Larry Ellison & The Information Superhighway

FEAR, DOUBT, AND CHAOS
By Anthony B.Perkins
From December 1992 issue

Larry Ellison: "Better to be lucky than smart."

While socializing at Gina Smith's party celebrating the launch of her new magazine, Electronic Entertainment, I nearly ran over The Wall Street Journal's newest technology reporter, Don Clark. I was, perhaps, a little dizzy from test driving Crystal Dynamics' Crash and Burn computer game, or maybe from too many turns in the flight simulator, but it was good to see Don and trade computer industry insights. That night, we agreed that while we are sitting on the precipice of a great new era in computer, communications, and entertainment technology, there exists a high degree of uncertainty in the industry -- even at the top levels of management. It seems as if everywhere The Herring turns lately, we are running into executives explaining that their industries are moving so fast that it's impossible to predict where their companies are going to be in two years.

Bill Gates admitted in these pages that a year ago he was planning to put a version of his Windows operating system in your TV, but Microsoft ultimately decided that Windows wasn't the right paradigm for the TV/PC. In an interview in the November/December issue of the Harvard Business Review, Silicon Graphics CEO Ed McCracken pointed out that "Long-term planning weds companies to approaches and technologies too early and is a dangerous strategy for a computer company. Three years is long-term. Even two years may be. Five-year planning is laughable."

Oracle CEO Larry Ellison recently told us at a meeting of the Churchill Club in Palo Alto that he never really gave much thought to the implications of the information highway, even as recently as a year ago. When the information highway hype reached a high pitch, Mr. Ellison finally looked into what role his company might play in the emerging market. To his delight, Mr. Ellison found out that the joint work Oracle had done with the Oregon-based, massively parallel supercomputer company, nCube, fit in perfectly with the projected technology demands of the digital video revolution. All of a sudden, Oracle is one of the leading players in the hottest game in town. Even the brilliant and strategically savvy Mr. Ellison admitted that it was "better to be lucky than smart."

At the Western Cable Show in Anaheim this month, cable moguls Ted Turner, CEO of Turner Broadcasting, TCI's John Malone, and Fox's Rupert Murdoch admitted that they couldn't be positive where the entertainment industry is going. Mr. Turner wondered out loud how people who can't even program their VCRs will be able to browse through a computerized TV that offers thousand of options. Mr. Malone vaguely predicted that gambling might be a big hit in interactive cable. Mr. Murdoch said he thinks that couch potatoes will want to pay for movies but not much else. Even interactive entertainment industry veteran Trip Hawkins couldn't offer a clear picture of what the public will want out of their TV/PC when it finally hits their living rooms.

1993 was a wild year in which new product innovations and emerging market opportunities sent computer and entertainment companies spiraling into confusion and chaos. But while puzzled looks can be seen running across the faces of the biggest industry titans, so are the smiles of excitement and anticipation. The one thing you can bet on is that everyone is running as fast as he can. 1994 is going to be a great year, and The Herring is happily holding on tight for the ride.