HP has just jumped to the head of the line of major IT vendors that do not like Oracle leaving IBM, SAP, Microsoft and many others to fight over second place. The unraveling of Oracle’s strongest partnership has come very fast. It started when Oracle bought Sun and backed out of its joint agreement with HP to develop Exadata – a sin that was forgivable as long as the two CEOs involved played tennis regularly.
A few weeks ago the HP board sentenced Hurd to the death penalty for a crime Ellison thought deserved a speeding ticket. He leapt publically to Hurd’s defense in a strongly worded letter. The crafty side of Ellison’s huge brain then kicked in and saw this as a wonderful opportunity. Hurd could replace the once effective but now wounded co-President Charles Phillips who wanted out.
The HP board wanted Hurd to suffer, not to instantly rise from the dead to haunt them. It weakly counter punched by launching a lawsuit aimed at preventing Hurd from taking the job. The suit claims that working for Oracle violates Hurd’s employment contract. I am no lawyer but it is my understanding that employment contracts are very hard to enforce in California. If that is the case, the best HP can hope for is that Hurd will be discrete in using information brought over in his head. That appears to be all that IBM got after suing to prevent one of its On Demand experts from going to work for Ellison a few months ago.
Rather than quietly waiting for the issue to work itself out in court, Ellison has gone on the offensive by threatening to let the whole alliance between the two companies come apart if the lawsuit is not dropped. That may already have happened in practice since it is hard to picture HP’s board caving in to a very public threat. If all that was not bad enough for HP, a number of its hardware resellers are reportedly ready to jump over to Oracle / Sun following the Hurd hiring.
Who knows at what point the downward cycle will hit bottom or which side will throw the next rock. HP EVP Ann Livermore is scheduled to speak right after Ellison gives the opening keynote at Oracle OpenWorld on Sunday. I can’t wait to hear how she is introduced or what she says. If someone from another company ends up filling that speaking slot it will be a clear indication that full-scale war is being waged.
Any of you that follow HP more closely than I have are welcome to weigh in. I can’t claim any special knowledge of HP but have always had the impression it was one of the classier vendors in the IT market. This whole sad soap opera is hardly enhancing that reputation.