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Oracle's Mark Hurd: We Know CIOs

Responding to OpenWorld critics, Hurd makes the case for why customers need to put more of their eggs in the Oracle basket.

Rob Preston

October 27, 2011

5 Min Read

"Those are examples of integration, the fact that we now have the ability to serve you modularly, don't force you to rip this out, to replace that. You can take this or that, and by the way you can deliver in the cloud, or on site, and you can integrate it with your legacy environment. If that's not integration, I don't know what is. We're going to continue doing more and more of that, and to be blunt with you, it's an expensive strategy. It's a customer-centric strategy."

Tough World

Perhaps that last remark was a retort to InformationWeek contributor Greenbaum, who in an Oct. 12 column laid into Oracle's acquisition and integration strategy as investor-centric, not customer-centric.

Hurd was cagey about future acquisitions. Yes, Oracle has more than $32 billion in cash, but he wouldn't be pinned down on specific market opportunities or whether Oracle would still do mega-deals on par with the likes of PeopleSoft, Siebel, and Sun. This week's RightNow deal shows Oracle's head is now firmly in the cloud after years of pooh-poohing this technology movement. Its acquisition deal the week prior, for privately held Endeca, a maker of on-premises content management software, was a junior version of Hewlett-Packard's $10 billion deal for Autonomy a month ago.

I turned the conversation back to customers, specifically CIOs and their top priorities. Hurd had this to say:

"Well, it's a tough world, man. When I grew up in this industry, there were IBM 360s, DEC VAXs, Data Generals--all that kind of stuff. And this [pointing to his iPhone] is a VAX. The power in this thing is like a VAX. Two billion of these [smartphones] in people's hands by 2015. You'll have 1.3 billion mobile workers in the world in roughly the same timeframe. You'll have 70% to 80% of all the growth in the world coming out of the E10, not the G7. So you've got this highly global, highly urbanized population with very powerful tools.

"Once you get past terabytes to petabytes and move to exabytes and zettabytes, and you've got 2 billion of these VAXs in people's palms, banging on 70 zettabytes of data, the corporate world is sitting there with applications that are 20, 25 years old. They're just not built to service that world. Add to that the consumer change. I'm old enough to have been trained to accept crummy service. My youngest one expects to get instantaneous answers to whatever questions she asks wherever she is whenever she wants. With new data sets that are now huge. Let's forget the security issues for a second. Then add to that you've got CEOs building strategies to chase e-commerce solutions, mobile solutions, trying to get in front of more customers, and their strategies have to align to their business models, their business models to their processes, their processes to their applications. So someone has to realign these apps to these new strategies.

"And since this is all really hard, I'm sure your budget must be up 50%. The answer is, no, your budget is down 4%. So what are you going to do? You don't have excess money. You have a relatively old infrastructure. I have customers who don't even know how many applications they have, let alone know who wrote them and how they got there. And you've got a CEO driving you to this new world, and you can't connect these dots.

"What you want from somebody like Oracle is, help me more. Sit down with me. Understand my strategy, my business model, my processes, my applications. Bring to me the aggregate portfolio of Oracle that helps me to save money at the same time you help me to innovate. We're one of the few companies in the industries that can help you take cost out and get more efficient and simultaneously help you innovate. But to do that, we have to get to a level of intimacy and communications."

But as companies become so highly dependent on Oracle, for not only their core databases and applications, but also the hardware they run on, isn't that a recipe for lock-in?

"If you're dependent on Oracle, or any company, for your core apps or whatever it may be, the fact that you were 90% dependent and now are 92% dependent--I'm not sure what that's changed strategically," Hurd said. "So I think it's an interesting philosophical argument, but it's not that practical. Second, nothing in these solutions is 'proprietary.'"

I asked Hurd about the conventional wisdom, oft repeated since he was named CEO of Hewlett-Packard in 2005, that he's a first-rate numbers, cost-cutting, and operations guy--great at whipping an organization into shape, but not a strategic visionary. While saying he's not bothered by that characterization, Hurd recalled that when he was running the fast-growing Teradata years ago and was then promoted to CEO of parent company NCR, he had been labeled the growth guy--great at setting a strategy for a hard-charging midsize company, but not someone who could impose operational excellence onto a much larger company. So be it.

Rob Preston,
VP and Editor in Chief, InformationWeek
[email protected]

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About the Author(s)

Rob Preston

VP & Editor in Chief, InformationWeek

Rob Preston currently serves as VP and editor in chief of InformationWeek, where he oversees the editorial content and direction of its various website, digital magazine, Webcast, live and virtual event, and other products. Rob has 25 years of experience in high-tech publishing and media, during which time he has been a senior-level editor at CommunicationsWeek, CommunicationsWeek International, InternetWeek, and Network Computing. Rob has a B.A. in journalism from St. Bonaventure University and an M.A. in economics from Binghamton University.

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