Sparks Already Flying as Oracle Brings Hurd Into Fold

Mark Hurd, the former CEO of HP who resigned in disgrace last month, has joined Oracle as co-president. At the same time, Charles Phillips, co-president and a member of Oracle’s board of directors, has resigned. Hurd will serve alongside Co-President Safra Catz.

Wall Street investors are excited about the move: Oracle’s shares wereup by 5 percent on Monday morning following the news, which was revealed onSunday.

Larry Ellison, CEO of Oracle, is clearly enthusiastic as well. He has calledHurd’s performance at HP “brilliant,” while castigating its board forforcing Hurd out over violation of standards of business conduct.

There are plenty of others, though, who may be less-than-thrilled about the move, fearing that Hurd will engage in some of the same behaviors he was known for in his old job. Presumably this list could include Oracle employees, Hurd’s former colleagues at HP, and possibly Catz herself.

If Hurd engages in a repeat performace, Oracle customers — and possibly even Ellison — could conceivably rue the day he joined the firm.

Oracle told the E-Commerce Times it would not comment for this articlebeyond its statement announcing Hurd’s appointment.

In Hurd’s Favor

Given all the angst and ire that Hurd’s move to Oracle will likely provoke, one has to wonder what on earth Ellison was thinking.

To be fair, Hurd is an accomplished chief executive who has gottenresults. The 5 percent bump in Oracle’s stock, said to be worth $6 billion,was no reflex reaction — Wall Street simply loves Hurd for the numbers heproduces.

“When Hurd led HP, the stock doubled in value and its revenues surpassed those of IBM’s,” Charles King, principal with Pund-IT told the E-Commerce Times.

Also, Oracle is in need of Hurd’s particular expertise right now, Kingsaid, as the company shifts from a software-centric model to includehardware.

“Oracle is in the process of becoming a full-blown systemsvendor, and key to that has been the Sun acquisition. That acquisition,however, has not gone swimmingly well. The blending of the twocompanies is progressing, but we haven’t seen a great deal of visionarystrategizing or leadership,” King explained.

The lackluster progress may also account for Phillips’ departure: He was largely in charge of the Sun integration, King said.

Another reason Ellison likely wants Hurd on board: Oracle has yet to fully build out a services platform, which every systems vendor needs.

“Hurd engineered one of the largest IT services acquisitions with EDS,”King pointed out.

Then there is Hurd’s intimate knowledge of HP. That will boostconsiderably Oracle’s advantage over the firm, Rob Enderle of theEnderle Group told the E-Commerce Times.

“Hurd knows where the bodies are buried, knows which accounts are introuble, and which ones they are gunning for now,” he noted.

“For a while, hewill have an inordinate amount of insider information on how tocompete with HP and will be able to do a lot of damage to itsinstalled base,” Enderle said.

HP did not reply to the E-Commerce Times’ request for comment by press time.

Points Against Hurd

Of course, HP might kick up a legal fuss, which could hinder Hurd’s initial days at Oracle, depending on his severance contract or other non-compete contracts he may have signed, Enderle speculated.

In fact, HP has filed a complaint against Hurd, the company announced Tuesday in its official blog.

That’s one drawback to Hurd’s appointment at Oracle.

However, “California law is generally not supportive of non-competes,” King pointed out.

It’s likely that the most HP could do would be to attach Hurd’s multimilliondollar severance package, Enderle said. “In that case, Oracle wouldjust reimburse Hurd.”

In spite of the incipient legal tangle, the move hasn’t drawn much disfavor in analyst circles.

Boardroom Infighting

The biggest drawback to bringing Hurd to Oracle may be his personality — the particular traits that characterized his tenure at HP and ultimately led to his dismissal.

Hurd had a reputation of running roughshod over employees, Enderle said. Internal surveys showed he was widely disliked, with a disproportionate number stating they would take another job if they could.

It didn’t help that Hurd slashed to the bone areas important to HP’s customers, such as research and development.

Hurd’s fingerprints are also on former chairwoman Patty Dunn’s ouster fromthe board, said Enderle.

“Basically, Hurd threw Dunn under a bus,” Enderle said, referring to the divisive internal investigation into press leaks and the related “pretexting” scandal.

Then there is the reason for Hurd’s departure last month: the sexual harassment complaint filed against him by Jodie Fisher.

The bottom line is that Hurd has a problem working with — and certainly for — women, Enderle said.

Mark, Meet Safra

Ironically, the person best positioned to keep Hurd’s worst impulsesat bay is a woman, Enderle pointed out.

“Catz will be the one to keepHurd from mucking around with employee compensation and headcount,” he predicted.

For that reason alone, Hurd is bound to be gunning for Catz, Enderlespeculated.

“The difference between Catz and Dunn, though, is that Catz isfully capable of chewing Hurd up and spitting him out,” he said. “She is as toughas nails, and she certainly will be on the lookout for backstabbing.”

Catz is also standing in Hurd’s way for the ultimate role at Oracle: Ellison’s position. Who knows? Hurd might evenmake a play for that job “as it is certainly in his DNA,” Enderle speculated.

However, he won’t get far if he does try it, Enderle said. “We would find bits andpieces of Hurd maybe, nothing more. The guy [Ellison] owns a fighterjet, for God’s sake.”

One factor that is likely to seriously mitigate any “Hurd effect” at Oracle is the fact that he will not be the company’s CEO — or execute the decision-makingpowers that attend that position. Whether his indisputable strengths as a corporate leader are enough to propel him to success in a role much more limited than he’s been accustomed to remains to be seen.

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