Oracle CEO Larry Ellison likes to surround himself with very smart people that he knows, likes and trusts. When a long time tennis partner, personal friend and proven top executive suddenly became available it was like Christmas in August. Mark Hurd’s untimely exit from HP represented great timing for Oracle. Apparently Oracle co-President Charles Phillips was on his way out anyway so there was a hole to fill at the top.
Phillips got caught up in his own public scandal last year (http://www.huffingtonpost.com/2010/01/23/yavaughnie-wilkins-billbo_n_434106.html). While enormously embarrassing personally, it did not seem to shake Ellison’s faith in him. In my opinion it eliminated whatever chance Phillips had of eventually taking over for Ellison. Phillips apparently expressed a desire to be phased out last year after reassessing his career prospects.
The announcement that Mark Hurd will take Phillips place raises a big question. Phillips had the mildly inflated title of President at Oracle. His role was to oversee the sales and marketing function and to act as the public face of Oracle. His replacement Hurd had total control at HP, a company he had put on a trajectory pointed toward making it the most powerful force in the IT industry. For Hurd to just assume the limited role that Phillips played at Oracle appears to represent a huge step down.
The critical functions that Phillips did not control are now being managed by co-president Safra Catz and by development executive Tom Kurian. Catz runs the operation day to day and has lots of influence over strategy and acquisitions. Kurian collaborates directly with Ellison to formulate Oracle’s sophisticated product strategy. The big question is thus how Ellison gets all of these intelligent, ambitious and talented people to work effectively together without bruising egos.
I have to believe that Hurd has been promised the CEO job at some point in the not distant future. It is just too hard to picture Hurd patiently waiting to get his hands back on the wheel for more than a few years. A reasonable assumption is that something was worked out over the tennis court last month that both can live with. Having Hurd take over in stages over 1-3 years seems like a reasonable guess.
Ellison just turned 66 and Hurd is 53 so the math works. For this chain of logic to be true, Ellison has to be ready to think about backing away – something he has never before shown any inclination to do.
I suspect that Ellison will want to wait until Oracle hits a high note before officially relinquishing control. The transformation of Oracle into the IT industry’s leading one-stop-shopping vendor could provide that high point. It is something that could happen in two years or less if the Sun acquisition works out as well as Ellison thinks it will.
With Hurd in the mix Oracle is definitely going to be a different company than it would otherwise be. Exactly how his influence will be felt in the near term seems uncertain. It may not be apparent until some time next year.
My last posting compared all this to a soap opera. I had no idea at the time how true that would turn out to be. Stay tuned, this story line is just beginning to play out and there will be many more plot twists to report on and analyze.