How Ranting, Raving Larry Ellison Has Come to Look Like a Visionary

It's time the Oracle founder got his due for foreseeing the rise of 'renting.' Plus, introducing the Hostile React-O-Metricom.
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LOS ANGELES --

Larry Ellison

is not going to like this observation, but he's becoming more and more like

Bill Gates

.

Join the discussion on our

message boards.

Bill whines about the complexity of personal computers; Larry whines about the complexity of the computer industry. Bill compares computers to cars; Larry compares computers to cars. Bill enlists a famous ex-

Laker

(who towers over him onstage) to awkwardly demonstrate his technology; Larry recruits a current Lakers star (who towers over him onstage) to awkwardly plug his charitable causes.

But seriously, for all their many, many differences, Larry Ellison -- co-founder, chairman and CEO of

Oracle

(ORCL) - Get Report

-- truly has become Gates-like in one meaningful way. Just as the

Microsoft

(MSFT) - Get Report

co-founder, chairman and CEO did a computing generation ago, Ellison has more recently predicted a major direction in which the technology industry was traveling. And it's time he got his due.

It is no small task sorting through Ellison's rambling, self-absorbed and highly entertaining stump speech, like the one he gave here Tuesday at Oracle's semiannual meeting for financial analysts. But his message has been consistent for the latter half of the decade, and the speech remains essentially unchanged: The future of computing is in software applications shared over a network, and in hardware designed and priced to serve those needs.

"Renting" software in the form of application service providers is all the rage now, but Ellison has been talking about the concept for years. Indeed, Oracle is collecting meaningful revenue from software rentals. Devices such as cell phones and

Palm Computing

toys are becoming sexier than PCs as Web-browsing tools. Ellison predicted this, too. True, Ellison goofed in guessing that network computers at $500 each would knock PCs from their perch. PCs got too inexpensive for that to come true. But he did get Oracle ahead of the e-business curve so that the database company could offer software packages that help its big-business customers Webify themselves.

"I think they're in front of a wave that's going to last five to seven years," says New York-based analyst Doug Crook of

Prudential Securities

, who rates Oracle a strong buy and has made it his "single best idea" for clients. (Prudential hasn't recently performed underwriting for Oracle.)

So has all this gone to Ellison's head, especially as the company's stock has run up into the stratosphere? Absolutely.

Noting that the former Oracle subsidiary

Network Computer

, now called

Liberate Technologies

(LBRT) - Get Report

and still controlled by Oracle, is worth $6 billion, Ellison remembers that Gates once harshly disparaged the network computer concept. Says Ellison: "Pretty good for a stupid idea."

That sets Ellison off on a hilarious riff he calls Microsoft's "Four Stages of Stealing Someone Else's Idea":

    Say it's the stupidest idea you've ever heard.

    Acknowledge that there's some merit to offering easier-to-use products at lower prices, but insist PCs can do the job just as well.

    Announce your own product, as Microsoft did this week with its Web Companion network computer.

    Declare that "it was our idea in the first place. All we ask is the chance to innovate."

    Again, through the haze, Ellison is talking sense -- and gamely making a compelling case that Oracle will be a big winner for years. Best-of-breed applications are fine, he argues, but having one company with a broad product offering ultimately bests having numerous vendors. Imagine trying to buy a car with a

    BMW

    engine and a

    Ford

    body. Can't do it. This evokes Bill Gates' standard line that if the automobile industry innovated the way the PC industry has, then cars would be traveling at thousands of miles per hour and cost pennies. (That quip famously prompted counterquips that if cars behaved like PCs, they'd freeze up and crash while traveling down the freeway.)

    Like Gates, Ellison bemoans that computing is too complex. "You wonder why people in our companies hate us," he says of the typical information-technology worker in a typical company. "We act like it's a do-it-yourself kit. Cars are cheap, and they work." Finally, this is apropos of nothing, but when Ellison brought up

    Shaquille O'Neal

    to help make a pitch for donating computers to underprivileged kids, he looked exactly the way Bill Gates did at the Comdex computer trade show in 1997 when

    Kareem Abdul-Jabbar

    showed just how little he knew about computers.

    One last intriguing comment about Larry Ellison. Despite building a multibillion-dollar enterprise, Ellison's Oracle has a long history of inconsistent earnings performance. Sometimes it blows away Wall Street's estimates, and other times it misses badly. Asked Tuesday why Oracle can't be more consistent, Ellison was characteristically candid.

    "I understand the game," he said, referring to the earnings-management shenanigans other companies play to woo Wall Street. "It's just not high on my list," he concluded, pointing out that although quarter-to-quarter performance may be erratic, year-to-year growth has been steady.

    You can count on Larry Ellison to be outrageous. And you can count on him to be insightful. Just don't ever count him out.

    Metricomrades in Arms

    I'm borrowing

    Herb Greenberg's Hostile React-O-Meter

    just to contend with the fans of

    Metricom

    (MCOM)

    and its

    Ricochet

    wireless modem service. The piece here

    Monday, wondering if Metricom -- which after seven years as a public company is still very much a start-up -- will ever grow into its lofty valuation, elicited oodles of responses, most of them dripping with hostility.

    For example, to the inventive

    Metricomrade

    who asked, "Did you confirm the 30,000 subscriber number yourself, or is that lifted from some older diatribe and reused without checking?" I say the following: I attended a briefing by Metricom's management last week in San Diego, which I noted. You might want to check such easily obtainable figures yourself before firing them in my direction.

    One reader who later revealed himself to be a Metricom engineer (bless him) asked if I am "just another opinionated columnist kicking up dust, justifying

    my existence." Dust, what dust?

    But the best comment was from a reader who said he knows 10 "early adopters" who've signed up recently for Metricom's service, proof positive this thing is going to be big. "BTW," he concludes, "I have never seen one of your articles that did not irritate me." Don't I get points for consistency?

    The bottom line is this: Metricom's leadership by and large seems to be a bunch of nice guys, and its service appears to work well. What is less certain is if this thing will fly.

    MCI WorldCom

    (WCOM)

    , which is becoming a major investor and promised customer, is planning to begin focus-group testing of wireless modem service this month, according to Metricom. This invest-first/focus-group-later approach seems to be putting the cart before the horse, and that's just my point. This is the type of project best left to commercial lenders, high-yield debt specialists, strategic investors (such as MCI WorldCom) and rich guys such as

    Paul Allen

    .

    If Metricom CEO Tim Dreisbach -- one of the aforementioned nice guys -- is at the

    American Electronics Association

    conference next year with far fewer than 140,000 subscribers and more grand plans, my doubts will have been realized. If Metricom is cooking and on its way to meet its projection, public investors who hold off will have missed out on an opportunity -- and I'll be forced to eat crow.

    Adam Lashinsky's column appears Mondays, Wednesdays and Fridays. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Lashinsky writes a column for Fortune called the Wired Investor, and is a frequent commentator on public radio's Marketplace program. He welcomes your feedback at

    alashinsky@thestreet.com.