Global CIO: Resurrecting Mark Hurd: Larry Ellison's War With IBM
One month after resigning in disgrace from HP, Hurd joins Ellison's pursuit of IBM. Here are Hurd's top 10 challenges.
Unless Hurd can smoothly handle a range of interpersonal and strategic challenges (conveniently listed below), all of this early happy-talk theory will rapidly devolve into back-stabbing and acrimony—and instead of Ellison and Hurd taking on IBM as a complementary pair, IBM will prove to the world that while Oracle can bark like a big dog, it's only got the bite of a poodle.
And lest there be any doubt about IBM being the ultimate target for Ellison and Hurd, here's the first comment from Hurd in the Oracle press release about his hiring: "I believe Oracle's strategy of combining software with hardware will enable Oracle to beat IBM in both enterprise servers and storage."
Indeed, as Ellison himself said in late March when he named IBM and SAP as Oracle's primary targets, "I don't want to pre-announce anything, but we're gonna get better and better at very large-scale transaction processing. Our intent is that the Exadata line will challenge the biggest IBM P Series machines and beat them badly in performance, reliability, and cost. And we think we can do that: in transaction processing, we're twice as fast, and in data warehousing, we're 10 times as fast. Those are our goals: to be twice as fast as IBM's biggest, best box and again, at a dramatically lower price." (You can read all about it at Global CIO: Oracle's Larry Ellison Declares War On IBM And SAP).
But IBM has had lots of challenges in the past and it still sits atop the IT world as the most successful and well-respected enterprise-technology supplier in the market. So for Ellison and Hurd to extend their talk into action, here are the Top 10 Challenges Hurd must overcome:
1) Remember who's the CEO. This is a tough one, and if Hurd can't truly internalize it, he and Ellison will engage in some colossal head-butting. And Hurd will lose. As I wrote in yesterday's column before Hurd's hiring was announced, called Global CIO: Larry Ellison And Mark Hurd: The Job Interview": HURD: "Yeah, well, as you know, while I didn't really enjoy your critique of my strategy at HP with 'the infrastructure company' stuff, I see your larger point. And based on a point you just made—but Larry, let me say, this is hard for me; I'm not used to anybody telling me what to do or how to do it. So I want you to know I'm trying, but if it was anybody but you talking to me like you have, I'd tell that other person to KMA." ELLISON: "I understand, Mark. Change is hard. But it is me. So go on."
2) Remember who the competition is. We could also call this one, "Duty before ego," because Hurd would not be human if he didn't feel at least a fairly strong desire to hit back hard at HP for what he feels was its unfair treatment of him as he was forced out. But as noted above, his and Oracle's primary competitor is IBM, and not HP. Hurd would do well to remember that, because Ellison certainly won't be forgetting it.
3) How to take on IBM's superior hardware lineup? Ellison loves Sun's hardware, is investing in it, and believes in it. But IBM's got a bigger, broader, and deeper set of servers that scale up to the world's most-powerful mainframes and back. IBM's also accelerating the pace at which it marries that hardware with prominent applications for what it calls optimized-workload systems. At HP, Hurd proved he can build a vast lineup of hardware; at HP, he'll have to prove he can build one that wins in markets that truly matter.
4) Safra Catz and collaboration. Ellison's low-profile numbers and operations whiz has proven to be indispensable in leading internal integrations after acquisitions, driving the profit growth Ellison demands, and helping manage the operations that support the sale and maintenance of Oracle's thousands of products. At HP, Hurd—fairly or not—built a reputation among analysts as someone obsessed by numbers, operations, and efficiency. He'd better not try to hunker down into that type of comfortable role at Oracle, because Catz is already handling it quite well and she has Ellison's unwavering support. So Hurd will need to look outward to the market to show his value.
5) Replacing Charles Phillips. Brought in seven years ago to fortify sales and marketing and customer relations, Phillips was highly respected and admired across all those constituencies. Hurd will need to tactfully respect the traditions and policies set in place by Phillips while also instituting his own new customer-facing strategies, leadership, and approaches. This is where Hurd, if highly successful, can cement his future as not just executive #2B but as #1-to-be.
Next comes the shopping list of four acquisitions Hurd should lead:
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