Oracle Hires Donatelli From HP to Run Hardware Business

The ex-HP, ex-EMC veteran will join Oracle executive John Fowler in driving the infrastructure unit as it competes with the likes of IBM and HP.

Oracle Donatelli

Oracle is hiring ex-Hewlett-Packard executive David Donatelli to oversee the software giant's hardware portfolio, including its high-end converged infrastructure products.

The company announced the hiring June 18, saying Donatelli—who spent more than five years at HP after a 22-year career with storage technology vendor EMC—will be the executive vice president for converged infrastructure and will report to co-CEO Mark Hurd. Hurd was HP's CEO when he hired Donatelli away from EMC, a move that caused consternation between the two companies—including threats of legal action—before the vendors came to an agreement.

At one point, Donatelli was president of EMC's storage unit.

It's unlikely there will be a similar battle between HP and Oracle. Donatelli was hired in 2009 by HP to be executive vice president and general manager of its Enterprise Group. He was at one time considered a contender for the CEO position when Leo Apotheker left in 2011, but that job went to current CEO Meg Whitman, who in 2013 removed Donatelli from the Enterprise Group position and put him in charge of researching startups for investments and possible acquisitions.

At Oracle, he will be back in the familiar position of overseeing a hardware division. The company said Donatelli will be responsible for all of Oracle's infrastructure offerings, including engineered systems, servers, storage systems, networking gear and tape products. He also will oversee Oracle's hardware solutions designed for hybrid cloud environments.

Donatelli's hiring raised questions about the role of John Fowler, currently Oracle's executive vice president of systems. Donatelli's job description reads similar to that of Fowler—who, according to his biography on the Oracle Website, is "responsible for the delivery of all Sun systems products, including SPARC and x64-based servers, as well as networking and disk and tape storage products. Additionally, he is responsible for systems software, including Oracle Solaris."

However, an Oracle spokesperson said in an email to eWEEK that "with John's continued focus on engineering and with the addition of Dave, Oracle has the best leadership team to win in Systems."

Fowler came to Oracle in 2010 after the software vendor bought Sun Microsystems for $7.4 billion. When the deal was announced, there was speculation that Oracle would shed Sun's SPARC- and x86-based hardware business, focusing instead on software assets like Solaris. However, Oracle founder and then-CEO Larry Ellison said Oracle intended to keep the hardware business, and the company has since rolled out a portfolio of engineered systems—such as Exadata and Exalytics—that are powered by SPARC processors and are highly optimized to run Oracle's enterprise applications.

The hardware business has historically been a drag on Oracle's financial numbers though, in recent quarters, it has begun to gain momentum. During a conference call June 17 to talk about quarterly earnings, Oracle co-CEO Safra Catz said the hardware business—including hardware support—grew 5 percent year-over-year, with hardware system revenue coming in at $818 million. The engineered systems business saw double-digit bookings growth and "we continue to take share from IBM and HP."

Hurd said during the same call that while the performance of the server business declined, such segments as engineered systems and storage helped make up for any shortfall. According to a transcript from Seeking Alpha, he also noted that in the market segment for systems over $15,000 in the United States, Oracle is the top vendor, and that he expects to see the trend continue in other regions. In addition, Hurd said that Oracle enables hardware configurations in on-premises environments to be the same as those in the Oracle Cloud, enabling businesses to easily move workloads between the two.

"We are the only company in the industry that can do this," Hurd said. "And so I think this bodes very well for our hardware business, granted in a declining market. But I believe Oracle will gain market share in the declining market."

He said in a statement that Donatelli "joins Oracle at a pivotal time, when we are the only major hardware company in the industry experiencing growth."

Echoing the sentiment, Donatelli said in a statement that "in an industry where our hardware competitors are in chaos, Oracle stands alone with our strategy to engineer all layers of the software and hardware stack to work together seamlessly, whether on premise or in the Oracle Cloud. No one else in the industry can do this."