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To: Lizzie Tudor who wrote (64862)9/27/2003 11:20:31 PM
From: hueyoneRead Replies (1) of 76351
 
Here's one for you Lizzie.....

http://online.wsj.com/barrons/article/0,,SB106452330197873100,00.html?mod=b_this_weeks_magazine_tech_week
Andreesen v. Ellison: Marc Tells "Why Larry's Wrong"

WHEN YOU THINK OF POSTER CHILDREN of the Internet age, Marc Andreesen definitely comes to mind. The boy-wonder cofounder of Netscape is a creaky 32 years old now, a veritable grandpa among the latest crop of audacious entrepreneurial geeks in Silicon Valley. Still, he is best known for being the University of Illinois undergraduate who orchestrated the creation of the first Web browser. Since being plucked out of the soybean fields of central Illinois by former Silicon Graphics Chairman Jim Clark to launch Netscape, Andreesen went on to be chief technology officer at America Online as part of that company's acquisition of the commercial browser company. After that, Andreesen launched Loudcloud, a start-up that hosted, automated and ran data operations using the Web. Since then, Loudcloud spun off its hosting operations to EDS and has reinvented itself as Opsware, a software concern selling data-center automation software.

So what's Andreesen up to now? The software whiz has been working hard to retool Opsware and salvage his 14% stake in the Sunnyvale company. So far, so good. Opsware has recently racked up some big customer wins and its shares are up sevenfold to 8, from about a buck a year ago. Andreesen says he is modeling Opsware's growth strategy after PeopleSoft and other prebubble software success stories, meaning that profits matter. "It's the old-fashioned way to do it," Andreesen says.

And while the Opsware chairman is happy to talk about his newfound skills as a turnaround artist, that is not the real reason why he asked me to lunch. Because for a nascent independent software company to grow into a $1 billion-a-year behemoth, best-of-breed innovation is going to have to not only survive but thrive. Over sushi and sashimi, he flips open his notebook computer to a digital slide presentation entitled: "Why Larry's Wrong."

It makes perfect sense. As part of his takeover dialogue of PeopleSoft, Oracle chief executive Larry Ellison has been verbally running roughshod over the debate about information technology, its relevance and its future innovation. "Best of breed is dead, except for dog shows," he has said.

For the most part, Ellison has been preaching that innovation doesn't matter and that consolidation will rule the day. And as the database magnate and America's Cup racer predicts that big fish like PeopleSoft, Siebel Systems and BEA Systems will get devoured or become extinct at the hands of Oracle, SAP, IBM and Hewlett-Packard, that doesn't give much room to believe that guppies like Andreesen's Opsware have a chance in Hades.

"The idea that Silicon Valley is going to come back and be anything like it was in the past with hundreds and thousands of start-ups, the Silicon Valley of old where people talk about deal flow and venture capital, a new company every day -- that's over, and that's a good thing," Ellison has said.

Andreesen respectfully -- and quite understandably -- disagrees. He contends that we are simply entering another era of computing, and for the first time in his career, Ellison is on the wrong side of the curve. "For 25 years, he has been on the right side of trends," Andreesen says. "Now, he's using consolidation as a self-serving prophecy."

Andreesen argues that Oracle's core database business has matured, and Ellison is desperately groping for growth and using Darwinian takeover tactics as a way to obfuscate his company's potential irrelevance. Ellison built Oracle by emulating once-formidable Digital Equipment's vaunted database during the minicomputer era. Conventional wisdom was that databases needed to be purchased from the same vendor that made the computer. Ellison saw great opportunity in defying that thinking, launched his own best-of-breed database company -- at least from a marketing and sales standpoint if not a technological standpoint -- and the rest is history. Oracle has proven to be the dominant database concern of client-server computing.

"Either Larry is completely wrong or just very good at [rewriting history], otherwise Oracle should not exist today," Andreesen retorts.

"Every time there is a big new important software innovation, there is one big, new, independent software company that ends up owning dominant market share, and Oracle did that," he recalls. People forget that "in the early 'Eighties, DEC was hugely powerful, and they tried to squash Oracle like a bug, but Oracle still walked away with the market," Andreesen says.

Now Ellison is big foot, and Andreesen asserts that he might be suffering from short-term memory loss. It is pragmatic for him to preach the end of innovation, Andressen says, because his company is potentially the second-coming of DEC, which today is extinct except for whatever remnants remain buried within the organizational structure of HP (Compaq bought DEC in the 1990s).

Andressen argues that we are entering a new cycle in computing, shifting from the client-server platform to Web-based architecture. The old client-server stuff is maturing, consolidating and in some cases dying, but the new Web architecture innovations are thriving. He points to the continued growth of Internet users, broadband subscribers and buyers of goods online as proof that purveyors of Web-enabling software, such as BEA, Veritas, Mercury Interactive and Opsware, have bright futures.

Of course, Ellison isn't buying. "I like Marc a lot, and I tease him too, because he's young and I'm not -- but Marc said to me, 'Larry has to be wrong because innovation comes from companies that are two years old, populated by 19-year-olds.' Of course, Marc believes that because he's young... [But] it's just preposterous that Marc Andreesen should think that innovation is somehow the province of little entrepreneurial companies."

While it may not sound like it, Ellison is said to have respect for Andreesen because the young hepta-millionaire is willing to stand up to his richer elder. For whatever reason, it's probably a good thing that Andreesen is around to remind Ellison that he was young once, and that so was Oracle.
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