Why Hurd Will Be Key to Shaping the New Oracle

News Analysis: When it comes to handling the addition of Sun Microsystems, new Co-president Mark Hurd will need to focus on more than cutting costs and headcount.

Like a lot of business leaders, Mark Hurd has a history of being willing to play the heavy when joining a company.

Not just anybody can do the dirty work of cutting costs, programs and jobs. Hurd was well-known for doing that as CEO at Hewlett-Packard after he replaced Carly Fiorina in March 2005, and he had done similar duty at NCR previously.

Now Hurd, who was forced to resign from HP Aug. 6 following allegations of sexual harassment and a subsequent financial cover-up, is preparing to take a new position: co-president of Oracle under the direction of his longtime friend, Oracle CEO and co-founder Larry Ellison.

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At the start, at least, Hurd will be working alongside co-president Safra Catz, a formidable executive in her own right. This will be a new experience for Hurd, since he's never co-owned any high position in business; he's always been the No. 1 guy.

Analysts contacted by eWEEK agreed that Ellison is making a statement by immediately hiring Hurd after his Aug. 6 ouster at HP, the world's largest IT company. That statement would be that Oracle is completely serious about competing with both HP and IBM at the highest levels for enterprise IT systems business.
It also would mean that HP wasn't too smart in letting go a chief executive who brought the company back from wandering in the wilderness a mere five years after it was stumbling on its own roadmap following several huge bad decisions -- not the least of which was buying Compaq.

By the way, Oracle said Sept. 10 that Hurd will participate in a keynote session at Oracle's OpenWorld event later this month in San Francisco-despite a pending civil lawsuit brought by HP. Hurd signed a confidentiality agreement with HP as part of his $40 million severance package, and HP officials say they do not believe he can honor that agreement if he takes a position with Oracle.

Hurd will join a group of speakers in the first all-conference session Sept. 20 at 8 a.m. The session includes former Sun exec John Fowler, Oracle's executive vice president of systems; Edward Screven, Oracle's chief corporate architect; and Noriyuki Toyoki, corporate senior vice president of Fujitsu. It is unknown whether Hurd will be able to say anything noteworthy or if he will simply introduce Fowler and the others.

Hurd: Good for short haul, perhaps not for long term

Christine Crandell, senior vice president of marketing at Accept, has another point of view about Hurd's potential profound influence on a company with 105,000 employees. Crandell has a wealth of enterprise software experience, having served as an executive at various times at Oracle, virtualization software maker Egenera, Ariba and SAP America.

Crandell said it's questionable whether Hurd's executive history will serve Oracle well in the long run, since his strength is cost containment.

"When Mark was at HP, I can fully understand why he was the darling of Wall Street," Crandell told eWEEK. "He did what he had to do. He cut areas of the budget in order to give Wall Street what it expected for short-term financial results. He also chose to cut R&D a great deal. But that orientation is not going to be viable going forward."

All important executive decisions certainly must be grounded in fact, Crandell said.

"Looking at what Hurd had done at HP, clearly he made some hard decisions with the best data he could get," Crandell said. "But Oracle's situation is different from HP's.

"Are they going to do M&A as it's always been done, in the quest for accretive earnings, or are they actually going to look at how to mix these innovation pieces together so that they actually come out of this as a new Oracle that brings even more substantial value to the market?"

Oracle is in the process of digesting 27,000-person Sun Microsystems after having acquired it for $7.4 billion in January. Although Sun brought hardware, software and service products Oracle lacked, there are still areas of overlap, and headcount has been lowered substantially-with still more people expected to go.

Hurd, who reportedly will make $11 million per year to start, will likely be the guy to make the additional cuts.

"When it comes to Sun, Hurd's job will not be just about cutting costs; it'll be about, 'What is the new Oracle?'" Crandell said. "What are the pieces of this organization that we have to bring together, and what is the plan to achieve the objective? And that has a lot more importance than just where to cut costs and headcount."

Chris Preimesberger

Chris Preimesberger

Chris Preimesberger is Editor of Features & Analysis at eWEEK, responsible in large part for the publication's coverage areas. In his 12 years and more than 3,900 stories at eWEEK, he has...