Larry Ellison profile: Happy as Larry

LARRY ELLISON, GURU OF ORACLE AND THE LUCKIEST PLAYBOY IN SILICON VALLEY

Larry Ellison came through a clear winner at Cowes last week. His yacht, the Sayonara, sailed to victory ahead of the three rivals in its heavyweight class of boats, all owned by mega-rich tycoons like himself. Mr Ellison's billionaire status comes from his stewardship of Oracle Corporation, the computer software giant he founded 22 years ago. It too appears to be on a winning streak, exploiting the Internet boom to grab a dominant position in its own particular niche.

At Cowes, Mr Ellison appeared happy to share sporting glory with media tycoon Ted Turner who earlier this week joined him at the helm of the Sayonara for the Fastnet race. In the world of computers Mr Ellison has made almost a fetish of collaboration with other industry leaders such as his friend Steve Jobs of Apple Computer and Michael Dell's eponymous PC business. But Bill Gates of Microsoft remains his arch-rival, someone he is determined to outmanoeuvre. The computer world watches in fascination and few would predict the long-term outcome.

In the waters off the Isle of Wight, Mr Ellison certainly deserved his break from work. In the past five years, Oracle's revenues have quadrupled as companies setting up to operate on the Web have relied on the group's expertise in information storage and manipulation to make it happen. Companies use the Oracle database software to store all their corporate information, everything from lists of customers and suppliers to financial records and legal documents.

With a personal fortune comfortably over the pounds 5bn mark, Mr Ellison is cast in similar mould to our Richard Branson in his willingness to take time away from his desk to dice with death. In February Mr Ellison's love of danger had him steering Sayonara to winning its class in the Sydney to Hobart race that left six yachtsmen dead. His other passion is flying disarmed fighter aircraft. He owns an Italian Marchetti and tried to import a Russian MiG fighter but the US Government refused.

Thrice married and thrice divorced , Mr Ellison at 54 still has the reputation of being the most accomplished playboy in Silicon Valley. It is a reputation Wall Street does not particularly care for, but they have learnt to accept it given Oracle's continuing stunning success. Apart from a nasty blip in 1997 when Oracle appeared to go off the boil, the company has proved a stock market star, its value rising from $10bn to $40bn in the past five years.

In mid-June this year, Mr Ellison stunned Wall Street with exceptional final- quarter results, showing revenues 22 per cent higher at just under $3bn and profits up from $403m to $527.4m for the three months ending in May. Analysts predict that after topping the $8.3bn mark last year, annual revenues might reach $10bn for the current financial year. When Wall Street wobbled last week as Internet stocks including the mighty Amazon.com had a shake-out, shares in the highly profitable Oracle held firm. But Mr Ellison was a relatively late convert to the Internet enthusiasts club. Back in 1996, he took a month off work to play with the Netscape Navigator on his computer and to consult with his long-time friend Steve Jobs. He came back from his self-imposed sabbatical with a business plan for his company and a vision of the future. "The Internet changes everything," he said. He reshaped Oracle Corporation, the computer software business he founded in 1977, in readiness for the Internet age.

In business, as in life, Mr Ellison is not a man who does things by half- measure. He projects an image of flamboyant elegance, in contrast to the nerdish bespectacled Mr Gates. He dresses in Armani suits, sports a permanent tan and his beard is a carefully sculpted designer stubble. Home is a Japanese-style mansion that he had built in Japan, dismantled, shipped across the Pacific and re-assembled in Woodside,California.

His reputation for having a giant ego prompted an unofficial biography of him two years ago entitled The Difference Between God and Larry Ellison: God Doesn't Think he is Larry Ellison. For a character such as this, it is uncomfortable always to be seen in the shadow of Gates the software supremo. Mr Ellison is certainly still a long way from being as rich as the man from Seattle who founded Microsoft and whose reputed $90bn fortune puts him top of the world wealth league table. (Mr Ellison does not yet figure in the top 30.) But Mr Ellison hopes the Internet will help him one day to overhaul his great rival. It will help his ambitions enormously if the US Justice Department decides Microsoft is so dominant a player in the computer world that it must be broken up. Mr Ellison does not believe the break-up will happen, but he does think Microsoft may have missed the Internet boat and he is sure Oracle has caught it.

The Oracle founder grew up in poverty in Chicago. The modest business he founded in California in 1977 expanded as he concentrated on developing the database software for companies to store their information. The company describes itself as "waging search and rescue missions" for that information and allowing many people access to it at the same time.

The software Oracle developed is compatible on every kind of computer. More recently, Mr Ellison has made sure it is also Internet compatible. Oracle has 120,000 business customers in 145 countries, becoming the world's biggest supplier of this database software. As well as a stock market value of $40bn it has a headcount of 45,000. In Britain alone the workforce is now 4,500, the group's largest overseas operation. To keep itself ahead of the game the company spends close to $1bn a year on research. Microsoft spends three times that. Mr Ellison believes Oracle has put itself at the heart of the Internet boom. All the major Internet websites used by consumers - Yahoo, Amazon.com, eBay, E*Trade - rely on Oracle software to reach customers. If the database software market which Oracle dominates has become the core aspect of computing for business, the arrival of the Internet and e-commerce looks likely to increase the importance of this type of software.

Any company setting up a website needs to be able to process its web orders, store customer details and record transactions. Oracle is now at the forefront of showing how it can be done.

In 1996, after Mr Ellison returned from that month-long surf of the Net, he famously announced the death of the personal computer at an information technology show in Paris . He promoted the idea of the network computer, a relatively simple device that could store its data and software on a remote central computer and call it up whenever needed. He said such a product - which could be an adapted TV set - would not need an operating system. Therefore Microsoft's ubiquitous Windows operating system could be by-passed.

Bill Gates dismissed the idea as "Larry's dream". That seems a fair verdict given that last year some 100 million personal computers were sold worldwide and only a handful of the network computers Oracle promoted found customers.

So with that prediction Mr Ellison could not have been more wrong. Or could he? He may recognise if you make a forecast often enough it will eventually come true. In simple terms Larry's dream is to replace the Microsoft Windows operating system with the Oracle software as the dominant orchestrating influence on computing.

Dell and Hewlett Packard are working with Oracle to make computers which do not need an operating system, but do rely on Oracle software. The idea is to move the complexity from the computer on your desk, your laptop or even your mobile, and transfer it to a centralised computer.

Inertia may prevent this vision coming to pass in the next four or five years. But Mr Ellison says that in the business world the systems require lots of highly paid specialists to maintain them, and mean information is fragmented between dozens of different computers. Mr Ellison admits companies such as his focused too much on automating processes and not enough on making sure key decision makers could easily obtain the information they needed.

To help get the message across to other businesses on how they must change to cope with the Internet age, Mr Ellison is determined to apply his ideas within his own business. Ray Lane, whom Ellison chose as his Number Two three years ago, believes the Internet not merely provides the group with lots of new business but will dramatically improve Oracle's profitability. Last autumn Mr Ellison decided that he himself had to "go all the way with Oracle itself becoming a huge consumer of the technology we are trying to sell to other companies".

Mr Ellison dreams of the day when his company's software will enable him and other corporate customers to sit in their HQ offices and see up-to-the-minute information on every sale they make around the world at the touch of a button. This Big Brother vision of how the multi-national corporation may work is in keeping with Mr Ellison's own egocentric management style.

The Oracle view now is that the Internet has made it possible to create a new kind of utility. Mr Ellison says we are already used to using networks to obtain electricity, gas or water. We no longer rely on our own water well nor do we generate our own electricity. The same will be true for the supply of information and knowledge. It can mean for smaller and medium-sized businesses that much of their back-office routine number-crunching can easily be outsourced to specialist companies, a service Oracle is willing to provide.

And when it comes to paying for goods and services, Mr Ellison foresees businesses and consumers all using the Internet as a giant electronic auction house to ensure they get what they want more cheaply and more efficiently.

We know already it is working in bookselling. Oracle seems to have convinced customers such as General Motors it can work for them too. The car giant's GM BuyPower service allows the prospective buyer to browse through every GM make and model, select the vehicle they want, get price quotes, arrange test drives and ask dealers to find and reserve the car they want. They apply for credit online and check competitors' models and prices before making a decision.

Larry Ellison can envisage a time when every market in goods and services - from buying a car to finding a plumber - will become more like the impersonal electronic transactions on currency and stock markets. This may not seem a pleasant prospect to all of us, but Mr Ellison believes it will happen whether we like it or not, and in the long run the technology will make everything cheaper and more efficient in a world of even greater prosperity .

Along the way it may make Mr Ellison, already as rich as Croesus, as rich as Bill Gates as well. He would certainly like that.