Questions for Oracle

Questions for Oracle

Summary: Mark Hurd is now an Oracle President. The markets will likely be pleased but that still leaves open a large number of questions about strategy, acquisitions, Fusion, headcount...the list goes on.

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TOPICS: Oracle
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It is hard to fault Oracle's timing of its appointment of Mark Hurd to replace the outgoing Charles Phillips. A long holiday weekend that US analysts take seriously so few were paying attention other than the hard core Twitterers.

The markets will likely welcome the news as representing a strengthening of the board to deliver more profit to shareholders. Look for an up tick in the stock price. The Wall Street Journal notes early thoughts by one analyst:

"I think Hurd is a perfect fit for Oracle," said Brent Thill, an analyst with UBS Securities. "This is a guy who can help take the company to the next level."

Even so, many questions remain. The same Wall Street Journal article raises questions about the conditions of Hurd's departure from H-P and the fact his $35 million payout will be impacted by confidentiality conditions. This is a tricky one. H-P could sue on the assumption that as he is now working for a competitor his ability to maintain confidentiality goes out the window. Experts believe the non-compete will be hard to make stand up but that still leaves the question - what about the money? I guess we'll have to wait see if H-P sues. I'm betting that Larry Ellison has provided Hurd with assurance that whatever his potential loss, Oracle will cover with stock options and the promise of even greater riches at Oracle.

Oracle Open World 2010 has now become an investor led distraction. Attention will be upon Mark Hurd's likely first performance. Some observers will be looking to hear more about the software and hardware strategy, watching for hints about acquisition and holding their breath for any jabs at HP. Other observers will be looking for hints about customer relationships, Charles Phillips old job. Larry Dignan opens up that can of worms with:

Not all observers will agree that Phillips was great with customers. However, Phillips was a consistent front man. Now Hurd is that front man. It’s going to be interesting to watch how Hurd will be received by Oracle customers.

My gut reaction is that customers will not react well. Regardless of the job Phillips did in keeping PeopleSoft, JD Edwards and Siebel customers in line, the fact remains these are old products likely to be replaced by Fusion Apps - assuming that Oracle gets them out the door. Now that the company's main customer advocate has gone, Oracle will need to reassure inquiring minds that Fusion is here and that it will deliver value while continuing to provide support in the handover period.

Early discussions among HR experts like Bill Kutik and Naomi Bloom suggest that while there is plenty to look forward to, the eating won't be so easy. How will Oracle manage this aspect of the Fusion rollout and who will be responsible for holding customers' hands in the interim period? Oliver Marks notes in a conversation with Mr. Kutik that:

Oracle are showing the Fusion version of their Human Capital Management suite for first time at the HR Technology Conference, and other modern applications will be demoed which have modern collaborative ’social’ networking tools built in.

Demo - now there's a word we hear a lot. And what about the remaining parts of the Fusion Apps suite? News occasionally dribbles out but Oracle is keeping its favored analysts tight lipped.

That brings us to R&D. During Hurd's time at H-P, investment in R&D dwindled. Fusion Apps has gobbled up a huge amount of resource but will Hurd use the expected Fusion releases to signal a reining back on that line item? I hope not because to do so would be a clear signal to customers that they are not being as well looked after as the arguments for their 22% maintenance dollars suggest?

Sticking with OOW, the question arises whether Ann Livermore, H-P's EVP enterprise business will appear or whether there will be some hasty rescheduling. Silicon Valley companies are not known for being forgiving when one of their own defects, even if he/she was fired first. It seems inconceivable that Hurd could share a stage with her. However and regardless of the heightened competitive tensions, H-P and Oracle will still do a lot of business together so it makes sense to bring Hurd on and get him off before Livermore's scheduled appearance. One thing's for sure, what happens will tell us a LOT about how the two companies are really getting on.

Then we come to acquisitions. The consensus view is that Hurd can easily slip into Phillips shoes. Like it or not, Phillips roll-up of the large enterprise stack has been impressive as an exercise in financial engineering. What's left is now almost a rump of gaps that Oracle will want to fill and fill quickly. Saying it can take on IBM is one thing, executing is another. Some will argue that at least some of Hurd's results as an acquirer are less than sterling. Look what's happened to EDS? When it was acquired it was ailing. Nothing H-P has done has righted that particular boat. There is plenty of speculation about which company Oracle will tilt at next. Here, Hurd will need to offer analysts a sense of where he thinks the gaps lay.

But what do you think? What questions would you ask Mark Hurd at the upcoming Oracle Open World press conference?

In the meantime, I am left with one fleeting vision: will Larry Ellison and Mark Hurd appear on stage at OOW in tennis attire? It would make an ironic and yet poignant statement.

Topic: Oracle

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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12 comments
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  • It's Not What You Know...

    ...it's who you know!

    -Peter Wexler
    prwexler2@...
  • Let the tactical slicing begin...

    Mr. Hurd will cut to, and into, the bone of the company to make the spreadsheets look good to the analysts. Hey, it worked great at HP.

    As a customer, I do not want Mr. Hurd holding my hand.
    pwatson
  • RE: Questions for Oracle

    What CAN you say about a company that has taken an excellent open source package and turned it proprietary? Snot good for the customers of open source who have already expended $$$ to support it.
    twaynesdomain-22354355019875063839220739305988
  • RE: Questions for Oracle

    Anyone besides me believe, he paid her off to get an early exit out of HP to go work for Oracle in the first place? What has it been a month? This wasn't pre-planned?
    sec_vd
  • Perfectly predictable

    Hurd will do the one thing he knows: Cut costs. That likely means huge layoffs when the first version of the Fusion apps have been released. Oracle has no bigger strategy for apps, they just hope to milk the customers long enough, then maybe buy their way into the next gen of apps by acquiring Salesforce or other leaders.
    ylajali71@...
  • strategy

    Whats that..something more than I understand?...handing opportunities to the competition or start ups..a good move for oracle or just consolidation for short term gain?

    Stock holders don't buy virtual companies anymore you need innovation!
    The Management consultant
  • RE: Questions for Oracle

    Oh, as one of the most recent HP aquisitionnees, I wish the staff at Oracle good luck; they're going to need it. Hurd will elimate all your delivery people, transferring some of them to Best (Currently Cheap) Shore locations then hire lots of sales people to sell things Oracle won't be able to deliver.

    If I worked for Oracle and had the faintest trace of competence, I'd be waiting for the first redundancy cheque and would be out of the door before you could say, "The Grim Reaper's arrived."

    I know some people at Oracle and can tell you that quite a few are forming a queue at the door. The rest of those I know will get a shove along the way from me.
    Gornall
  • RE: Questions for Oracle

    Inmoral and greedy corporations, that is what they are. How come Larry loves Hurd and now has him with him?

    If he does what he did a HP, Goodbye Oracle.
    czorrilla
  • RE: Questions for Oracle

    Hurd will do what he knows best, take from the poor and get the rich, richer. It's all the same corporate junk. Cuit the workforce, cut pay and make employees do it all because, hey we all need jobs...
    JJC4545
    • RE: Questions for Oracle

      @JJC4545

      Yet how many keep fawning all over these crooked, self serving clowns? Which only proves, [b]you can fool a lot of the people a lot of the time.[/b]
      klumper
  • Hurd may have been the inspiration...

    ...for a sign on an ex-NCR manager's desk I saw once.

    "We will pay any price to cut costs."

    Oracle may find that that price is just too high. H-P's had their own run of high-level drama, but I can't help thinking that they are unlikely to be worse off now than they were when Mark Hurd was there.
    Jeff Dickey
  • RE: Questions for Oracle

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