LARRY ELLISON: We were the first company in the mid-1990s to move from client-server to Internet systems. I really thought this was primarily about changing technologies from the old one popularized by Microsoft to this new generation of technology where all you had on your desk was an Internet browser, and all of your out locations and data were on a server. But we realized the implications of the fact that we could contact all 42,000 employees, all our suppliers, and millions of customers for pennies through this global network. It was the beginning of the globalization of our business.

It used to be that we were organized feudally, and general managers in each country would set their own prices for the local market. So all of a sudden we were able to also set support policies and marketing strategies globally and make accounting, purchasing, and legal functions international, instead of regional. It was a reorganization from being lots of little national businesses to one set of products and processes for the whole world supported in a uniform way. The result was that we achieved huge efficiencies, saving a billion dollars the first year.

American Way: What were other concrete benefits?
Now managers only focus on one thing: how our technol-ogy can be applied to solve specific customer problems, or discover where our products need further development. Interdependence is fundamentally different from independence, so we've not only had an organizational change, but a huge cultural change. Those who loved being generalists thought this was awful, so we lost a few managers in the transition, but those who valued their knowledge as specialists thought this was great.

One of the biggest gains has been uniform support everywhere. The way you get quality is to define a set of processes and procedures and make sure they are implemented everywhere. The quality of support is now much higher.