Oracle Gets Hurd, HP Gets Mad: What Does it Mean?

Rob Enderle

I'm fascinated by the sequence of events that put HP's now ex-award winning CEO in as a subservient member of Oracle's executive team, possibly positioned as Larry Ellison's successor. A lot has happened since 2005 when Mark Hurd was named to replace Carly Fiorina as CEO at Hewlett-Packard. Highlights include letting Patty Dunn take the fall for the identity theft a team that reported to him did in order to take control of HP's board. (Dunn was a non-executive chairman, which means she had no authority.)


Hurd swapped employee compensation, retention and benefits for his own ever-greater ones. This was followed by Hurd's employment of a "hostess," who later filed a sexual harassment complaint upon termination, and his own termination for attempting to cover parts of this up. Next, his buddy Larry Ellison hired him at Oracle and the latest, as of this writing, is that HP is suing both Oracle and Hurd, claiming his employment at Oracle puts HP trade secrets and intellectual property at risk. (Hurd had a two-year confidentiality pact.)


So what does this mean?


Hurd Should Likely Stop Listening to Ellison


Have you ever had a friend who gave bad advice while seeming to live a charmed life? Ellison appears to be that kind of friend to Hurd. The situation at HP seems to dovetail with what Oracle's similar events are known for: attractive women and good booze. There's one part, though, that's very important to the success of these things: Surprises stay confidential and mirror the first two rules from "Fight Club": You don't talk about it.


Unfortunately, Hurd's hostess did spill the beans when she hired a high-profile attorney, and Ellison likely gave Hurd his second piece of bad advice: to settle quickly and lock the information up. This got Hurd fired, and somewhere in this process, Ellison found out confidential information about the board's ouster vote and put that in a letter to The New York Times.


So now Hurd is hired by Ellison and immediately sued by HP for transgressions, some of which seem rather obvious. Ellison is starting to really look like a guy that Hurd's parents would suggest he stay away from. It would make a great reality TV show, and I even came up with the name "The Crazy Old Rich Guys of Silicon Valley."

Oracle/Hurd Fit


However, some of this scenario makes a certain amount of sense. The Sun acquisition went horribly. Oracle was largely left with a shell of a company and no good executive core to build upon. They don't really know hardware at the top executive level, and Hurd knows it well enough to run a multinational hardware company. But Hurd was broadly hated at NCR and HP for aggressively reducing employee benefits and income while dramatically increasing his own. That allowed HP to go from being overweight with expenses to a Wall Street darling, but it also created massive employee acquisition and retention issues. This especially has been true in its acquisition of Palm. If Hurd is to rebuild Sun into something viable, it needs good people to work there and to want to stay to complete projects.


If Hurd is required to build employee loyalty and retention while he is building Sun, he likely will work to perform under such a program. But with his history, it will be difficult to convince new employees that Hurd is someone to trust rather than someone who treats employees like cheap commodities.


Hurd has a history of moving women in his way out of the company. His last high-profile victim was Dunn, whom he tricked into taking the fall for HP's identity-theft problems, according to the book "The Big Lie." Safra Catz is now in his way. Having her removed won't be as easy because Catz is more of a shark.


Where Hurd will be most valuable is knowing which HP accounts and employees are most vulnerable, where HP is spending its research money and why, and which Sun accounts HP is having the greatest success in and how to shore them up.


Wrapping Up: Is Oracle in Trouble at the Top?


Everything else aside, at the core of this is integrity, whether it is to one's family, company, employees or customers. If you can't trust a company or an executive, it might be wise to keep some distance until the dust settles and you can. The back chatter about Oracle events makes me wonder if we are about to have some kind of big disclosure about racy parties and the executives that frequent them. It might be wise to start avoiding questionable parties from any vendor. Once something like this breaks, it likely won't stay contained within a single company.


There is a lot going on at Oracle at the moment, including concern that Ellison may be acting erratically. The events surrounding him recently don't appear to be well thought through; that is unusual for Oracle and Ellison. From the Sun acquisition and handling of the EU to the NYT letter and this recent hiring, not to mention the fraud charges, you have to wonder if what we are seeing is just strong risk taking or something else. If you are tied to Oracle, you might want to make your own determination and protect yourself accordingly.


By the way, the current rumor is that Charles Phillips was on the short list to be hired as HP's CEO, and that this was a preemptive strike. Hurd replaced Phillips in the Oracle executive team. It will be an interesting decade.

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