Oracle Corp - Early History

EARLY HISTORY

In 1977, computer programmers Lawrence J. Ellison and Robert N. Miner co-founded a software firm, named Oracle Systems Corp., in Belmont, California. With their combined experience designing specialized database programs for governmental organizations, the men convinced the Central Intelligence Agency (CIA) to award them a $50,000 contract to develop a customized database program. Ellison and Miner also began developing and marketing database management systems (DBMS) software for business clients. Ellison, as president and CEO, headed up sales and marketing efforts while Miner oversaw software development. Well known venture capitalist Donald L. Lucas served as chairman of the board.

While working on the CIA project, Ellison became interested in IBM's efforts to develop a relational database that would allow computer users to retrieve corporate data from a variety of sources using Structured Query Language (SQL). Believing SQL would emerge as a standard language in the database industry, Ellison and Miner began working on developing a similar program for minicomputers. In 1978, the fledgling firm unveiled Oracle RDBMS, the world's first relational database using SQL. One year later, Oracle began shipping RDBMS, beating IBM to the market by nearly two years. With 24 employees and a customer base of 75, the company reported annual revenues of nearly $2.5 million in 1982. Approximately 25 percent of those revenues were earmarked for research and development. That year, international expansion efforts resulted in the founding of Oracle Denmark.

In 1983, Oracle developed the first portable RDBMS, which allowed firms to run their DBMS on various machines including mainframes, workstations, and personal computers. The product boosted annual sales to more than $5 million. By the mid-1980s, Oracle had become known for both innovative technology and competitive advertising. Ellison and Miner took their company public in 1986. By that time, sales had reached a record $55.4 million and Oracle was recognized as one of the world's fastest-growing software companies. The company's rapid growth came in large part from its ability to develop applications that worked across the previously incompatible computer systems of large corporations. New product launches included a distributed DBMS. Based on SQL-Star software, the system granted users the same kind of access to data stored on a network they would have if the data were housed in a single computer.

By 1987, the number of software companies using Oracle products as a foundation for their applications had grown five-fold. As a result, the firm created a value-added reseller (VAR) alliance program as a means of fostering cooperative selling and merchandising relationships with other software makers. At the same time, Oracle also became the relational DBMS of choice for most major computer manufacturers, and the firm continued to develop software compatible with an increasing number of hardware brands. Sales exceeded $100 million. With more than 4,500 end-users spanning 55 countries, Oracle ranked as the largest database management software company in the world.

New products in 1988 included the Oracle Transaction Process Subsystem, a software package designed to speed processing of financial transactions. This new program allowed the firm to target banks and other financial institutions. Further diversification came with the launch of a line of accounting programs, including a database designed to work with the Lotus 1-2-3 spreadsheet program. The company also unveiled a line of computer-aided systems engineering (CASE) application development tools, including CASE Dictionary and CASE Designer products, and its first version of a DBMS program for Macintosh systems. That year, Oracle established a new subsidiary called Oracle Complex Systems Corp. to offer systems integration services to its clients. Services like these eventually came to account for half of the firm's revenues.