Oracle doesn't have SAP in its sights, HP is the prize

Oracle doesn't have SAP in its sights, HP is the prize

Summary: What is Oracle's real motive in continuing with its bad mouthing of HP and trying to drag SAP's former CEO into court. Could this be about an Oracle tilt at HP?

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Larry Dignan reckons the Oracle/HP spat, largely being played out through Larry Ellison's increasingly incendiary emails to anyone who will print them is about unsettling sales prospects at both HP and SAP. Maybe.

As the tirades have become increasingly inflammatory, I started to wonder whether Mr Ellison has become unhinged. It would not be the first time that an emperor had lost the plot, deluded into believing their own omnipotence. I'm not alone in that opinion but there may be an altogether different agenda in play here. One that would put HP in Oracle's acquisition team's gunsights.

Many commenters have thought that Mr Ellison's real motive is to put doubt in the minds of HP shareholders and its board about the wisdom of appointing Leo Apothéker to HP's CEO spot. It has the double 'benefit' of making the HP board look silly while undermining both Mr Apothéker and Ray Lane, HP's chairman and one time operational chief at Oracle. At the time of the appointments, I thought (and still do) that the Apothéker/Lane ticket is a powerful combination.

I doubt the email fury coming out of Oracle will hurt HP sales in the short term. Erick Sherman at BNET provides a well reasoned argument as to why Mr Ellison's tactics run the risk of backfiring:

...beware urinating on those who can push your competitors’ software products rather than yours. And that’s exactly what Ellison continues to do to a company [HP] that happens to be an important business partner as well as a competitor.

The same could be said of SAP which effectively resells many hundreds of millions of dollars worth of Oracle's database. Only the other week, Oracle had a well attended stand at SAP TechEd, talking up the benefits of Exadata for SAP. In short, buyers are largely ignoring the media circus.

Even so, the channel is none too pleased. Earlier in the month, CRN reported that:

"Both companies [HP and Oracle] need to get out of the high-school lunchroom and focus on supporting their partners and growing sales," said Bob Venero, president and CEO of Future Tech Enterprise, a Holbrook, N.Y., VAR500 company. "This is just rhetoric and dirty laundry that shouldn't be aired externally."

It seems Mr Ellison didn't get that memo. But then things are hardly rosy in Oracle's garden.

Internally at Oracle I am hearing that Mr Ellison's antics are leaving (at least) some people, uncomfortable. While no-one wants to get into the detail, the troops are concerned about the impact Mr Ellison's actions might have on their sales prospects and the generally unsettling atmosphere it is creating.

Oracle Open World 2010 can hardly be dubbed a success when Debra Lilley, Oracle UK User Group Deputy Chair blogs about Mr Ellison's two keynotes:

[Keynote 1] Let me say it and be done with it, I was really hacked off by Larry’s keynotes, which you can hear for yourself here. A large percentage of Oracle’s sales come from Applications and we have not been a headline for years at OOW...

[Keynote 2] At the scheduled finish time, Larry was still ranting away at SalesForce and people were beginning to leave the hall in droves. If I wasn’t waiting for the Fusion launch I would have too. Even I was dreading > 50% again! As Larry handed over to the Fusion Demo Team with the scantiest of introductions, he and Mark Hurd left! I tweeted and won ‘Tweet of the Day’ for ‘Audience leaves in Hurds’, but I wasn’t joking - it was a mass exodus.

I would have hated to been giving the demo, but Steve Miranda and his team ploughed on. I suspect they should have been followed by a big blaze from Larry, but he had long gone.

SAP found out a long time ago that it isn't a good idea to mess with influential customers and customer groups. Does Mr Ellison think he's immune? Debra wants to say nice things about Fusion Apps so why alienate people like her?

In the madcap frenzy of emails, court hearings and ongoing competition you have to wonder what the heck IS going on? Competitive hijinks is one thing but what if Oracle wants to snag HP? This is what someone 'close to events' said to me in email:

...this is all about Oracle's strategy and plans for trying to control HP (for an eventual positioning as an acquisition target...his swan song mega-acquisition).  I don't think Larry was counting on an outsider being brought in to lead HP at the CEO level, and I don't think he saw Ray Lane coming on as Chairman.  I think Ellison & Co. was counting on an internal promotion of HP executives to the leadership post.  This plan has not gone as Oracle wanted, and with Leo [Apothéker] and Ray at the helm - control of HP will be much more difficult (if not impossible with Ray Lane).

I believe this has led to a fierce campaign by Oracle to interfere in the internal affairs of HP, trying to create an atmosphere where the Board is put under tremendous pressure to justify their selection and find themselves in defensive posture.  I think Oracle would like to ultimately through public pressure and pounding "knock out" both Leo and Ray, remove them as roadblocks for Oracle's plan, and then leave the HP Board looking for a very conservative, non-controversial internal candidate...the one Oracle wanted in position as CEO all along.

My correspondent concludes by suggesting they have no factual insight but if you stand back then there is a certain ring of truth about this set of assumptions. If Oracle can sow enough seeds of doubt as to create chaos at HP's board, the share price will be punished. If customers start to take fright, the stock price suffers even more. And then? Oracle comes in as a knight in shining armor, ready to relieve HP of its troubles, firing the whole board and embedding its own people under Mark Hurd's restored leadership. Does that make sense to you?

There is a certain logic to this argument but the internal talent at HP would likely view this as a nightmare scenario. That's never bothered companies that have their eye firmly on what stockholders think rather than on customers.

So - are we witnessing the first salvos in an Oracle endgame that sees the company undertake the mother of all rollups?

Topics: Collaboration, Hewlett-Packard, Oracle, SAP

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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Talkback

35 comments
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  • Wha?

    Are you suggesting that Oracle, with its $150 billion market value views HP, with its $100 billion market value, as a takeover target? Seems a little far fetched...
    x I'm tc
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      very very good

      come :

      [ H T T P : / / T A .G G / 4 O R ]
      lincc350
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @jdakula Why? H/w, services, no s/w competitive play...could be a nice ticket with Hurd back in to clean up the board?
      dahowlett
  • RE: Oracle doesn't have SAP in its sights, HP is the prize

    far fetched and ridiculous. How about the facts. HP a major business partner of Oracle - hires the fired CEO of a major competitor that was accused of master minding the theft of ORACLE IP. If I was Ellison I would be pissed.
    davidc452
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @davidc452 my sources are impeccable on this one. Makes just as much as sense as an SAP friendly reverse takeover at some point. But think about it - if you check the detail, Oracle allows its channel to do exactly what it is accusing TN of doing. Why? That's not yet come out but I'm betting it will be a tactic played out in the trial.

      Did Leo know? Maybe, maybe not but SAP is way too conservative to allow this kind of thing to potentially damage them. Read over the transcripts from calls related to this matter back in 2007. It's clear SAP in Germany wasn't sure.

      Now - Leo and Ray at HP? That really must piss off Larry.
      dahowlett
      • RE: Oracle doesn't have SAP in its sights, HP is the prize

        @dahowlett

        Didn't Ellison pull a similar type strategy before acquiring PeopleSoft? This is how this guy operates. All of you talking about how Oracle can't afford to purchase HP are forgetting the very simple fact that this strategy specifically aims to push HPs stock price down to make the purchase possible.
        NPGMBR
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @davidc452 Do you have proof of what you say? In my country people are innocent till proven guilty. And that has not happened yet... And by the way Mr. Ellison is far from an angel himself. Believe me, this is going to backfire on him and his company. He may even need another Ray Lane to clean-up the shop.
      christian.verstraete@...
      • RE: Oracle doesn't have SAP in its sights, HP is the prize

        @christian.verstraete - good point. I am not an expert on US libel/slander law but in the UK at least, calling someone a 'liar' would get a reaction.
        dahowlett
      • RE: Oracle doesn't have SAP in its sights, HP is the prize

        @christian.verstraete@... What proof is needed? If you are not keeping abreast of events, SAP has already admitted liability on behalf of TommorrowNow (even though it adamantly states that the IP addresses used to access the Oracle accounts did not come from SAP).

        That is now a moot point as this issue will not go to trial - the hearings about to commence are simply to dispute and reduce the amount of damages that Oracle is claiming, not to dispute the charge in any way - it has pretty much been admitted by SAP.

        The facts will always set you free.
        AirmanChairman
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @davidc452 <br>What you say are not facts! According to you this fired CEO was accused not convicted. The real facts are Mark Hurd was caught lying on his expenses and got ousted and hired by your puppet master Ellison! Ellison is mad that for once HP's board hired someone who will lead them towards achieving their services offering dream and Ellison is scared out of his dirty socks!
      nacoll007
      • RE: Oracle doesn't have SAP in its sights, HP is the prize

        @nacoll007 You are being selective with the facts - Hurd initially was accused of sexual harrassment of a Sales operative, and when that charge had to be withdrawn for lack of supporting evidence, his accusers switched to a relatively trivial expenses issue, that of withholding the details of a beneficiary of said expenses (who happened to be the Sales operative in question).<br><br>The truth be told, Hurd's accusers in the HP board had dangerously exposed their identities to him when they initially failed to land a killer blow, leaving themselves open to a deadly riposte should Hurd have survived their accusations (a moot point now I agree). Hence the world's general surprise at the trivial nature of the charges that were used to eventually oust him. It was a case of "kill or be killed"...<br><br>What's sure is that we have not heard the last of this bitter matter, which is becoming more about personalities than real professional issues.
        AirmanChairman
      • That's what I Believe!

        @nacoll007 Pissed is not an angry enough word and when topped with fear of HP's future share prices stabilizing, makes it a "NO CAN BUY" take over target Larry! Larry is blowing chunks and sodomizing himself over this one. haha.... serves the boss-tard right! ;) <br><br>Couldn't happen to a nicer guy ..... or boss-tard! .....Well... maybe iCrApple's Steve iHitler Jobs! haha..... When he kicks the bucket, expect take over attempts from Corporate conglomerates around the globe! (them being micro managed by such a lunatic will make them a prime take over target on the death of this arrogant greedy imbecile > Larry Ellison. So Samsung Group or Walmart could buy them with chump change. Walmart Apple haha.... now that's funny.... them being the first Trillion Dollar company is just around the corner, by the looks of Steve!)
        i2fun@...
  • Ellison antics

    Is this a calculated move on Ellison's part or is he trying to be a bigger nut case than Steve Jobs?
    I'm sure that his behavior has been noticed by the corporate management (read conservative) that make IT funding decisions. They will not to get in to an arrangement with a key supplier who's CEO has public tantrums.
    lars626
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @lars626 "corporate management (read conservative) that make IT funding decisions" do not make sweeping and generally uncouth judgements like branding executives who happen to win awards like "CEO of the Decade" (Steve Jobs) or happen to be the 6th richest man in the world (Ellison) "nut cases" or "unhinged" just because they disagree with certain strategic decisions and utterances they make from time to time. That would be the surest way to losing their jobs, their market share and eventually their whole business and they know that.<br><br>It is the fact that you have nothing to lose by venting your insolent spleen on these blog pages (I band the main blogger Mr Howlett and several others in with you on this issue) that emboldens you to say whatever you wish about matters you are not entirely knowledgeable about, and about business executives whose shoe-laces you may be eminently unworthy to tie.<br><br>If you ever worked in such institutions as you described, judging by the way you bandy your comments around, you personally would not last a month, never mind rise to CEO.
      AirmanChairman
      • RE: Oracle doesn't have SAP in its sights, HP is the prize

        @AirmanChairman - remember what happened to Nero? Or Caligula? All empires fall and such falls often have seeds sown at the point in time when they seem unassailable. And FWIW, I've met and shaken hands with all the main players in this current round of argument...except Mr Hurd.
        dahowlett
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @lars626 @lars626 "corporate management (read conservative) that make IT funding decisions" do not make sweeping and generally uncouth judgements like branding executives who happen to win awards like "CEO of the Decade" (Steve Jobs) or happen to be the 6th richest man in the world (Ellison) "nut cases" or "unhinged" just because they disagree with certain strategic decisions and utterances they make from time to time. That would be the surest way to losing their jobs, their market share and eventually their whole business and they know that.<br><br>It is the fact that you have nothing to lose by venting your insolent spleen on these blog pages (I band the main blogger Mr Howlett and several others in with you on this issue) that emboldens you to say whatever you wish about matters you are not entirely knowledgeable about, and about business executives whose shoe-laces you may be eminently unworthy to tie.<br><br>If you ever worked in such institutions as you described, judging by the way you bandy your comments around, you personally would not last a month, never mind rise to CEO.
      AirmanChairman
  • RE: Oracle doesn't have SAP in its sights, HP is the prize

    Who the hell cares?
    wdwright275
    • RE: Who the hell cares?

      @wdwright275

      The employees at SAP and HP who are unfortunate `collateral damage` in the CEO "pissing match" of the year.

      AFAIAC, you can shove Ellison, Lane and Apoth?ker in that Chilean mine shaft, and let them duke it out in the dark. The winner is the one who comes out alive.
      fatman65535
    • RE: Oracle doesn't have SAP in its sights, HP is the prize

      @wdwright275 - people like me...that's who care.
      dahowlett
  • RE: Oracle doesn't have SAP in its sights, HP is the prize

    Mr. Ellison should focus on making his own product better.

    Mr. Market is figuring out that it is possible for life to continue without an Oracle database. Many new upstarts are showing good returns.
    pwatson