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10/2/2010
09:42 AM
Bob Evans
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Global CIO: Larry Ellison Puts HP In Crosshairs Via Slap At New CEO

Eleven days after HP and Oracle kiss and make up over Hurd's transfer, HP picks a former Oracle nemesis as CEO—and Ellison's 'speechless' reaction speaks volumes.

In an industry stuffed with uneasy alliances forged by the frequent necessity for adversaries to compete and cooperate simultaneously, I think the Oracle-HP pairing—one that's been in place for more than 25 years and has been about as deep as such partnerships can get—is rapidly becoming the uneasiest of all.

Larry Ellison and Oracle were eventually able to get over HP's ouster of his pal Mark Hurd two months ago, although in the interim Ellison famously thundered about the incompetence of the HP board, and HP sued Hurd to prevent him from joining Oracle since the two companies are beginning to compete across a wider spectrum.

But all that was overcome in the interest of shared business opportunities that were proclaimed in press releases gushing with mutual admiration and that just so happened to come out right in time for some HP executives to take the stage in prominent keynote spots at Oracle Open World.

DefCon 4 status was ratcheted back down to DefCon 1, and everything was once again fine between HP and Oracle.

And then on Sept. 30, the same HP board that two months earlier had pushed Hurd out and prodded Ellison into a rant about their horrendous judgment announced that the company's new CEO was none other than long-time SAP executive and short-time SAP CEO Leo Apotheker.

Of all the executives in all the industries from all the companies, HP picks the one guy with whom Ellison would find it just about impossible to work: Leo Apotheker, who not only worked for Oracle's arch-enemy but was ultimately fired as CEO over declines in market share, profits, employee morale, and customer trust.

Of course, it's not the job of HP's board to placate Larry Ellison and Oracle with its choice of CEO. But it's also impossible to imagine that the HP board, particularly with its simultaneous addition of venture capitalist and one-time Ellison lieutenant Ray Lane, would not have understood the repercussions with Ellison that their hiring of Apotheker would have.

And those repercussions—at least the initial ones—were juicy. Here it is from the Wall Street Journal:

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"I'm speechless," he wrote in an email to the Wall Street Journal. "HP had several good internal candidates…but instead they pick a guy who was recently fired because he did such a bad job of running SAP."

An H-P spokeswoman said Ellison's comments don't "deserve the dignity of a response."

Well well! Is this any way for bosom-buddy allies to talk? Is this just a temporary bit of pique from two partners that will soon settle back into comfortable cooperation? No, this means war. And here's why:

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