Oracle's head of cloud left after butting heads with Larry Ellison, source says

• A source tells Business Insider that 22-year Oracle veteran Thomas Kurian has butted heads with his boss, founder, CTO and executive chairman Larry Ellison.
• Bloomberg reports that the issue concerns Oracle's strategy on its cloud computing.
• Kurian may have been advocating for a cloud strategy that is as risky as it is wise.

Last week, the Oracle eco-system was surprised to learn that Thomas Kurian, one of Oracle's longest serving executives in charge of Oracle's all-important cloud business, had left for an extended leave of absence.

Inside Oracle, word is that Kurian's departure was due to butting heads with his boss Larry Ellison, a source tells Business Insider. This person says that Kurian's good-bye was intended as a resignation, although the company says that he has not resigned but is simply "taking some time off. We expect him to return soon," a spokesperson said.

The disagreement seems to have centered on the direction Oracle should take with its bet-the-company cloud computing business, reports Bloomberg.

Sources told Bloomberg that Kurian was pushing Ellison to allow more of Oracle's software to run on clouds that compete with Oracle, particularly market leaders Amazon and Microsoft.

If true, this disagreement between the two strategies, and the two men, would not be surprising. Both of them are known for being tough, outspoken and opinionated - characteristics which describe a lot of Oracle's culture.

A page ripped out of the Microsoft playbook

If Kurian is pushing Oracle to embrace multiple clouds - even the clouds of its bitter enemies - the strategy would make a lot of sense.

It's similar to what Microsoft CEO Satya Nadella has done. There was a time when Microsoft's Bill Gates and Steve Ballmer were protectionist about Windows. But, with the rise of cloud computing, Nadella recognized that the world had changed.

It became far less important to push people to use Windows than to ensure that Microsoft's enormous catalog of software, particularly Office, could run on any device. So, Microsoft built out its cloud to serve up Office 365 to run on any device; it made sure that its Windows Server software could run on other clouds; and it embraced competitive software, like Linux, on its own cloud.

That way, Microsoft makes money when customers run its software on a competitive cloud (they still have to buy the software) or when they run a competitor's software on their own cloud (they have to pay for Microsoft cloud usage).

Oracle is in a similar quandary but with one key difference: Amazon has become a major threat to Oracle.

Amazon isn't just trying to get Oracle's customers to bring Oracle software to Amazon Web Services (which they can already do), it's trying to get customers to ditch Oracle's database and use Amazon's database instead. Amazon even built a tool to make it easier to move from an Oracle database to an Amazon one. Microsoft also has its own database and has been a bitter competitor with Oracle for years.

So Ellison has been building an Oracle cloud that competes with Amazon (and Microsoft) insisting Oracle's cloud is a faster, better way to run the database. If Oracle's customers don't stay within Oracle's own sphere, Oracle could lose them altogether.

The clock is ticking

The problem is, Oracle's cloud is years behind Amazon's in terms of features. It will take Oracle billions of dollars and several years to catch-up, if it even can because Amazon is adding features at an ever increasing rate, hundreds or more per quarter. Microsoft is widely considered the No. 2 cloud.

Enterprise customers are choosing their cloud providers now, based on the features they want and need now.

Oracle may not have years to play catch up. And the person responsible for that catch-up is 22-year Oracle veteran Kurian, and his team. Kurian is the president who heads engineering and product development. About a quarter of the company reports up to him.

There have been signs that Oracle's cloud ambitions are not growing as well as the company wants, too, putting Kurian on the hot seat. Although, to be fair, Oracle is doing a good job in getting many of its customers to sign up for the certain parts of its cloud. They like the cloud versions of its HR, marketing and financial software (similar to how Microsoft moved people from MS Office to Office 365).

Should Ellison allow more of that software to run on competitors' clouds? And should it partner with its rivals (assuming such partnerships were an option) to run their software on its own cloud?

Probably yes. Other would-be Amazon competitors have either been crushed (Rackspace) or forced to eat crow and partner up (VMware). Once VMware got past the bitter taste, its partnership with Amazon has proved fruitful, filling a need with enterprise customers who want their datacenters to work better with the Amazon cloud (and making Amazon more of a beast, in the process).

But there's no question it's risky, and Ellison certainly wouldn't be crazy for being wary.

Oracle declined comment.

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