Oracle dumps NCI, Navio CEOs for market-savvy chief exec

Electronic News, Feb 23, 1998 by Chad Fasca

Hot Seat Leaves Roux in Top Job; Baker, Yen Out

Redwood Shores, Calif.--For several years, Oracle's Larry Ellison evangelized to the consumer and corporate markets about the $500 "network computer" (NC)--a stripped-down, networks-based appliance that would unseat the Wintel platform. To his credit, this proselytizing can be closely linked with the development of the sub-$1,000 PC boom. But, the prophet of cheaper, streamlined network appliances has not profited by them. While PC prices plunged, the technology tapped to topple Microsoft, the NC, the apple of Mr. Ellison's eye, has scored mixed results.

Consequently, the men chiefly responsible for building the NC-based technology are gone. Network Computer, Inc., an Oracle subsidiary formed to make software for open standards-based NCs and other Internet appliances., revealed that CEO Jerry Baker resigned from the company last week. The founder of NCI and 14-year Oracle veteran, Mr. Baker's departure was a "mutual decision" reached with NCI's board, according to NCI's spokesperson. He was not alone. Wei Yen, president of the NCI and former CEO of Navio Communications, also resigned. However, Mr. Yen did accept a consultancy to NCI, according to the spokesperson. Neither men could be reached for comment. In their stead, Oracle executive VP David Roux assumed the reins of NCI as CEO.

Taking NCI To Next Stage

Oracle and NCI are literally banking on Mr. Roux and his experience. Oracle placed NCI under Mr. Roux's stewardship because its technology has reached fruition and the company needs a leader experienced with product marketing and finance, according to an NCI spokesperson.

"My mission is to build upon NCI's strong technological foundation and deliver products that will continue the growth and long term success of NCI," said Mr. Roux in a statement.

A graduate of Harvard College with a master's degree in economics from King's College, Cambridge University, and a master's degree in business administration from the Harvard Business School, Mr. Roux has been a rising star at Oracle. As executive VP, he reports directly to Mr. Ellison. Prior to Oracle, Mr. Roux held positions at Central Point Software and Lotus Development Corp.

The appointment of Mr. Roux is an indirect acknowledgement by Oracle that NCI has not taken off to Mr. Ellison's satsifaction. Of course, Oracle has a lot riding on NCI's success. Touted to crack Microsoft's hegemonic grip on the computer software industry, network computers, which lack hard drives and are connected through the networks, would feed Oracle's bread and butter database business. The results have been uneven though.

While Oracle's network computer push indirectly contributed to a focus on cheaper PCs leading to the sub-$1,000 PC market, the set-top box scramble and WebTV, it has not led to Oracle dominance or NCI glory. In the six to eight months that NCI has had its network computer product on the market, the company has been slow to notch up volume sales or build a significant amount of systems. A company spokesperson said that RCA Electronics has begun to sell consumer and corporate network computers. NEC is also said to be selling the machines. But consumer models that RCA sold have numbered only 50,000. On the corporate side, the spokesperson said he could not give any exact figures but that sales run in "the high tens of thousands, close to a hundred thousand" units.

But, a boom is expected in the NC market, according to figures previously released from Zona Research. Shipments of consumer network computer devices were projected to explode from 2 million in 1997 to more than 70 million by 2000. Whereas network computers, such as Sun's JavaStation and IBM's Network Station, are projected to grow from approximately 1.7 million in 1997 to more than 6.7 million by then.

Oracle's move to strengthen the marketing aspect of its network computer software business could be coming at just the right time.

Mr. Roux has already engineered several successes for Oracle's fledgling NC business. The company has aligned itself with Microsoft's chief rivals, IBM Corp., Sun Microsystems Inc. and Netscape Communications Corp. Oracle's NC got a round of support from hardware, software and networking companies in May 1996 (EN, May 20, 1996) as IBM, Sun, Apple and Netscape endorsed the Network Computer Reference Profile 1 standard to make sure that different NC models work with one another on the Internet. Mr. Roux was said to have taken the lead on this standard.

In his position as Oracle executive VP, Mr. Roux also was identified as the principal force behind the Navio acquisition. Oracle purchased Navio Communications, Inc. from Netscape Communications Corp last spring and subsequently merged the company with its NCI (EN, May 26, 1997). The two companies combined engineering, marketing, technology, brands and products under the NCI banner. The deal is expected to allow both Oracle and Netscape to supply an end-to-end offering for consumers and corporations. Navio was formed in 1996 to extend Netscape's Navigator technology for non-PC devices.