Former HP CEO Hurd Will Help Oracle Take On IBM, Analysts Say

 
 
By Jeffrey Burt  |  Posted 2010-09-07 Email Print this article Print
 
 
 
 
 
 
 

Ex-Hewlett-Packard CEO Mark Hurd brings his experience running a large IT company and working with hardware, software and services to Oracle, which is looking to take on IBM and HP.

Oracle CEO Larry Ellison has been talking about challenging IBM as a full-service IT supplier since first broaching the idea of buying Sun Microsystems. Ellison has taken another step in that direction with the hiring of ex-HP President and CEO Mark Hurd,  according to industry analysts.

Hurd comes to Oracle with a strong background in managing large companies that offer both hardware and software, have strong services divisions, have bought and integrated other companies, and can make their IT offerings work together in an integrated fashion.

All those attributes can help Oracle work toward its stated goal of reaching $100 million in revenues and challenging IBM. Hurd's move to Oracle is good for both the man and the company, analysts commented.

All that said, it won't be an easy feat to take on IBM.

"As Oracle continues to integrate its acquired Sun assets with its database, middleware and applications platforms, the addition of an execution-focused executive like [Hurd] is a huge boost to the company," Stuart Williams, an analyst with Technology Business Research, said in a report Sept. 7.

"Oracle is plotting a strategy that takes it into direct competition with traditional systems heavyweight IBM. IBM has huge advantages-with long-time enterprise customers, a services business, a strong IP-backed hardware business and a $20 billion software business of its own. The ability to tie software with hardware to specific workloads such as data warehouse or online transaction processing meets rising customer requirements for easy-to-use devices that add capabilities without adding the cost of build-it-yourself solutions."

Hurd resigned under pressure from Hewlett-Packard Aug. 6, after a former HP contractor claimed that he sexually harassed her. An internal investigation found no basis for the sexual harassment complaint, but the HP board of directors said Hurd falsified some expense reports in an effort to conceal his personal relationship with the contractor, Jodie Fisher. The board concluded that Hurd had violated HP business policies.

Within days, Ellison, a close friend of Hurd, sharply criticized the HP board in an e-mail to the New York Times, claiming that the company was making a mistake and pointing out that no basis was found for the initial complaint against Hurd.

Oracle announced Hurd's hiring as Oracle co-president Sept. 6, replacing Charles Phillips, whose reputation also took a blow this year when he admitted to an eight-year affair. Hurd and Safra Catz will be co-presidents, both reporting to Ellison.

A day after the hiring, HP filed suit against Hurd in a California state court, saying Hurd could not serve as president of Oracle without violating a confidentiality agreement that was part of his almost $40 million severance package.

That said, Hurd's hiring should be a significant competitive win for Oracle, according to analysts.

In Hurd, "You have an experienced executive who did run a company that size," said Gartner analyst Kenneth Chin. "Hurd brings a lot of good qualifications for running a company the size of HP or IBM."

In fiscal-year 2009, HP generated more than $114 billion in revenue. For its fiscal 2009, Oracle saw almost $27 billion. Company officials are looking to see Oracle grow into a $100 billion company.

In addition, the ex-HP CEO comes with a strong background in hardware and services, which Oracle will need if it wants to compete with HP and IBM, Chin said.



 
 
 
 
 
 
 
 
 
 
 

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