Silicon Valley Crackup: Oracle & HP Killing 25-Year Alliance? - InformationWeek

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Government // Enterprise Architecture
09:39 PM
Bob Evans
Bob Evans

Silicon Valley Crackup: Oracle & HP Killing 25-Year Alliance?

After nearly three decades of close collaboration, the HP-Oracle alliance is disintegrating in the wake of severe friction between top-level executives at each company.

"For over 25 years, HP and Oracle have been providing customers with complementary expertise to help them address their pressing business challenges. With over 140,000 combined customers and 13 worldwide technology and competency centers to demonstrate solutions, we continue to enhance our joint offerings and bring tangible benefits to customers. Whether it's reducing the total cost of ownership, simplifying IT management, reducing the cost of change or implementing solutions that help provide a competitive advantage, our commitment to customers continues to grow."

(And here's the inoperative link I mentioned at the beginning of this column.)

Hurd's move to Oracle in early September certainly chafed some folks at HP pretty severely—in fact, HP sued Hurd to prevent him from taking the position as Oracle president—but within a couple of weeks, just before the start of Oracle Open World, the companies resolved their disagreements over Hurd's joining Oracle and professed renewed commitment:

"HP and Oracle Corp. today reaffirmed their long-standing strategic partnership and the resolution of litigation regarding Mark V. Hurd's employment at Oracle," HP said in a statement. "While the terms of the settlement are confidential, Mr. Hurd will adhere to his obligations to protect HP's confidential information while fulfilling his responsibilities at Oracle. The agreement also reaffirms HP and Oracle's commitment to delivering the best products and solutions to their more than 140,000 shared customers."

The HP statement then quoted interim CEO Cathie Lesjak as saying the companies "are committed to working together to provide exceptional products and services," and quoted Oracle CEO Larry Ellison as saying they will "continue to build and expand a partnership that has already lasted for over 25 years."

But that rapprochement was apparently shattered just 10 days later when, right after Open World, HP named Apotheker as CEO, an appointment that caused Ellison to begin a relentless war of words against Apotheker individually and then against HP as a viable supplier of high-end hardware.

Ellison lashed out at Apotheker, initially calling him a "failure" at SAP (Apotheker was forced out about 8 months after being named sole CEO) and then escalating that verbal onslaught by charging that Apotheker engaged in "industrial espionage and intellectual property theft" of Oracle software during his time as SAP CEO.

But not long after the end of that trial, in which SAP was ordered to pay Oracle $1.3 billion, Ellison shifted his target from Apotheker to HP itself and, specifically, his perception of its severe shortcomings in high-end systems.

In a column called Global CIO: Larry Ellison Vows To 'Go After' HP; Is Alliance Dead?, I shared this public comment from Ellison about HP made during Oracle's introduction of its new Sparc Supercluster system:

"We're one big cheetah, and IBM's a stallion . . . and HP's a Turtledome," said Ellison with a huge laugh. And then he made his and Oracle's intentions toward HP unmistakably clear:

"Make no misunderstanding—there should be no misunderstanding—we think the HP machines are vulnerable, we think they're slow, we think they're expensive, we think they're vulnerable in the marketplace, and we're gonna go after them," Ellison said (emphasis added).

At some point, no matter how deep the commitment from front-line folks like HP VP Crowsen and his team and their counterparts over at Oracle, the corrosive effect of that kind of talk from the CEO of one of the partners about the other will reach a point where the damage is irreparable.

And HP and Oracle have reached the point where, whatever the formal or legal status of their alliance might be, they have made the transition from one of deep collaboration to one of bitter competition.

P.S.—For anyone interested in checking some of the specific comments made by Ellison and others during the five months that the HP-Oracle Alliance has come apart, here's a chronology, followed by our "Recommended Reading" list for more extensive analyses of the HP-Oracle situation:

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