Last week Oracle CEO Larry Ellison sent an angry email  to the New York Times attacking HP’s board for its decision to fire CEO Mark Hurd.  You can catch up on all the salacious gossip and speculation about Hurd and what he did elsewhere.  I don’t have the time to develop an informed opinion as to whether the firing was justified. 

What interests me is what this episode shows us about Ellison.  First, it reinforces the notion that Ellison forms strong, passionate opinions that he is not afraid to express using strong, non-tactful language.  This propensity is one reason why we see so little of Ellison in public – his minders are terrified that he will say something politically incorrect. 

We also see that Ellison is intensely loyal to his friends and is willing to stand up publicly in their defense.  Even though he has a reputation for being hard to work for, I believe that this feeling of loyalty extends to his inner circle of executives and that they know that he would fiercely defend them if attacked. 

Most importantly, this episode sheds some light on the complex relationship between Oracle and HP – two companies that a few years ago were the closest of allies.  Now that we know that Ellison and Hurd are friends and tennis partners, it is easier to understand why the corporate relationship has remained intact in spite of increasing direct competition between the two. 

Just a few years ago when Oracle just sold software and HP was primarily a hardware vendor, a close alliance made a great deal of sense.  It was no surprise therefore that the first generation of Exadata came out as a joint product combining Oracle’s database with HP servers.  The great success of that offering made Ellison receptive to the idea of acquiring Sun Microsystems when it came into play last year. 

That acquisition was something of a stab in the back to HP.  It lined the two of them up alongside IBM as the major “one-stop shopping” IT vendors.  Vitriolic attacks by Oracle on IBM have become commonplace since the Sun acquisition, but HP has largely been ignored as a competitor.  Even though HP under Hurd appeared to be a greater threat to Ellison’s ambitions, it never saw the business end of the verbal club with which Ellison regularly beats IBM. 

I have to wonder if Hurd’s eventual successor can maintain the current cordial relationship.  A weak replacement will play into Ellison’s hand and make it easier for Oracle to become the industry’s most influential vendor.  On the other hand, a CEO strong enough to be highly successful might have too large an ego to defer to Ellison.  A future unraveling of the still cordial relationship thus seems more likely than not. 

Those of you that are customers of both Oracle and HP are the ones that need to follow this soap opera most closely.  The rest of us can grab a cold beverage, recline in our La -Z Boy chairs (a product made using JDE software), and enjoy the show.

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