One of the things I think a lot of people don't get about the recent HP announcement is that Ray Lane is the executive chairman of HP and that is a title typically reserved for the CEO when he or she is also chairman. In fact, when I was briefed by Patty Dunn's husband (Patty was the non-executive chairman of HP who fired Carly Fiorina from HP), he argued that you had to be a CEO to get that title. This suggests that Ray Lane, not Meg Whitman, is the top HP decision maker and that we now effectively have an office of the CEO with at least Meg and Ray as members.
This is why HP announced no strategy change when it announced the replacement of Leo Apotheker by Meg Whitman; the guy setting the actual strategy hadn't left. This creates kind of an interesting match-up between Ray Lane, who really would like to pay Larry Ellison back for firing him, and Meg Whitman, who became uniquely battle-hardened during the California Governor's race. In the background is the speculation that Oracle might buy HP, which is something I touched on last year.
Let's talk about Lane/Whitman against Ellison/Catz today.
Ray Lane vs. Larry Ellison
I watched with interest the years that Ray Lane managed Oracle and saw the reaction of IT managers when Larry took control back from him. These IT managers learned to almost love Lane and were scared half to death by Larry. I can recall one write-in comment sent at the time that said something to the effect of "we aren't sure who Larry's enemy is but we're afraid it's us."
Larry fights hard and has what appears to be a deep desire to displace IBM at the top of the IT vendor stack. It appears that he either wants to kill or cripple and buy HP in order to get there, which is why he has broken the HP/Oracle partnership and declared war on that company as an interim step. He is known as a take-no-prisoners chief executive, but he is also known for acting first and thinking later - the Sun acquisition appears to be such a move. It isn't going well.
Ray Lane is more pragmatic; he is closer in demeanor to IBM's Sam Palmisano and has a high regard for customer satisfaction reminiscent of EMC's Joe Tucci. As mentioned above, he is well regarded by customers who appear to prefer him over Ellison largely because he seems more interested in their care than their money. He was fired from Oracle not because he was underperforming, Oracle was doing fine, but because Larry seemed to want his company back.
In an even choice between the executives, customers tend to choose Lane over Ellison, but Oracle's products are harder to displace than HP's, which offsets this advantage. Oracle has the stronger strategic position, but it has been weakened by the acquisition of Sun, which created deeper concerns about vendor lock-in and the servers are losing share (outside of Exadata). On the other hand, Oracle employees appear comparatively upbeat, while HP's just showed up on a short list of firms with employees who are losing hope.
Finally, Ellison certainly knows the company he built and has had a stable management team for months. Lane is new to HP and he has both been out of a CEO role for some time and HP is vastly different than Oracle was. The strengths and weaknesses are all largely offsetting, which takes us down to the next level.
Safra Catz vs. Meg Whitman
Catz, often referred to as the "Dragon Lady of Oracle" by some of the folks I know who know her, is one of the most competent women executives in the world. What is fascinating is that given Larry Ellison's history with women, it should be impossible for a woman to be successful as his number two, but Catz has pulled off the near-impossible. She balances her subordination to Larry with a brilliant business so well that she appears almost transparent to the outside world, yet is generally thought to be the reason Oracle is doing so well. In short, she is clearly more competent than Larry is, but he never sees her as a threat and she works hard to never become one. It is an amazing relationship to watch, though I am thankful I do so at some distance.
Whitman's background isn't closely aligned with HP. What is kind of fascinating is that while Catz could likely easily run Oracle should Larry leave, I doubt she'll ever be allowed to do that. Whitman, on the other hand, might be allowed to run HP, but hasn't yet acquired the skills to do so alone. If it weren't for Larry, they both would likely have better opportunities in the other company - Catz could advance and Whitman would have a vastly easier company to learn.
However, while Catz proved herself more competent as the voice of HP during the SAP situation, she will rarely be given this opportunity. And Whitman, who actually does very well in front of audiences, will likely be the new face of HP. While Whitman is overmatched by Catz, Ellison weakens Catz, and Lane will work to elevate Whitman, suggesting the Whitman/Lane team could eventually be stronger. However, to get there, they will have to learn to work together, which is something that Catz and Ellison already do well.
Wrapping Up: Oracle Set - HP Fluid
Oracle is basically a known, while HP is an unknown as Ray Lane and Meg Whitman both come up-to-speed running that company. As others have found out, HP is not a trivial company to run and it represents far more complexity than Oracle. On the other hand, it has far more breadth and while it is light on software, it easily outstrips Oracle in every other IT area. In fact, if we were talking war metaphors, Oracle would be closest to Japan and HP to the U.S. HP can out-resource Oracle, but Oracle can out-focus HP. For HP to win it must find a way to focus its resources because, if it can't, Oracle should be able to carve it up. It might be wise for Oracle to avoid anything like a Pearl Harbor and given it was a move like that that got Lane on board, it may already be too late.
In the end, IBM may be the biggest beneficiary, because, historically, HP and Oracle aligned against it and now they are fighting each other.