Former Hewlett-Packard CEO Mark Hurd’s severance vacation and search of the help-wanted listings proved to be short. Oracle announced that Hurd will be joining the company’s board of directors and will assume the position of president. Current co-president Safra Catz is staying, but Charles Phillips has departed. Phillips deserves credit for improving Oracle’s customer relationships during his era; it’s easy to forget now how raw those relationships were at the time he took the helm. However, like the end of Hurd’s reign at HP, Phillips’ more extended finale came with embarrassing personal distractions.
HP is not accepting Hurd’s new position peaceably. The company has filed a lawsuit, noting that by joining Oracle, Hurd is violating a confidentiality agreement and “[putting] HP’s trade secrets and confidential information in peril.” Given that Oracle is increasingly more of a competitor than a partner to HP, it’s easy to see HP’s difficulty with this turn of events. I don’t know whether HP’s lawsuit will succeed in stopping Hurd’s appointment, but a quick read of experts quoted in the business press seems to suggest that it will not.
The arrival of Mark Hurd at Oracle could be a huge development that will send shock waves across the industry. As evidenced by recent trading, investors seem bullish about Oracle’s prospects with Hurd’s arrival. Here as six points that I see as significant with regard to his hiring:
- Hurd will bring leadership to Oracle’s hardware, systems and data center push. This is new: Oracle will now have a top executive with experience in the hardware and systems business. Oracle’s steady core has always been database software, with services and other types of software and services subject to shifts in strategy and restructuring. Will Hurd, after looking at the business prospects for the Sun offerings, try to change Oracle’s balance to go strong after HP and IBM? Or will Hurd conclude that Oracle needs to mend its relations?
- Hurd is Oracle’s first strong #2 since Ray Lane. Oracle experienced significant growth during Lane’s years as president and COO with Oracle, but his relationship with Oracle CEO Larry Ellison soured, and he was gone after eight years. Hurd is no shrinking violet, especially after having been the CEO of two different companies. What will happen when Hurd and Ellison disagree? And will they agree on the possible acquisitions that everyone expects will happen?
- Hurd will be tempted to “cut the fat” inside Oracle. No doubt, part of Wall Street’s positive reaction to Hurd’s appointment reflects the view that he could make Oracle even more profitable by taking an axe to internal costs, as he did at HP, and hold managers more accountable. Oracle is run more efficiently than HP was when Hurd took over, but it is an established company with over 100,000 employees. Surely an outsider with the practiced eye of Hurd will find areas to trim. How will this affect Oracle’s internal psyche?
- Hurd could invigorate Oracle in the channel. Hurd has a reputation for valuing channel partner relationships – an area where Oracle has had trouble. Hurd could make improvement here a focus, and help Oracle counter stronger direction from IBM and Microsoft.
- Hurd’s hiring will be a catalyst for change in the industry. If Hurd does make Oracle a more serious player in the server, storage and data center business, competitors will have to react. If its stock price continues to fall, would a Cisco Systems, EMC or even Microsoft make a play for HP? Wild thoughts, but then the IT industry has not really had to deal with Oracle as the sort of broad-based player it could now become.
- Hurd could give more oomph to Oracle’s BI, analytics and data warehousing. With the 11g releases, Oracle is in the early stages of an important product cycle for business intelligence, analytics and data warehousing. Hurd was clearly a believer in the power of BI at HP; I would expect him to give Oracle’s offerings an even higher profile.
Larry Ellison, whether fired up by a friends’ misfortune or the opportunity to bruise a competitor, has succeeded in planting a couple of banderillas in the HP bull, angering and distracting it. But now, by bringing Hurd on board, he could be about to change Oracle itself.