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October 7, 1999

Head of Oracle Applications Quits to Join Start-Up

By CBR Staff Writer

By Siobhan Kennedy

Peter Dunning, Oracle Corp’s worldwide senior VP for applications has left the company to become CEO of a silicon valley start-up offering outsourced procurement applications, ComputerWire has learned. In a formal announcement, to be issued today or early next week, Oracle will name Frank Varasano, a former Booz-Allen & Hamilton consultant, as Dunning’s replacement. Varasano, an ex- colleague and friend of Oracle’s president Ray Lane, who also came from BAH, will join Oracle as executive VP, Oracle Products Industries.

Although a source close to Oracle downplayed the resignation, the loss of the head of its applications division at a time when the ERP market is experiencing a decline in growth, will certainly come as a blow to the software giant. Dunning had only been with the company for just over a year, having been poached by Oracle from SAP in July 1998, where he spent six years running the German software giant’s Fortune 500 and vertical-industry sales.

The source described the situation as a win:win for both sides. It’s a win for Peter because of his interests and it’s a win for Oracle because it’s getting a real industry heavyweight. Frank is definitely one of the premier catches in the industry. He has the same profile at Booz-Allen that Ray had before he joined Oracle.

While analysts were busy speculating about possible friction between Dunning and the company’s CEO Larry Ellison, Dunning denied the rumors. He told ComputerWire that one of the principal reasons for his departure was the fact that he lived in Atlanta and had to commute on a weekly basis to San Francisco. I wanted to see more of my family, he said. But he admitted the stronger motivation was his desire to do my own thing. He said: As much as I liked Oracle, I couldn’t complain about the income, they were certainly very generous, I wanted to go to a pure internet play and be CEO of my own thing.

Dunning, who was reportedly earning half a million a year at Oracle and was given a million dollars as a starting bonus, told ComputerWire that Lane and others had tried to make him stay. But it’s not all about money, he said. Dunning said he was hired by Oracle at a time when the company was reorganizing itself to remove the line between its core technology products (the database, tools and so on) and its applications. We had two companies. One centered around technology and one around applications, but Oracle realized the lines were beginning to blur and they had to do something about it.

Part of his remit was to help reorganize Oracle’s salespeople so that they operated as one coherent unit. There were so many conflicting sales models, he explained. We literally had situations where one customer would have about five different sales reps for one Oracle deal. It was totally redundant. With the applications division back on its feet and competing healthily with the leading vendor SAP, Dunning said he felt he’d achieved what he was taken on to do and was therefore keen to move on.

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The start-up, called, provides companies – primarily in the manufacturing industry – with an on-line, hosted internet procurement application. Although it has been in operation for over a year, Dunning will join the company as its first CEO.

Dunning denied there was any bad feeling between himself and Ellison. I can’t say I get on that badly with Larry. I didn’t have a deep relationship that was either positive or negative with him, he said, adding that he left the company on good terms. Nonetheless, he’s the third senior applications executive to leave in recent months. George Kadifa, VP of Oracle Industries, reporting to Dunning, left Oracle to become CEO of application service provider Corio, and Pauly Sumner, head of the telecoms vertical group, resigned to become CEO of a Silicon Valley start-up.

Bruce Richardson, an analyst with AMR Research in Boston said Dunning’s departure was typical of executive movements at Oracle. Either you stay for life or you’re there for the shortest possible time until you find something better, he said. There are huge internal warring factions, Larry pits one executive against the other and leaves Ray to pick up the pieces. He added: Lots of Oracle’s guys have bailed over the last six to 12 months to go to dotcoms, that’s no surprise.

Meantime, Varasano’s most recent position at Booz-Allen & Hamilton was as senior partner leading the engineering and manufacturing-intensive industries, but his career with the company spanned 26 years. During that time held a wide range of responsibilities, including leading the company’s largest office in New York. Although not a software man by trade, the source close to Oracle said the company had chosen Varasano because of his extensive experience in vertical markets. Specifically, he will be responsible for Oracle’s sales and consulting efforts in aerospace, automotive, consumer goods, chemical, energy, high- tech, process and retail industries worldwide. The remaining verticals, including government, banking, education and healthcare will stay under executive VP Jay Nassbaum.

But despite Varasano’s credentials, Richardson said he was puzzled by the appointment. You take one of the most visible positions at Oracle and you fill it with someone nobody’s ever heard of? he said. What’s really strange is that he doesn’t appear to have any experience of the software industry. Richardson said he thought Oracle would have been better placed employing someone high up in SAP, Baan or PeopleSoft. I think in the end they went for someone that a) they trusted and b) they knew was smart, he said. They probably thought they could teach him the rest.

Varasano is joining Oracle as an executive VP, which makes him part of an eight-person committee which also includes Ellison, Ray Lane, Jeff Henley, Gary Bloom, Pier Carlo Falotti, Sandy Sanderson and Jay Nussbaum. By contrast, Dunning was only a senior VP. Varasano is due to announce his resignation to his key clients during a meeting first thing Monday morning.

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