Why Oracle recruited HP's Mark Hurd

Has Larry Ellison picked a successor?

Oracle's decision to hire the former HP CEO Mark Hurd as co-president could be a significant coup for his new employer, according to analysts.

Just weeks after leaving HP, Hurd has joined Oracle, becoming a member of its board of directors and working alongside fellow Oracle co-president Safra Catz.

Oracle watchers are already predicting that Hurd could have a major impact on the software giant, in particular on the integration of recently-acquired Sun and the development of its professional services business.

Integrating Sun into Oracle
Chairman of the UK Oracle User Group Ronan Miles said Hurd's experience with HP's hardware business will be beneficial for Oracle as it looks to maximise the benefits of its acquisition of Sun.

Oracle CEO Larry Ellison shows off the Exadata Database Machine, one of the first hardware products developed with Sun
(Photo credit: Oracle)

"The most important thing has got to be the fact that [Hurd] is coming from a hardware company with everything that pertains to that," Miles said.

"From Oracle's viewpoint, the world's changed hugely with the acquisition of Sun. It's just a completely different business - hardware from software - so it makes a huge amount of sense for Oracle to go and get the expertise at its most senior level in order to drive that forwards," he added.

With hardware requiring a different financial model and creating a need to deal with numerous component suppliers, Oracle is in new territory and Miles feels Hurd is well placed to help the company deal with that. "There aren't that many senior folk who have got experience of running multi-billion hardware-software company," he said.

"That additional hardware experience has got to be of huge value. Having Mark on board certainly continues Oracle's evolution into a hugely credible IBM competitor," Miles added.

Gartner VP and research fellow Massimo Pezzini agrees that Hurd's experience in the hardware business is a key reason for Oracle's decision to recruit him, and that he's likely to be instrumental in developing strategy around Sun.

"Clearly there is nobody at Oracle that has deep experience of running a hardware company and clearly Mark, with his experience at NCR before and HP, has a lot of experience in terms of the challenges and the issues associated with the hardware business," Pezzini said.

According to TechMarketView research director Philip Carnelly, Hurd's reputation for bringing about operational efficiency will mean help him boost Sun's efficiency.

"They've made [Sun] a fully-functioning part of Oracle now but that doesn't mean...

...there isn't lots of room for looking at the ways that Sun does what it does and thinking about how it could do it better," Carnelly told silicon.com.

"He'll probably have a good hard look at the way Sun is run, the manufacturing processes and all those sorts of things, which is all new stuff to Oracle." Carnelly added that it wouldn't be a huge surprise if Hurd brought in some of the people he worked with at HP to help him.

Beefing up Oracle's professional services
Gartner's Pezzini said Hurd's arrival could also be significant in terms of Oracle developing its professional services and consulting business.

Oracle still needs to develop its professional services capability if it is to really challenge the likes of IBM and HP, with Oracle currently relying on partners to provide these consultancy services.

"I suppose that Mark will also be instrumental in defining an Oracle strategy in [the professional services] direction," Pezzini said. "Mark, by having managed HP, can probably bring to Oracle a lot of experience and a lot of insight on how to successfully run and grow a professional services and consulting business, which would be the third leg of the Oracle go-to-market strategy," he added.

Former HP CEO Mark Hurd has joined CEO Larry Ellison at Oracle's headquarters in Redwood Shores
(Photo credit: Oracle)

Oracle's succession planning
Another theory posed by TechMarketView's Carnelly is that Oracle may view Hurd's recruitment as a way to provide a successor to Oracle CEO Larry Ellison.

Carnelly said that, for Hurd, playing second in command at a smaller company than HP doesn't make a huge amount of sense. "I think the signs are quite strong that [Oracle is] lining him up to become the CEO. It would make perfect sense," Carnelly said.

"It's a coup for Oracle I think to have someone of his stature to come in and help run the business," he added.