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9/20/2010
07:26 PM
Bob Evans
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Global CIO: Is Larry Ellison Going Soft On HP And IBM?

Dropping his standard jabs and insults, Ellison's been downright sweet to HP and IBM lately. What the heck's going on here?

Over the past several years, Larry Ellison has often demonstrated that the only thing he likes as much as 20% annual profit growth and new Oracle products is skewering his competitors publicly, pointedly, and personally.

But while those jabs and hooks and uppercuts no doubt spark blood-curdling standing ovations among the Oracle sales teams, I've often wondered about the reactions Oracle's customers have when they see or read about the insults Ellison is famous for dishing out. Do they find those taunts—often containing some truth but not the whole truth and nothing but—funny, comforting, bracing, or demeaning?

Do they make CIOs more eager to do business with Oracle, or do they provide a chilling effect that suggests to customers that Ellison cares more about trampling his own enemies than in solving his customers' problems?

On the flip side, it's hard to argue with Ellison's track record—and lately, it's becoming even harder:

  • They said the Sun acquisition was a disaster because the company was too far gone and, besides, what the heck did Oracle know about hardware anyway? (Didn't happen—in fact, Oracle's Exadata has sparked an enormous trend among IT vendors of all stripes eager to tap into customer demand for highly integrated and optimized systems.)

  • They said Oracle's profit margins would tank under the weight of the less-appealing business model for hardware. (Didn't happen; in fact, quite the reverse.)

  • They said nobody can compete with IBM in high-end systems. (Jury's still out but Exadata is the most-successful new product Oracle has ever had, with an annual revenue run rate of $1.5 billion and growing.)

    I think customers sense this and find some appeal in Ellison's outsized comments but only because he surpasses those with outsized achievements. And you have to admit that, unless you were on the direct receiving end of some of his barbs, they could be pretty intriguing.

    Years ago, as Microsoft began to compete more aggressively against Oracle in databases, Microsoft became entangled in a long and troubling series of security concerns and problems. Ever the opportunist, Ellison said that he had to hand it to Microsoft because, as he put it, Microsoft wasn't just settling for run-of-the-mill security problems. Instead, Ellison said, Microsoft was practicing "state-of-the-art virus release and propagation."

    More recently, two of his primary targets have been IBM in the realm of high-end systems and Hewlett-Packard in the areas of . . . hmm . . . how do I put this? Let's call it board-level governance, board-level leadership, board-level strategy, board-level decision-making, and board-level wisdom.

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    Three months ago, Ellison revelled in the chance to discuss how the Exadata Database Machine was invading the "bluest of the blue" IBM accounts, and in numerous earnings calls and public comments over the past two years, Ellison has repeatedly said that it will be Oracle and not IBM itself that fulfills the promise of T.J.Watson Jr.'s iconic IBM Corp. of the 1960s.

    And as for the recent HP scraps, well, injecting himself into the HP board's ouster of former CEO Mark Hurd was something Ellison couldn't avoid, and his comments couldn't have been more blunt:

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