Wednesday, September 08, 2010

HP vs Oracle Fighting Over $7 billion Man Mark Hurd: A Silicon Valley Soap Opera

After first reported by The Akbas Post on early Sunday, Oracle yesterday announced that Mark V. Hurd has joined Oracle as President and has been named to Oracle’s Board of Directors. Mr. Hurd will report to Larry Ellison. He replaces Chuck Phillips who left the company. The news cheered up Wall Street so much that Oracle added $7 billion to its market cap while Ellison offered Hurd $950,000 salary with bonuses that could go up to $10 million. That's what I would call magnificent double dipping since Hurd got his severance package in the $20+ millions just a month ago. Ellison on the other hand got himself another great deal.

Oracle's move to bring in Hurd is a coup for Oracle. Despite his ethical challenges at HP, he was the most successful CEO HP ever had. Replacing him would prove to be a very difficult task for the HP board. Hurd will do a much more aggressive job at Oracle aiming at his old employer and of course IBM. We would expect more hardware acquisitions in the enterprise storage and networking while also expanding into services which is another missing domain. Similar to his move of buying EDS at HP, we could see a similar large services deal. Accenture for example would not only give them a global services footprint but also proven Information Technology and Business Process Outsourcing clients in the top Global 500 accounts.

Yesterday following Oracle's announcement of hiring Hurd, HP sued to block his appointment based on the grounds that Hurd signed a confidentiality agreement and he could not perform his new job without violating it. Having worked in the high tech industry in California, enforcing non competes or confidentiality agreements (for a so-called crime that is yet to be committed) to block employment in the state of California is practically impossible. We have seen many of these for executives changing jobs among Dell, EMC, IBM and HP and nothing changed the outcome. We tend to think Mark Hurd saga at HP turned into a soap opera in the Silicon Valley.

“Mark did a brilliant job at HP and I expect he’ll do even better at Oracle,” said Oracle CEO Larry Ellison. “There is no executive in the IT world with more relevant experience than Mark. Oracle’s future is engineering complete and integrated hardware and software systems for the enterprise. Mark pioneered the integration of hardware with software when Teradata was a part of NCR.”

“Mark is an outstanding executive and a proven winner,” said Oracle President Safra Catz. “I look forward to working with him for years to come. As Oracle continues to grow we need people experienced in operating a 100 billion business.”

“I believe Oracle’s strategy of combining software with hardware will enable Oracle to beat IBM in both enterprise servers and storage,” said Mark Hurd. “Exadata is just the beginning. We have some exciting new systems we are going to announce later this month at Oracle OpenWorld. I’m excited to be a part of the most innovative technology team in the IT industry.”

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