Pondering Hurd-to-Oracle Reports

Everybody knows by now that Oracle CEO Larry Ellison and former HP CEO Mark Hurd are good friends, on and off the tennis court.

Ellison, you might recall, sent the New York Times an impassioned email missive decrying the HP board’s decision to show Hurd the door, ostensibly over dubious expense reports. That futile intervention by the Oracle chieftain was testament to his loyalty to his friend and it might actually have reflected Ellison’s true estimation of Hurd as an executive.

We’ll know soon enough, because reports have surfaced in the Wall Street Journal and the aforementioned New York Times suggesting that Oracle might offer a top executive position to Hurd. Other reports also suggest that Hurd could snag a seat on Oracle’s board of directors.

These reports all are fueled by “a person briefed on the talks” between Hurd and Ellison. The person in question has chosen to remain anonymous, apparently due to the confidentiality of the matters under discussion. We don’t know whether the talks are being leaked by somebody inside Oracle, someone close to Hurd, or by other parties with knowledge of the situation.

Like Dropping Anvil on Subdued Prisoner

If Hurd were to join Oracle, it would be in a senior executive capacity, especially if he also were to claim a position on the board. This suggests that one of Oracle’s current co-presidents, Charles Phillips or Safra Catz, could be displaced as a result of Hurd’s ascension. Of the two, Phillips is thought by many to be more likely to suffer if Hurd were to join the Oracle executive team.

Still, if Hurd were to join Oracle, I’d attribute the move to Ellison’s friendship with Hurd rather than to any burning need for Hurd’s talents at Oracle. Hurd would not come cheaply, and — on the basis of a rigorous cost-benefit analysis, surely an approach Hurd would appreciate — it’s not obvious that he’d bring a return on the considerable investment he’d entail.

After all, Oracle doesn’t have difficulty running a tight ship. Why would it have need for the services of an executive who is the technology industry’s answer to Al Dunlap, a man variously honored with affectionate sobriquets such as “Chainsaw Al” and “Rambo in Pinstripes.” Adding Hurd to the mix would be overdoing it, like dropping an anvil on a prisoner who’s already been subdued.

Potential Negotiating Leverage

The fact is, Oracle doesn’t need Hurd’s operational help with the integration of Sun Microsystems, and Larry Ellison doesn’t require or want assistance plotting the strategic course and vision for his company. Besides, Hurd’s strength is not and never was vision. His calling card, his speciality, is finding and then mitigating or eliminating operational inefficiencies. Oracle doesn’t have many of those.

All of which causes me to wonder whether this story has been leaked for other reasons. We know Ellison and Hurd are friendly. We know Ellison is inclined to come to his friend’s assistance. Allow me to hypothesize for a moment. Let’s assume Hurd is in negotiations for a CEO job with another technology company in Silicon Valley, one whose operations might benefit from some vigorous austerity measures. Let’s further suppose that Hurd is trying to negotiate the sort of boffo compensation to which he has become accustomed. Finally, let’s assume that the company in question is reluctant to acquiesce to his demands. In those circumstances, a putative offer of a plum job at Oracle could provide Hurd with convenient negotiating leverage.

No matter what transpires, I would not be surprised to see Hurd take a board seat at Oracle, effectively substituting for the one he lost at News Corporation in the wake of the scandal (or whatever it was) at HP. Ellison and Hurd are friends, after all.

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