Larry Ellison is cranking up the heat Oracle's now-tenuous strategic partnership with HP by trashing newly named Hewlett-Packard CEO Leo Apotheker as not only a dismal failure as CEO of SAP but also as the leader of SAP during the time it committed "industrial espionage and intellectual property theft" of Oracle software.
If this is the way companies today talk about their closest allies, then I'm not sure my dainty little ears can handle what's being said about their enemies.
Or, am I simply and naively failing to grasp the obvious: that Ellison's statements are a clear sign that when HP hired Apotheker on Thursday, Ellison and Oracle immediately began the process of reclassifying HP from deeply strategic partner to I'll-see-you-in-hell competitor?
Yes, the flap started two months ago when HP ousted CEO and Ellison friend Mark Hurd, which triggered a colorful series of remarks from Ellison about the general incompetence and unworthiness of HP's board.
But while some egos were bruised by that commentary, the companies got over that.
One month later, tensions surged once more when Hurd joined Oracle as co-president and was immediately sued by HP over fear that he'd give Oracle HP's trade secrets.
Passions flared over the HP litigation and also Ellison's remarks that HP's "vindictive" lawsuit showed the company's "utter disregard" for the Oracle partnership and for joint customers and was "making it virtually impossible" for the two companies "to continue to cooperate and work together in the IT marketplace."
But once again, HP and Oracle found a way to kiss and make up, allowing HP to retain its very visible presence in front of 41,000 global customers and prospects at Oracle Open World, where Oracle execs delivered one of the primary keynotes.
At that point, the words of HP CFO Cathie Lesjak (who at the time was also interim CEO), spoken during the height of those tensions, seemed prophetic: "In terms of how that's going to affect our relationship with Oracle, obviously with the press Ellison had yesterday, it strained it a bit, but at the end of the day business will prevail and we will go back to being good partners" (emphasis mine).
The problem now is that while the troubles still involve business, the severe strains between the companies have also become deeply, intensely, and irrevocably personal. And the folks feeling like they've been slapped across the face in public include far more than Ellison—here's the list:
The HP Board: In the past two months, the board has taken on the additional role of Ellison's personal stable of on-demand whipping boys as he's assailed them for everything from awful judgment to a lack of financial commitment to HP to incompetence and beyond. Maybe all of the board members have merely deflected those scathing attacks and paid them no mind—but I doubt that. Their choice of Apotheker simply cannot be assessed in any way other than being a direct—and personal—counterthrust at Ellison and Oracle. The HP board is placing what I believe is an extremely risky bet that Apotheker, whose tenure as CEO of SAP can't possibly be regarded as successful by any objective measure, has the leadership and vision and discipline to not only guide the world's largest IT company during a time of enormous internal and external change but that he'll also be able to do so while competing more aggressively and more directly and for larger and larger stakes with, separately, IBM and Oracle—two companies that have already completed extensive internal transformations and are blessed with CEOs and top-level management teams that are deep, committed, focused, and proven.
Mark Hurd: As with the HP board, it's almost impossible to imagine that Hurd has been able to traverse the past couple of months without bringing to bear a vast reservoir of personal feelings—primarily animosity toward HP, the company that deposed him for what many believe were shoddy and unconvincing reasons. By joining Oracle and by taking a #2 or #2A role after being #1 for so long, Hurd is clearly looking for some opportunities to rip market share away from not only IBM but also HP, whose sheer mass--$130 billion in annual revenue—marks it as the biggest target in the market. Anyone who believes that business isn't personal doesn't understand business—and in the case of the very talented Mark Hurd, I think he's going to make his work with regard to competing with HP very, very personal.
Leo Apotheker: Maybe HP's new CEO sees all the media and analyst commentary about him—that he was an uninspired choice, or unproven, or unsuitable, or just plain wrong for the job—and maybe he just shrugs his shoulders without even letting the criticism register. Maybe Apotheker couldn't care less that Larry Ellison says he was rendered "speechless" by HP's decision to hire him, and that Ellison calls him a failure. Or maybe HP's new CEO will blend into his thinking the idea that if it's a fight Ellison wants, then it's a fight Ellison will get, and may the best company win, and that in such a scrap there's no room for this "partnership" hooey.
Larry Ellison: I have said before that nothing Larry Ellison does is by coincidence. After the first round of disagreements and name-calling with HP, I think he was at least willing to bury that hatchet and resume what had been a productive quarter-century partnership. But the Apotheker hire will lead to the breakup of that long-term alliance because Ellison cannot help but take that decision by the HP board—whose widescale resignations Ellison has called for—as an unmistakable declaration of war: for systems, for software, for cloud computing, and for the hearts and wallets of CIOs looking for big, powerful, and brilliant IT partners on whom to bet tens and hundreds of millions of dollars and the future health of those customers' companies.
Bill McDermott: As SAP's current co-CEO said in his upbeat message of congratulations about HP's hiring of Apotheker, "this move only sets the stage for an even deeper relationship between our two companies." As SAP and IBM begin to compete more aggressively in fields such as analytics, it will be difficult for them to retain the depth and richness of their own long-standing relationship and that would make it quite convenient for HP and SAP to begin figuring out new ways to make lots more beautiful music together.
Bob Evans is senior VP and director of
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