This may be election week, but the big political battle isn’t really the mid-term elections — it’s the drama going on between Oracle and HP with the unprecedented action of Oracle’s CEO and founder calling HP’s new CEO a thief in what appears to be a massive pre-emptive effort to discredit the man. However, like the elections, I think this is mostly smoke to cover up other problems Oracle has, and that’s what I’ll focus on this political week.
You may recall I bought a new electric bike for my wife last year, and I finally bought a new one for myself as well. I went for the military specification M-750. Now if the country goes under, and I have to parachute into some other country in order to live, I have the bike to do it, and it is my product of the week.
Oracle’s Smoke
A lot of people are struggling to understand why Larry Ellison, Oracle’s CEO, is suddenly so outspoken against HP and its new CEO, given all HP did was fire and replace Mark Hurd. Granted, Hurd is one of Larry’s few friends, but this behavior seems kind of over the top.
It feels almost political in nature — as if Larry were throwing up a smokescreen to conceal something he didn’t want folks focused on. If true, here are some of the contenders.
An HP 5th Column
I’ve been going to a number of analyst events over the last few weeks, and you can imagine that the battle between Oracle and HP is front of mind. Some of the discussions surround what will happen with Todd Bradley, who made a massive push to get the CEO spot. Some have speculated that he would be Hurd’s inside man if Oracle should move to take over HP.
Bradley just launched the Palm Pre 2, which may represent redemption — both for him and for the company, but I personally doubt he is some kind of Oracle 5th column, even though he was Hurd’s hand-picked successor.
Lack of an Oracle + Sun Strategy
More interesting is that none of us seem to think Oracle really has a strategy for the new combined company, and it is aggressively trying to divert attention from that fact.
Oracle has lost such an incredible number of people from Sun during the acquisition that many of us no longer think the unit is viable, and it seems to have dropped into open war with the folks behind products like OpenOffice. A lot of the folks behind those efforts have already left.
Intentionally Bad Customer Service
A common topic is that Oracle is becoming Computer Associates, in that corporate buyers are not only avoiding Oracle — they are avoiding companies that might be acquired by the firm. Safra Catz is often quoted as saying that Oracle doesn’t care about customer satisfaction because the customers can’t move.
This reminds many of us of how IBM thought just before it collapsed in the 80s and replaced its CEO. Oracle would clearly prefer that we talk about the drama between HP and Oracle, particularly in the context of HP’s new CEO behaving badly, than that.
Secret Mega-Merger
There are some who think Larry is using this to screen his effort to buy EMC and keep the speculation from driving up EMC’s stock price before he can make an offer. The offer would drive up the price regardless, and this strategy would likely fail. Same with an attempt to buy HP, unless he is hoping the press coverage will drive out HP’s board, which also seems doubtful.
With the analysts pointing out how Mark Hurd aggressively cuts the salaries and benefits at the companies he leads — justifying the need to do so with questionable studies and then taking a huge bonus for the result — I doubt many firms are going to want to be acquired by Oracle anyway. After working so many years to build something, you hate to see a buyer kill it.
Covering Up the Hurd Mistake
Finally, there is a running pool on how long it will be before Larry Ellison realizes he made a mistake with Mark Hurd and boots him out of the company. This is because Charles Phillips, Hurd’s predecessor at Oracle, largely behaved like he was Safra Catz’s aide, and clearly deferred to her in all things.
Mark Hurd is the guy who forced out HP’s female Chairman Patty Dunn and was under investigation for behaving improperly with another female HP employee when he was fired.
His history of working for others, particularly women, is really bad, and Catz has a reputation of being kind of a dragon lady and not being particularly forgiving when people, male or female, forget their place. While Charles Phillips’ sales and marketing role didn’t overlap with Catz’s territory, Hurd has historically had a massive cost focus, and he doesn’t like M&A, which Safra Catz loves — all of which should put them in near-constant conflict.
One of the scenarios we are considering is that Hurd is planning to use the possible EMC merger (or another large one) to discredit Catz and remove her as a threat. We’ll see — and there are a number of analysts who are watching for signs of this potential drama unfolding.
However, this may not be some political strategy. It could be something much simpler: Larry may be feeling his age.
Or is Larry Just Feeling His Mortality?
You can see this with both Larry and Steve Jobs suddenly doing things out of character and being very visible in the press. You saw similar behavior from Tom Perkins when he moved to help Mark Hurd force Patty Dunn out of HP (as highlighted in the book The Big Lie. Suddenly a guy who was not very vocal in the media was all over the news and trying to destroy the company he helped build just to hurt one woman.
I’ve seen this many times before, with CEOs who start to realize they’re at the end of their run — or that it has effectively ended. They want to demonstrate they aren’t a paper tiger and still can be formidable. And because there is little else of true importance in their lives, they use their wealth and power to hurt someone else because they need to feel powerful again. It is kind of an old rich guy late-life crisis.
Perkins loved HP and valued his position on the board highly, yet assured he would never be asked back and that other boards would avoid him by violating his fiduciary duty to HP and using the company as a hostage in order to hurt Patty Dunn. She was the HP chairman and undergoing chemotherapy at the time.
Steve Jobs used his influence to break into a blogger’s house, likely destroying the effectiveness of the police unit he used and eliminating its value to protect Apple’s intellectual property in the long term.
Now Larry Ellison is going after a brand new HP CEO. Andy Grove, Bill Gates and Thomas Watson Jr. exited gracefully. Let’s hope this latest generation of aging CEOs can learn from their examples.
Wrapping Up
Boy, I hope I’m wrong about the last, because crazy billionaires can do a lot of damage — and if there is anything this recovering industry doesn’t need at the moment, it is more problems.
However, there is something behind Larry’s unusual behavior, and it makes no sense that he just suddenly decided HP’s new CEO was a crook. What do you think his hidden motivation is?
Product of the Week: e+ M-750 Electric Bike
When I grew up, the games I played had to do with James Bond and “The Man from U.N.C.L.E.,”so I’ve always had a fondness for cool gadgets, particularly if they worked.
I had one of the first TidalForce cruiser electric bikes, and the engine was taken from a military product that was deployed with paratroopers, but I always regretted not buying the consumer version of the actual military bike.
Well e+, which took over for TidalForce with an improved product, brought out a numbered edition of the Military Fold Up electric bike, the M-750 2.0. Since my TidalForce was aging, I just bought it — and it is wonderful.
It now has a 1,000 watt engine, it is military flat black, and it still folds in the middle (though I’m not going parachuting with it).
As you would expect, for an electric bike, it is light and fast, and it is such a kick to pass guys who are sweating like pigs peddling up steep hills with an easy stride and a smile (Xthe battery is concealed in the front hub and the engine in the rear hub) with few the wiser.
It is kind of like being bionic, and I have to admit it kind of takes me back to being a kid and I sometimes pretend, just a little, I’m Napoleon Solo (he was the man from U.N.C.L.E.) sneaking up on THRUSH. It isn’t cheap — but I so love my new bike, it had to be my product of the week.
Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.
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