PhillyDeals: Oracle buys cloud-computing firm

"We're looking to hire somewhere on the order of 4,000 to 5,000 globally" this year, said Bill McDermott, cochief executive of SAP.
"We're looking to hire somewhere on the order of 4,000 to 5,000 globally" this year, said Bill McDermott, cochief executive of SAP. (CRAIG RUTTLE / Bloomberg News)
Posted: October 27, 2011

Oracle Corp. boss Larry Ellison didn't used to like this cloud-computing thing.

He expected Oracle would keep selling big business software systems, updates, and maintenance onto client servers, instead of letting customers move their secure data functions online to the world computing cloud.

In a famous 2008 investor conference (you can watch it on YouTube), Ellison called the cloud-computing idea "gibberish" and "crap" and "idiocy."

But on Monday, Oracle agreed to pay $1.5 billion for RightNow Technologies Inc., a Bozeman, Mont., firm that makes cloud-based customer-management software in competition with Newtown Square-based SAP Americas, Oracle's rival.

One man who helped Ellison find the cloud is Greg Gianforte, RightNow's chief executive and 20 percent owner, whose King of Prussia upbringing launched him all the way to Montana and the software elite.

At Upper Merion High School, Gianforte was Class of '79 president and cocaptain of the undefeated football team. In his spare time, he left cards at the local Radio Shack, advertising custom software. "I don't know where he learned" to code, said his dad, Frank, a retired engineer for General Electric Co.'s former Philadelphia satellite operation.

"His grades were not the best," but Greg is "highly intuitive," his father added. "Greg would look at a problem and fix it. I'd come home from work and find the neighbor men lined up at my garage for him to fix their lawn mowers.

"And he always had a business bent. When he was president of the senior class, he noticed after football practice how his teammates were running to Wawa to buy Gatorade. So the next day, he was out there selling Gatorade at the school snack bar, in his shoulder pads, at 10 cents less than Wawa."

Greg graduated from Stevens Institute of Technology and went to work with the smart guys at Bell Labs. He married a coworker and started a family, but he and his friends rebelled at the AT&T bureaucracy, Frank said: "They decided Bell couldn't get out of its own way." They left and started Brightwork Development, writing programs to fix computers remotely. They sold Brightwork to McAfee Associates in 1994, and Greg and his wife went house-hunting in Montana.

Montana? Greg's middle-school science teacher, Tim Frable, ran summer trips to the Montana Rockies. The kids hunted, fished, fell in love with the place. Classmate Craig Lange became a federal ranger there. Greg kept visiting.

After Brightwork, Greg settled his family in Bozeman, home to Montana State University, and founded RightNow, which employs 700 in Montana.

In the statement marking the sale, Gianforte said Oracle would expand in Bozeman. The deal will also likely boost his personal foundation, which specializes in "microloans" to local firms.

Help wanted

Oracle rival SAP reported fat profits and higher sales Wednesday. And it's adding staff: "We're looking to hire somewhere on the order of 4,000 to 5,000 globally" this year, including "a few hundred more new jobs in Newtown Square, and 300 to 400 more in 2012," cochief executive Bill McDermott told me. The company employs about 2,500 locally.

SAP said revenues from its employee- and customer- tracking, mobile-application, and portable-memory software and services topped $3.4 billion for the quarter, up from $3 billion a year earlier. Profits more than doubled, to $1.25 billion, though the increase was juiced by lower liabilities from Oracle's long-running software-theft case against SAP.

McDermott said SAP's past business decisions primed it to boost sales from the cloud- and smartphone-based systems that cash-rich global corporations are rapidly installing.

Despite the general economic slump, "there is a shortage of highly skilled IT professionals who have a real handle on the new global info tech market we're in," especially in the United States, McDermott added.

There are plenty of IT veterans looking for work, I pointed out. They need retraining, he said. "Governments should support training curriculums as a component of the benefits" paid to unemployed and displaced workers.


Contact columnist Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.

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