Oracle shows off art of war by hiring Mark Hurd

September 7, 2010

Larry Ellison has launched another phase of his long-standing battle with Silicon Valley. A Sun Tzu admirer, the Oracle boss roundly mocked the board of rival Hewlett-Packard when it forced out Chief Executive Mark Hurd last month. By hiring Hurd, Ellison backed up his words. He not only gains a well-regarded operations guru, he follows the Chinese general’s sixth-century BC dictum “Know your enemy.”

Hurd should slot in nicely as a lieutenant. He’ll serve as co-president alongside Oracle veteran Safra Catz, who will continue to manage legal affairs, finance and acquisitions. Sales, marketing and client support will be Hurd’s mandate. Ellison will still chart the ship’s course — and presumably assume any other tasks that suit him.

This division of power would seem to invite executive infighting — but should nevertheless work for Oracle. It has worked for years now, with Hurd filling the role of the departing Charles Phillips. Ellison is bored by day-to-day operations and prefers to focus on the broad technology landscape. Moreover, the persistent critique of Hurd is that he lacks strategic vision. His new position should allow his strengths to shine.

Hurd is perhaps best known for cost-cutting following acquisitions. Before he was forced out of HP for allegedly fiddling his expenses related to a sexual harassment claim, he grew operating margins from 4 percent in 2005 to about 9 percent. Investors like the prospects — and sent Oracle shares up about 5.5 percent.

Oracle is also a serial acquirer. The company has made 60 acquisitions over the past five years, according to Thomson Reuters. That’s about 20 more than HP made over the same period. Moreover, Oracle is still digesting the purchase of Sun. Hurd’s experience at running NCR and HP — two companies that produce both software and hardware — should enable him to make contributions on Sun right away.

Hurd’s past may be his most valuable attribute. Oracle and HP are now in heated competition from business software to servers. Inside knowledge of how its rival runs and the status of its client relationships could prove invaluable. And Hurd will presumably be plenty motivated to stick it to his former employer. Ellison is proving himself a shrewd disciple of the art of war.

Comments

this is capitalism. awesome.

Posted by jmcs | Report as abusive
 

But Sun Tzu also wrote about compassion and not to kill-off enemies when they are weakened and defenseless. Selective application of his teachings is simply a mark of greed.

Posted by bogeyman | Report as abusive
 

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