Oracle Names New Co-CEOs As It Bets Business On Cloud

Oracle Corp. on Monday promoted Clay Magouyrk and Mike Sicilia to become co-chief executive officers, signaling the company’s focus on its rapidly expanding cloud computing business.

The 39-year-old Magouyrk was one of Oracle Cloud Infrastructure’s first employees after a stint at Amazon.com Inc. and rapidly climbed the ranks at Oracle. Sicilia, 54, was most recently president of Oracle Industries, where his experience included oversight of software applications for specific business sectors and the acquisition of health records business Cerner Corp.

The elevations underscore how Oracle is betting its future on cloud infrastructure, the business of building data centers that companies like OpenAI and Meta Platforms Inc. then use to deliver artificial-intelligence services to their customers. It has booked massive deals with such clients that will make the cloud division its largest unit by revenue in the coming years. It’s spending heavily to fulfill these commitments, and has seen its annual cash flow go negative for the first time since 1990.

Safra Catz, 63, who has led the company since 2014, will step back to become executive vice chair of the board. She expressed skepticism toward the cloud infrastructure business in OCI’s early days due to high costs of operating data centers and lower margins, Bloomberg has reported. 

While tech companies rarely split responsibilities at the CEO level, Oracle has experience with this structure. Catz was promoted to co-CEO in 2014, alongside Mark Hurd. After Hurd died in 2019, chairman Larry Ellison said he didn’t plan to name a second CEO to work with Catz.

Though Magouyrk and Sicilia’s titles are the same, Magouyrk will be paid more. He will receive stock package worth $250 million, while Sicilia will receive one worth $100 million, the company said in a regulatory filing. 

“Clay’s years of experience leading Oracle’s large, fast-growing Cloud Infrastructure business has demonstrated his readiness for a CEO role.” Ellison said in a statement. “They are both proven leaders, and I am looking forward to spending the coming years working side-by-side with them.”   

Oracle reaffirmed the financial guidance it provided earlier this month. It also said that Catz will no longer serve as the company’s principal financial officer. That will now be Douglas Kehring. Oracle’s stock was little changed after markets opened in New York. It has been up more than 85% this year, far outpacing the S&P 500 Index.

Separately Monday, the White House announced that Oracle will be key to a deal taking shape to sell the popular Chinese-owned app to a consortium of American investors. TikTok was a crucial early customer of Oracle’s cloud.

“We believe that investors are already familiar with both Mr. Magouryk and Mr. Sicilia and that their promotions solidify the importance of the Cloud and Industry businesses as the growth levers for the company,” wrote Kirk Materne, an analyst at Evercore ISI.