IT Rivals Make Executive Recruiting a Spectator Sport

Opinion: IT industry rivals like nothing better than to lure away each other's top executives. But lately it looks like they are trying to roll up the score.

Bitter IT industry rivals never get a better chance to thumb their noses at each other than when they manage to hire away highly sought-after senior executives.

But lately it seems that the worlds top software companies have been more aggressive than ever about luring top management talent away from each other.

While internecine recruiting raids go on all the time in the IT industry, SAP this month went as far as to publicly acknowledge that it had managed to hire away 200 employees—from senior executives to sales professionals—from Oracle, Siebel Systems and PeopleSoft.

On Thursday, news leaked out of Oracle that it had hired marketing specialist Tod Nielsen from BEA Systems, where he had been senior vice president and chief marketing officer.

Now the latest news is that Oracle has hired Gregory Maffei, a former Microsoft chief financial officer, as president and CFO. Oracle recruited Maffei from 360Networks, a telecommunications company based in Seattle.

Maffei will join Safra Catz and Charles Phillips as co-presidents reporting to CEO Larry Ellison. Catz will relinquish the CFO duties that she assumed when former CFO Harry You resigned in March after only eight months on the job to take over as CEO of IT consulting company BearingPoint.

/zimages/7/28571.gifClick here to read more about SAPs disclosure that it has recruited more than 200 new employees from Oracle, Siebel and PeopleSoft.

Maffei also will be responsible for Oracles legal department, human resources, manufacturing and distribution, and global real estate.

Gifted executives dont grow on trees, and Maffei arrives at Oracle with a particularly impressive resume. While he was Microsoft CFO from July 1997 to January 2000, he managed the companys $35 billion cash and strategic investment portfolio.

Before leaving Microsoft in 2002, Maffei was chairman of Expedia, the Internet travel services company that Microsoft started and later took public in 1999.

There was a time when senior executives at Microsoft rarely left the company. Most of them had risen through the ranks and had benefited from the huge wealth that accrued from owning Microsofts stratospheric stock through the 80s and 90s. Some of them retired as millionaires, and some went on to found their own IT technology startups.

But with Microsoft stock trading at more mundane levels these days, there is less to keep gifted managers close to their Redmond, Wash., roots. They are more likely than ever to move on to other companies where they will be found occupying the top ranks of IT companies across the country.

In this respect, they will start to look more and more like the host of IBM executives who have left the fold of Big Blue seeking to go to top positions at smaller, but no less dynamic, companies.

/zimages/7/28571.gifRead more here about Tod Nielsens move to Oracle.

Over the past year, BEA Systems has experienced a number of senior management departures, as the company seeks to diversify from producing products that serve mainly software developers to business process and logic tools that appeal to application architects and business analysts.

Besides Nielson, Adam Bosworth, former vice president and senior architect at BEA, left the company in July 2004 to join Google.

At about the same time, Rick Jackson, a marketing vice president who reported to Nielson, resigned from BEA to join Borland Software, a company that competes in the same application-development product market as BEA.

Companies such as BEA with a product strategy that is in transition are particularly vulnerable to competitive executive-recruitment campaigns. This is even more apparent in the current economic climate, in which the IT industry has recovered from the recession that stunted growth and employment from 2001 through 2003.

When SAP brags that it has recruited scores of new employees from its rivals, it is just part of the game of one-upmanship that takes place as competitors jostle for advantage. Since the PeopleSoft buyout, Oracle and SAP have been doing their best to get under each others skin.

Oracle managed to outbid SAP for Retek, a retail software provider. Meanwhile, SAP is actively wooing Oracle, PeopleSoft and J.D. Edwards ERP (enterprise resource planning) application customers, while Oracle circles the wagons to discourage any SAP incursions.

It just another example of how business competition in the enterprise software industry occasionally becomes a spectator sport.

John Pallatto is a veteran journalist in the field of enterprise software and Internet technology. He can be reached at

/zimages/7/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...