Please Welcome Charles Phillips, Our New CEO

Last week, Jim Schaper surprised the entire planet with the news that we had hired Charles Phillips to be our new CEO. In a global conference call with employees, Jim mentioned that he had been searching for his successor since June. Charles’ name surfaced in September when he announced he was leaving Oracle after more than seven years. 

Charles joined the database leader in May 2003. He was initially hired by Larry Ellison to serve in the “office of the CEO” as executive vice president for strategy, partnerships, and business development. Within a year, he was named as one of the company’s presidents.

Hiring someone of Charles’ stature is a coup for Infor. The industry reacted much the same way it did when Oracle executives announced that they had lured him away from Morgan Stanley, where he had been the top enterprise software analyst on Wall Street.  This was a recurring honor awarded him by Institutional Investor and other business finance magazines.

While I’m going to miss working for Jim, I’ve known Charles for at least a dozen years and am very excited about having him as our new leader. I think we first met at a PeopleSoft conference in the mid-to-late 1990s, but can’t say for sure. Over the years, we would meet at various vendor conferences or at Morgan Stanley’s offices in Manhattan. 

For a person who has so much influence on the tech industry, Charles is very soft-spoken when you meet with him. He listens more than he talks, and is renowned for his analytical skills. If you attended an event that he was at, it suddenly took on more importance as other attendees began whispering “wow, Charles Phillips is here.”

Charles helped spur Oracle’s acquisition spree—60 deals since 2003 …

Within two weeks of Charles joining Oracle, the company stunned the marketplace with its launch of a hostile bid for PeopleSoft. This came a week after PeopleSoft announced it was buying J.D. Edwards. The Oracle news came to me via a phone call at 3:45 AM. At the time, I was in Scottsdale for AMR Research’s annual supply chain conference. I was instructed to turn on CNBC for more information and to dial-in to the analyst call.

I spent most of that Friday doing press interviews. The vast majority of the questions had to do with whether Oracle was serious about buying the company. PeopleSoft CEO Craig Conway was on record as saying that it was a stunt designed to disrupt deals expected to close in the last few weeks of his company’s second quarter.

Knowing Charles’ reputation for integrity, I told reporters that I thought Oracle was very serious about its bid. Fortunately, that was confirmed by Charles when I reached him in his office that Saturday.  

PeopleSoft was the start of a major acquisition spree by Oracle. As I pointed out in a research note I wrote last year while at AMR Research, the company seems to delight in making at least one major $BB purchase every year. It closed PeopleSoft in January 2005;  Siebel in January 2006; Hyperion in April 2007; BEA in January 2008; and Sun in August 2009. Some of their other deals included Agile Software, Retek, and Phase Forward. These were designed to fill gaps in the product line or to build a stronger presence in important vertical markets.

All of the acquisitions were part of Charles’ strategy for competing with SAP. He rightly assessed that the high end of the market had already selected an ERP standard. Instead of trying to take SAP on directly, he opted for what he called a “wedge strategy.” He would surround the ERP system with best-of-breed software for HR, CRM, PLM, performance management, transportation management, demand planning, and the like. It was a brilliant move, as Oracle began infiltrating some of the largest SAP shops.

And revenues tripled during his tenure

Arguably his most important accomplishment, though, was driving top line performance.  As Jim noted in the press release, revenue grew nearly 300 percent during Charles’ tenure at Oracle. The company closed FY03 at $9.4B, and ended FY10 at $26.8B. 

What’s even more amazing is the value that has been created for shareholders. As I write this, his former company’s market cap is $144.63B, or $83B more than its German rival.  That’s the power of strong execution.

Jim Schaper did an outstanding job bringing Infor to the $2B revenue mark in eight years.  If you look at what Charles was able to accomplish at Oracle, you have to be excited about what we could achieve in the next eight years.

Delivering on our promise and own expectations will take more than a new CEO.  Charles would be the first to point out that his prior accomplishments came because he was part of a strong team and everyone had a role. It was a team effort that worked well.

Buckle up. It’s going to be a wild ride. All aboard.