Photo: Courtesy of Paramount Pictures
Wow. Oracle CEO Larry Ellison — who oversaw his company’s acquisition of hardware-maker Sun in 2009 — just pointed a bazooka at former Sun CEO Jonathan Schwartz…and then pulled the trigger.In a detailed Reuters story about Oracle’s post-acquisition plans, Larry explains that the reason Oracle was able to buy Sun for cheap – about $5.6 billion excluding debt – was that “[Sun] management made some very bad decisions that damaged their business and allowed us to buy them for a bargain price.”
Larry told Reuters that Jonathan spent too much time on his blog (translating it into 11 languages!) and too little time solving Sun’s management problems.
“The underlying engineering teams are so good, but the direction they got was so astonishingly bad that even they couldn’t succeed,” Ellison told Reuters. “Really great blogs do not take the place of great microprocessors. Great blogs do not replace great software. Lots and lots of blogs does not replace lots and lots of sales.”
Larry told Reuters Jonathan’s biggest goof was the way he handled Sun sales people.
First, Jonathan allowed them to be paid based on deal sizes, not on profit. Larry says this made it so “the sales force could care less if they sold things that lost money because the commission was the same in either case.”
Then Jonathan laid off salespeople at StorageTek, a Sun subsidiary that sells mainframe storage to the enterprise.
“They just got rid of them all,” says Larry.
“Guess what? Sales dropped. It’s breathtaking!”
Business Insider Emails & Alerts
Site highlights each day to your inbox.