The fox is widely regarded as a cunning and crafty animal. However, the behavior of a fox in the wild may seem erratic and odd. That's where the phrase "crazy like a fox" comes from; the outward behavior of the fox is not an indicator of its inner ingenuity.

Considering this cliché in terms of the IT industry, I note that Larry Ellison, CEO of Oracle, is not only "crazy like a fox" but also so ingenious that we should consider changing the phrase to "crazy like Larry."

What is so cunning and crafty about Larry Ellison's behavior? Plenty. Let's start with the broad view and then narrow our way down to specifics.

Put Yourself in Larry's Shoes

Imagine that you are the CEO of a large commercial software company. You are surrounded by companies that want their "share of wallet" from your existing and target customers. Your competitors are the easiest to understand because they want to take money away from you. They will do their best to eat the lunch sitting on the plate in front of you if you don't get to it first.

But your hardware partners aren't exactly your best friends either. They are constantly delivering higher performance in their products, but at the same time they are trying to make you sell your product at yesterday's price, or even worse, at a lower price. As the CEO, do you think that's fair? Your partners are still getting their share of revenue, but they want you to charge the same or less because their new machines are faster. Where's the love?

Your operating system associates are even worse. You have to spend enormous amounts of time tuning your products for their environments and coordinating customer support with them. Do they return the favor with loyalty and support? They most certainly do not. Instead, they get into the commercial software business and begin to compete head to head with you. Is that equitable? Are you just going to sit there in your expensive office and take it?

Not if you're Larry.

The Name of the Game

I argue that Larry Ellison is "crazy like a fox" because he has consistently demonstrated an ability to change the rules when he finds himself in a game that he doesn't like. We don't have to look far to find evidence of his wily behavior. Here are four examples:

Oracle Real Application Clusters (RAC) on Linux. The move to heavily promote RAC on Linux was an attempt to kill two birds with one stone. First, RAC's inherent ability to distribute a single database over a number of servers was a feature that Oracle's primary competitors, Microsoft and IBM, could not (and still cannot) match. Second, moving to a Linux platform let Oracle reduce the cost of the operating system component. Instead of shelling out dollars for Windows or a commercial Unix distribution, users could opt for a low-cost Linux distribution — not that users actually saw much revenue reduction. Oracle managed to snap up most of it in the base cost of RAC. See? Didn't I say "crazy like a fox"?

Oracle Unbreakable Linux. Oracle's primary operating system partner for Oracle RAC has been Red Hat. But, as I previously noted, Red Hat felt the need to make money in the process. In the case of Red Hat, money primarily comes from support contracts. However, Oracle wasn't particularly happy with this arrangement, so it came out with its own Linux distribution, Oracle Unbreakable Linux, based on the same open-source code that goes into Red Hat Linux. This tactic gave Oracle better negotiation leverage with Red Hat and more control (and more revenue) from customers who select Unbreakable Linux. Cunning? You bet.

Oracle VM. The rise of virtualization in the server market has undermined some of the importance of the operating system vendors and fortified EMC/VMware as a powerful vendor. With that power has come resistance to negotiations. Larry doesn't like that. Larry wants Oracle to have the upper hand in negotiations. So what does Oracle do? That's right, it changes the game. Oracle comes out with its own virtualization product to compete with EMC/VMware. As in the previous case, this lets Oracle capture some revenue that might have been lost to EMC/VMware, and it gives Oracle more negotiating power with EMC/VMware. Crafty, right?

PeopleSoft. Oracle's acquisition of PeopleSoft is an excellent example of Larry killing two birds with one stone. With respect to the first bird, PeopleSoft was Oracle's most significant competitor for human resources software; therefore, this acquisition put Oracle at the top of the heap in this market segment. As for the other bird, Oracle wanted to be more dominant in the area of identity management solutions, and what better way to establish a bigger footprint than by controlling the largest footprint of human resources data (HR data is typically recognized as the authoritative source in most identity management solutions). You have to admit, this is a pretty ingenious strategy.

No matter how you feel about Larry Ellison, Oracle, and Oracle products, you have to admire the ingenuity of the Larry Show. In a world in which vendors viciously compete to outdo each other on a feature-by-feature basis, Larry Ellison and Oracle manage to keep changing not only the rules of the game but also the game itself.

Foxes in History

Don't get me wrong, I'm not suggesting that Larry Ellison is a beacon of light on the fog-shrouded shorelines of IT. Nor am I suggesting that Larry's approach is the best approach for you. I'm suggesting that it's the best strategy for Oracle. If you follow Oracle's beacon, you may or may not steer your way to safety, but one thing's for sure — you're going to pay the light keeper for the privilege of following that light.

Ultimately, Oracle's products will succeed or fail on an individual basis. No strategy, ingenious or not, can overcome bad products. But product quality is not Oracle's problem in the market. As stated, Oracle's problem is the nature of the market — its competitors, its partners, and its partners-come-competitors. This is where strategy really matters.

History is replete with famous foxes: Reynard the Fox. Sir Russell Fox. The Fox and the Crow. And Brer Fox, to name a few. All these foxes are cunning, many of them crafty as well. When you compare them with Larry Ellison, though, they fall far short. I stand by my suggestion that we should change the cliché to recognize Larry's foxlike behavior.

Sean Chandler is a computer and network consultant who has nearly 30 years of field experience. You can reach him at schandler@SystemiNetwork.com.