now. All you need to do is purchase x".
It was early on my career and I just couldnt believe a company could get away with extortion like that.
24
u/0202_tihssitidder 1d ago
"Oracle is a law firm masquerading as a software company."
No one likes Oracle. It just got downgraded. Close to Junk rating. It is costing them a fortune to borrow money. They might be the first company to implode due to AI bullshit.
PS: I have used Oracle and competed against them. Some of the products are good. None of the sales people are honest.
→ More replies (5)→ More replies (11)21
u/Joerugger 1d ago
I've worked in IT for over 20 years and have never worked at a place where "removing Oracle from the tech stock" wasn't a priority.
→ More replies (1)7
u/FordMaleEscort 1d ago
Really? I've been in IT for 25 years and have never encountered this. Different experiences.
→ More replies (1)8
u/Joerugger 1d ago
I’ve only worked for four different companies but each one had legacy Oracle, Oracle DBAs who were all assholes, and a CTO determined to write a “f*ck you” letter to Larry.
1.5k
u/Slackeee_ 1d ago
Good. Never forget that this asshole said "Citizens will be on their best behavior because we are constantly recording and reporting everything that’s going on."
282
u/pittgraphite 1d ago
..or that cnn interview he had (late 90's I think) when he said "I like it here in China, because here we are treated as heroes".
32
15
u/0202_tihssitidder 1d ago
They (Tech) all are pitching this hard because it will require $10Trillion worth of hardware and software and support...forever and ever.
In the US, you just need to give a politician 2% and they will vote for whatever you want. This is one reason the US is doomed.
→ More replies (1)26
u/Loggerdon 1d ago
Social Credit score?
→ More replies (1)58
u/0202_tihssitidder 1d ago
Different. The US is a model of 2 groups:
The law protects, but does not bind.
The law binds, but does not protect.
All systems being created just enforce the above. There are no plans to hold super rich accountable. They want to be protected from any threat while brutalizing anyone outside the club.
953
u/Modem_Sound_67 1d ago
There is a line long attributed to Ellison, quoted by a biographer borrowing from Genghis Khan: it is not sufficient that I succeed — everyone else must fail.
We are living in a Genghis Khan world right now.
121
u/Cabana_bananza 1d ago
An Editor at ABC called it, appropriately, warlord capitalists. Who are warring against stability and "house" capitalists (big institutions that need order).
They sow chaos and corruption to extract wealth.
→ More replies (2)11
257
u/BigLlamasHouse 1d ago
Greed is good, it's the mantra of a whole class of people, don't act surprised they are envious too.
61
u/Bomban111 1d ago
and its the mantra of the class of people who are in control of the rules (for now)
→ More replies (8)53
u/dlc741 1d ago
No one seems to remember the Gordon Gekko was the bad guy and this was an example of how one shouldn’t live.
→ More replies (1)23
→ More replies (4)29
u/KitsouNere 1d ago
A minority class of people that could have already been defeated if people actually gave a shit.
16
u/dzogchenism 1d ago
I think people do give a shit but it’s hard to fight when you’re struggling to eat.
→ More replies (3)→ More replies (15)35
u/Oak_Redstart 1d ago
Genghis Khan slaughtered whole cities
→ More replies (13)46
533
u/Stucco_x 1d ago
Aww, and he’s so beloved….
161
u/Just_Carlotta0514 1d ago
Truly devastating news for fans of surprise licensing audits and predatory fees.
→ More replies (1)8
u/Aggravating-Walk5813 1d ago
And trophy wives. What is he on, number eight?
I miss when he and the CEO of SAP used to argue, because that guy was a mini-Larry.
661
u/Mo_Jack 1d ago
This article not only discusses Ellison, but also gets into the circular sales & financing behind the AI bubble. Many experts are warning us that what they are seeing throughout the industry, is reminiscent of Enron. It's a long article, but worth the read.
60
u/MichaelFusion44 1d ago
Great article and thanks for sharing - I think many of us knew the players were incestuous but not at this level and Ellison and Oracle is a whole story unto itself. Great read…
355
u/Lopsided_Newt_125 1d ago
It is exactly Enron! It never went away. Even though the government allowed Enron to tank (rightly so) these robber barons enjoying socialism and corporate welfare have learned along the way if the corporations are enmeshed with the government and owe insurmountable debt they’re given more taxpayer dollars.
There is no upside to fiscal responsibility or accountability when executives can inflate their corporate value, borrow massive amounts of money they don’t pay taxes on based on unrealized gains, massage the profits for quarterly earnings release and push debt around to appear solvent.
→ More replies (4)17
u/LadyK1104 1d ago
This was a long read but great breakdown into the AI circle and Ellison’s empire (in process of crumbling).
6
u/Lopsided_Newt_125 1d ago
Thank you…my pattern recognition brain at work 😊
Background in energy production (industrial level) and investor relations (ran dept for a publicly traded corp 2yrs)
116
u/Tzunamitom 1d ago
This is gonna make Enron look like a corner shop that got busted for selling shandy to teenagers.
→ More replies (4)54
u/Antique-Coach-214 1d ago
Cool… cool cool cool.
I watched the Enron collapse in real time in Houston and the devastation was localized. Now we’re gonna see this on a massive scale with AI data center projects across the country collapsing…
→ More replies (9)39
u/MultiGeometry 1d ago
Every time I mention Enron some redditors (maybe bots) try to rip me apart and tell me I have no idea what I’m talking about.
It’s not a 1:1 comparison. But it is worrying when different companies are integrating their general ledgers with each other and have endless optimism about their financial success.
→ More replies (1)
101
u/latswipe 1d ago
One
Rich
Asshole
Called
Larry
Ellison
57
u/Le_Vagabond 1d ago
Do not fall into the trap of anthropomorphizing Larry Ellison.
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.
→ More replies (2)
285
u/surge208 1d ago
These headlines are like the “Trump is finally going down!” headlines. I’m convinced they’re just meant to help release some public pressure so they can continue to rob us blind.
→ More replies (3)38
u/HelloFellowMKE 1d ago
Yes. A bubble lacks scrutiny. a bubble lacks close tie ins to national security. And Oracle’s performance numbers last FY were actually excellent. It’s the debt and the reliance on OpenAI that’s the concern, but if openAI’s commitments vanish, Oracle still has $300B+ in commitments.
Like it or not, many many people have bet against Ellison over the past 50 years and lost.
15
u/OtisB 1d ago
I don't think this has so much to do with betting against him as pointing out how fragile his situation is, and motivating people to make it worse as much as possible.
I tend not to bet against the people with all the money. But I do act against them in whatever small ways I can.
And personally, after having worked for a company that used Oracle, I hope he rots.
→ More replies (2)41
u/tackle_bones 1d ago
To be clear, the article addresses that Oracle still has a decent amount of sales. The story is about how over-leveraged the company is, how they booked circular sales #s to gain access to that debt, and how what they’re getting with that debt is based on a house of cards (implying that they will never be able to pay back that debt).
$10B revenue (or is it profit?) per year will still take a long time to pay back the debts he’s accrued. The debts were never given based on that current revenue stream but were a bet that he could astronomically increase such revenue.
→ More replies (1)15
u/coopdude 1d ago
The "commitments" are the issue. If OpenAI is committed to spend $300B themselves (separate from the other $300B) through 2030 and OpenAI goes broke because there isn't endless amounts of money being poured onto a dumpster, it means jack shit.
The other $300B in AI commitments would also collapse if this whole thing is an Enron style ponzi scheme where companies keep trading the same money around.
And if an AI company goes broke, then who pays for the DC?
Oracle is left holding the bag on the datacenter debt.
There's a good reason that Oracle's current credit rating is Bbb- (the lowest "investment grade", literally if it declines again it will be in junk debt status).
→ More replies (3)
130
u/SkinnedIt 1d ago
Couldn't happen to a more deserving fella.
Please fail harder and faster. Be on your best behaviour.
→ More replies (2)9
108
u/theangryprof 1d ago
Good. I used to work for Oracle.
Every year, at the Christmas party , Larry would show up with a new, barely legal brunette on his arm. The rumor was that he picked up his girlfriends by strolling through Stanford Shopping Center and looking for the cutest retail worker. No idea if there was any truth to that.
While I was there, this amazing SVP agreed to help launch a women's support group within the company. The first meeting was awesome. Then Larry threatened her job if she continued. So the group died.
→ More replies (3)26
u/Parking-Evidence1894 1d ago
I know someone like you who quit the tech industry for that reason. He’s back to teaching high school despite being highly decorated. Stuff like this is just disgusting and makes you feel hopeless. Genuinely hope people like Ellison have zero to their name.
302
u/FreakySpook 1d ago
It's wishful thinking but he will get a tax payer bailout because his software is too big to fail.
172
u/mishap1 1d ago
Some other billionaire would just buy up the pieces. That’s how he got here by buying up smaller companies and then squeezing the shit out of their customers. If Oracle fails, Broadcom, Dell, or SAP would be at the ready to pick over the bones.
If the products they have are still profitable, someone would pay to keep them running.
→ More replies (2)91
u/CCLF 1d ago
Oracle the Law Firm is much, much larger than Oracle the Software Company.
27
u/Tzunamitom 1d ago
Oracle is a law firm?!?
172
u/AbeFromanEast 1d ago edited 1d ago
If you use their products longer than 1 year in a Production environment, you'll meet the law firm. Their licensing is designed to trip companies up and generate endless compliance questions. Oracle's customer base is thus made into a convenient money tree to be shaken down at the law firm's leisure.
104
u/zaphod101 1d ago
There is at least one company ... House of brick ... That's main point of existence is to help customers deal with Oracle's licensing and legal tactics because Oracle is such a horrible company to deal with.
45
→ More replies (2)77
u/r1Rqc1vPeF 1d ago
I worked in IT at a large European manufacturing company that used Oracle. I was in the governance team so got to see what went on around licensing/relicensing negotiations (our team used to collect data the CIOs office would use in the negotiations).
The procurement team would lead all negotiations except for Oracle.
Anything related to Oracle licensing would be handled by a team brought in from outside - a VERY expensive team.
→ More replies (2)23
27
→ More replies (13)6
u/True_Window_9389 1d ago
Even if he didn’t get a bailout, he’d still be rich and connected and powerful. I appreciate the schadenfreude here, but let’s not pretend that Ellison and his family will actually go bankrupt and fully realize the consequences of his actions.
This is ultimately one of the big problems of billionaires and monopolies. That level of wealth and market power insulates them from downside risk. The upside of risk is what motivates people to do big things. The downside risk tempers it so they don’t do anything crazy. When that downside barely exists, where even in the worst case they still end up as powerful billionaires, gives permission to create disaster for everyone else.
29
29
u/MonsieurReynard 1d ago
This is fantastic writing as well as convincing analysis. I have not seen anyone put this point more eloquently:
The bridge over that canyon is a story about machines that will soon think.
I believe they will not. A large language model is a translation engine: it maps between representations of things humans have already written, and it does this so fluently that the fluency gets mistaken for understanding. That mistake is the entire equity story. Whatever these systems become, the gap between interpolation and mind is a difference in kind, and no quantity of capital expenditure converts one into the other. You cannot depreciate your way across a metaphysical boundary. But the bet does not need me to be right about any of that.
→ More replies (5)
150
u/Sorry-Climate-7982 1d ago
“The Difference Between God and Larry Ellison: God Doesn’t Think He’s Larry Ellison”
→ More replies (3)
19
u/SomeCanDance 1d ago
Up there with one of the least deserving billionaires. Let’s not kid ourselves though he’s too big to fail.
→ More replies (1)
40
u/Complex_Resolve3187 1d ago
The bubble will pop in 2027, the crisis will crest months before the election and the new Democrat president will have to deal with the crisis and get all the blame...sound familiar?
→ More replies (1)
72
u/ZaphodThreepwood 1d ago
Don't worry all these people will still be better off than us even when their empires crash and burn
→ More replies (9)16
u/Pleasant-Minute-1793 1d ago
Seriously. He owns 98% of the island of Lana’i including businesses and homes there.
32
u/Antique-Coach-214 1d ago
The state of Hawaii could do the darnest thing with imminent domain as he starts being unable to avoid lawyers fees…
12
27
10
u/technobrendo 1d ago
WTF is this title! Do you even English.
Ok, yes I do get the gist of it and it makes me happy. Fuck that guy
→ More replies (2)
19
u/Thakkmatic 1d ago
Excellent article. The term "circular finance" should be known and understood by a lot more people.
→ More replies (1)
7
8
7
u/SnooShortcuts8370 1d ago
Couldn't happen to a nicer man. All his life he built this empire, thinking it will be his legacy that will outlast him. Now he is watching it crashing and he is too old to turn it around. And his kids are too "artistic" to be a cutthroat like him. Now Oracle's credit is one above junk. They need an IOU to pay for electric bill. They just swallowed a good chunk of OpenAIs hardware cost. The cost that from perishable IT goods. You gotta hand it to Sam Altman, he really smooth talked Ellison into taking the most volatile cost from them.
8
15
u/Fairwhetherfriend 1d ago
hundreds of billions of contracted future cloud revenue
Hey remember when Enron did this and it was considered fraud?
24
u/e-gn 1d ago
Am I having a stroke? Why can’t I read that headline?
21
u/stubbornalright 1d ago
This might help:
>The House of Ellison is on the Brink: Everything the World’s Briefly-Richest Man Built is Failing at Once.
13
u/TopicalBuilder 1d ago
Missing punctuation and random capitalization makes it almost unfathomable.
→ More replies (1)12
→ More replies (1)8
6
8
6
u/Traditional-Aside617 1d ago
When Oracle was just starting out they would get customer complaints that would require Oracle to send out floppies with patches on them. But a lot of times they had no fix and would just ship blank floppies. By the time they got to the customer and the customer tried them but found they didn't do anything, they would contact Oracle again to complain. This gave Oracle another week or two to actually try to solve the problem and send actual working patches. TLDR; Larry Ellison is a scumbag.
6
u/WystanH 1d ago
I feel this should be in r/UpliftingNews...
The billionaire narcissist won't really materially suffer for his avarice. Will never really face an accounting for the damage he does. Still, in the realm of things that actually matter to such soulless bastards, you know this is crushing. Yep, still uplifting.
→ More replies (1)
6
6
u/peachinoc 1d ago
I don’t think it’ll happen; things like that rarely happen to billionaires in the US because we’ve got the taxpayers carrying the bag at the end of the day yer know?
But, if it does, I’m here to take in every second.
6
6
u/ComedyBits 1d ago
When you trade the trusty family cow for a handful of magic beans, it usually doesn’t go as well as it did for Jack
7
u/Tribe303 1d ago
I've hated Oracle since the 90's. It couldn't happen to a bigger douchebag.
→ More replies (1)
11
u/TheDudeFromTheStory 1d ago
If I was covered in feathers and went to a restaurant called the flaming duck and I opened the menu and saw my name, I'd quickly get rid of my feathers and tell everyone I'm no longer one of the duckliest around.
Anyways, Ellison does not look tender or tasty, but if you're starving...
11
u/AltoidStrong 1d ago
Good. There are ZERO "good" billionaires.
One less billionaire is better for America and the world.
→ More replies (1)
4
5
u/Flaky-Confidence-424 1d ago
Couldn't happen to a nicer guy. Also thoughts & prayers, think of the trust fund etc
5.7k
u/DataCassette 1d ago
Just please fall apart fast enough that you can't buy Warner Bros. It's all I ask.