Oracle hit by resignation of another top exec

Users of Oracle Corp.’s database software have downplayed the likely impact they will feel from the resignation of Gary Bloom, an executive vice-president who was in charge of Oracle’s database development activities and numerous other key functions at the company. But some analysts said Bloom’s planned exit will further thin Oracle’s management ranks.

Oracle announced Bloom will leave as of Dec. 15 to become president and CEO of Veritas Software Corp., a Mountain View, Calif.-based maker of storage management software. Bloom is the second high-ranking executive to leave Oracle in the last five months, with his resignation following the July departure of Ray Lane, Oracle’s former president and chief operating officer

Bloom, a 14-year Oracle veteran who was responsible for elements ranging from database development to internal IT operations to worldwide marketing and customer support, said during a conference call held recently by Veritas that the CEO job at that company was “an opportunity I could not refuse.” Bloom said there was “no lack of opportunity for me at Oracle,” but he noted that getting the CEO job there was unlikely because of the continued presence of company founder Larry Ellison.

“I have a career desire to be a CEO,” Bloom said. “The way I look at it, Oracle is clearly under Larry’s leadership. He’s more engaged than ever. That was a limiting factor as far as career progression for me.”

Doug Cummings, manager of new technologies at Oracle user Vicor Corp. in Andover, Mass., said he’s not concerned about Bloom’s departure. “Their products are still quite good, just very expensive,” Cummings said. “I do think that the exodus of several key executives is noteworthy, and as customers we need to stay aware and watch the effect this has on Oracle. I’m just not ready to send up a flare yet.”

Rich Niemiec, president of the International Oracle Users Group – America, a Chicago-based organization that represents Oracle’s database users, had a similar reaction. “I think that you have to look at Oracle from a longer-term perspective than people have been recently,” Niemiec said.

“They’ve built the road map to incredible cost savings,” he added, referring to Oracle’s recent proclamation – issued, ironically, by Bloom – that the vendor had cut internal expenses by US$1 billion annually through the use of its own Internet-enabled software and is now seeking to double that savings level.

Phil Russom, an analyst at Hurwitz Group Inc. in Framingham, Mass., said he has heard similar reactions from users. The users Russom talked to recently “obsess over changes in Oracle’s product pricing and packaging,” he said. “[They] have no interest in Oracle’s management changes. I see [Bloom’s] departure from Oracle as just another short-term glitch.”

But other analysts weren’t so sure about Oracle’s ability to withstand the resignation of a second senior-level executive in less than six months. Many had considered Bloom to be a potential heir-apparent to Ellison, particularly after Lane left the company following a falling-out with Oracle’s CEO.

“One of the patterns at Oracle is that the position of ‘most likely to succeed’ has been changeable over the years,” said Carl Zetie, an analyst at Giga Information Group Inc. in Cambridge, Mass. “Either way, the executive ranks are starting to look thin, and retaining top talent will remain a challenge for Oracle.”

Mike Gilpin, another Giga analyst, said recent user complaints about exorbitant power-unit database pricing schemes and product quality could be “external symptoms” of internal management upheaval. “There are just fewer and fewer heavy hitters in Oracle’s senior management who really have a solid background in running a big software company, or some piece of one,” he said.

Russom insisted, though, that only the departure of Oracle’s founder would really shake users of the company’s software. “I assure you that almost no one batted an eye when Ray Lane left,” he said. “It will be the same with Gary Bloom. When Ellison leaves, now that will be the defining moment for Oracle, its customers and its investors.”