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The Hardest Job In Silicon Valley


In the wee hours of Dec. 28, John Wookey was awakened by fire alarms at Disneyland's (DIS) Grand Californian Hotel. A six-story plastic Christmas tree had caught fire and, as smoke filled the air, Wookey and his wife bundled up their three kids and hustled them outside. They spent three hours huddled with other guests in a theater at the darkened theme park. Says Wookey: "We didn't know if the whole hotel was burning down."

Still, for Wookey this counted as relaxation. As Oracle Corp.'s (ORCL) senior vice-president in charge of applications, he has one of the toughest jobs in software. Over the past two years, Chief Executive Lawrence J. Ellison has spent $19 billion buying up 14 rivals in the corporate software market. His buying binge included paying $10 billion for PeopleSoft Inc. and $5.8 billion for Siebel Systems Inc. That was the easy part. Putting it all together is Wookey's job. "My head is the one on the chopping block if this doesn't work," deadpans Wookey. He's mostly joking, but in the past Ellison has been quick to fire executives who don't perform.

The plan is to meld the best of what Oracle has bought into a new suite of software code-named "Project Fusion." The integrated package will help corporations run everything from accounting and sales to customer relations and supply-chain management. Ellison's hope is that Fusion -- together with all the new customers he landed with his acquisitions -- will finally give him the edge he needs to overtake the top corporate applications company, Germany's SAP (SAP).

STIFF COMPETITION

While analysts applauded all of Ellison's purchases as they came along, they're now skeptical about Oracle's ability to execute on its strategy. Says John R. Rymer of research firm Forrester Research Inc. (FORR): "I'm not saying it's impossible, but it'll be really, really hard to be successful." Oracle's stock has slid 14% in the past two years and the price seems mired in the 12-to-14 range.

Meanwhile, SAP is flying high. It holds 21% of the corporate applications market, vs. Oracle's 11%. And on Jan. 10, SAP said that preliminary results for the fourth quarter show that software license revenues rose 18%, suggesting it's picking up more share. "SAP is becoming the standard for business software," says William McDermott, CEO of SAP Americas. "Oracle is in a state of chaos."

To get Oracle's market share growing, Wookey must build a new suite of software applications -- using the latest technology and drawing the best from each of the acquired companies. He has to persuade customers to wait for him to finish his task and then gradually switch more of their computing jobs to run on Oracle software. And he has to fend off SAP, which is attempting to take advantage of customers' uncertainty and pick them off.

The tech world will get its first indication of how well Wookey is doing on Jan. 18, when Oracle presents a progress report. Wookey plans to lay out the technical details of how Oracle is piecing together the components of Fusion -- and then map out interim goals before the planned 2008 release of the entire suite of applications. One key message: Customers should go ahead and buy Oracle's existing middleware -- software used to make diverse applications work together smoothly -- because it already fits with the acquired applications and will be the foundation for the Fusion applications that are coming. "We're trying to leave people with the impression that they've made a good investment and we're doing a good job supporting them in that investment," Wookey says.

ARMANI OR MEN'S WEARHOUSE

The grand vision to take on SAP by fusing the best of the rest is all Ellison's. But while he's the mastermind, Wookey is the foreman. Wookey has worked at Oracle for a decade, earning his stripes as an executive in the customer relations and accounting groups. His career took off after he ran a pet project of Ellison's: building applications for the health-care industry. He was promoted a year ago to run the entire applications business.

The two men stand in stark contrast to each other. Wookey once quipped during an Oracle event as he was taking the stage after Ellison that the Armani part of the program was ending and the Men's Wearhouse part was starting. While Ellison enjoys fast cars, fast boats, and fancy suits, Wookey is a devoted family man. He gets up at 4:15 a.m. every day for a jog and dog walk, works for several hours, then takes the kids to school. At work, while Ellison is brash and contentious, Wookey is a soft-spoken diplomat. He's known for his straight talk and dry wit.

That disarming style has made him the perfect goodwill ambassador to the customers Oracle has swallowed up through acquisitions during the past year. Since he took command of the Fusion project, he has crisscrossed the world making personal appeals to customers. To make sure he's on the right track with Fusion, he vets his plans with an advisory council of customers. SAP has lured away a few high-profile customers, such as Samsonite Corp., but most are holding firm, at least for now. "[Wookey] has given Oracle more credibility, and I'm willing to wait out the time frame," says John Matelski, deputy chief information officer for the city of Orlando. But he adds a warning: "If 2008 rolls along and they are way behind, I'll have to rethink that strategy."

Within Oracle, Wookey's greatest strength is as a consensus builder. Every Monday at midday, he presents progress reports to Ellison and Co-Presidents Charles E. Phillips Jr. and Safra A. Catz. After that, he meets with his 14 senior staff members to hash out nitty-gritty product details. There's vigorous debate over how the applications should be built and what features are most important. The Oracle of old might have been paralyzed, but Wookey keeps things moving.

MR. NICE GUY

Typical of Wookey's style was a four-hour meeting with his top staff on Jan. 4. Looking around the conference room, it was hard to tell who was in charge. Wookey didn't sit at the head of the table, and he let others do most of the talking. As developers argued over arcane technical matters, Wookey weighed in to resolve debates -- often by reminding them what customers had asked for.

One of Wookey's most notable victories was holding on to the software writers who came to Oracle from acquired rivals. So far, nearly all of the developers to whom Oracle offered jobs are still with the company. "I had an image that everyone [at Oracle] had been growing horns," says John Schiff, a former PeopleSoft manager. "But John expressed the importance of family values, and you see it in his own behavior. It's just very comfortable."

While the technical challenges are daunting, Oracle has potent weapons. It's the leader in the database software market, with a 30% share to IBM's (IBM) 26%. And it has been gaining ground rapidly in middleware. Oracle is the only one that's a strong player in all three: databases, middleware, and applications. That's important because customers prefer to buy software packages that are tuned to work well together, and Oracle does that.

Timing is key. SAP has its own middleware, called NetWeaver. It's further along in modernizing its applications with the latest technologies. And it doesn't face the awesome technical challenges that Oracle does in melding all those applications from different companies.

If Wookey can meet his deadlines and take full advantage of Oracle software franchises, he'll have a fighting chance as the battle between the tech titans heats up. If not, he might find himself on another vacation. Only the next one could be permanent.

By Sarah Lacy


The Good Business Issue
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