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Summary:

Oracle and HP used to coexist quite well — People forget that the first Oracle Exadata ran on HP hardware. Then Oracle bought Sun and things went downhill fast. Public spats played out in CEO letters to The New York Times, and now court documents.

LarryEllison feature

For many years, Oracle and HP co-existed quite happily. They collaborated on the first Exadata in 2008, for example. Former HP CEOs Carly Fiorina, then Mark Hurd, keynoted at Oracle OpenWorld. HP appeared to have supplanted Sun Microsystems as Oracle’s hardware BFF for a while. Everything was copacetic.

Now the two companies are arch-rivals and are engaged in an increasingly bitter, seemingly personal battle, the latest skirmish of which saw a California Superior Court judge throw out a fraud claim Oracle lodged against HP. He also opened up court documents that don’t show either company in a particularly good light.

How did it all go so bad?

First, Oracle bought Sun for $7.4 billion in a deal completed in January 2010. That meant Oracle, for the first time was in the hardware business and its servers would compete with HP servers. That sealed the fate of the relationship going forward.

The public bad feeling erupted in August 2010 when HP canned Hurd as CEO, then hired former Oracle president Ray Lane (pictured above right) as chairman and Leo Apotheker, former CEO of SAP, as CEO. SAP is a huge rival to Oracle in enterprise apps and Lane left Oracle after a bumping heads with Oracle chairman Larry Ellison (pictured at right.) Things have just deteriorated ever since.

Here are some highlights (low lights) of the slap fight.

In a letter to the New York Times in August 2010, Ellison took aim at HP’s firing of Hurd:

The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago … That decision nearly destroyed Apple and would have if Steve hadn’t come back and saved them.

HP’s server and storage chief Dave Donatelli blasted Oracle for discontinuing Itanium development at the HP partner conference in March 2010. Donatelli asked the couple thousand HP resellers in attendance to lobby Oracle to reverse it’s Itanium decision.
This is a shameless attempt to force customers to spend a lot of money to move to a platform over time that gives customers no benefits  … Oracle made this decision to slow Sun SPARC market losses.

Ray Lane calls out Hurd in his letter to The New York Times in October, 2010.

The bottom line is: Mr. Hurd violated the trust of the Board by repeatedly lying to them in the course of an investigation into his conduct. He violated numerous elements of HP’s Standards of Business Conduct and he demonstrated a serious lack of integrity and judgment

After Apotheker announced HP plans to buy Autonomy — another enterprise software company — for $11.7 billion in August, Oracle couldn’t contain itself.

In a statement on September 28, 2011, Oracle said Autonomy had shopped itself to Oracle first and Oracle turned it down. When Autonomy CEO Mike Lynch denied that, Oracle said: “Either Mr. Lynch has a very poor memory or he’s lying.”

When there was further denial, Oracle put out another statement entitled “Another whopper from Autonomy CEO Mike Lynch” and helpfully published the PowerPoint slides it said he and banker Frank Quattrone brought to the meeting.  The presentation is here and here.

According to the statement:

Ably assisting Mike Lynch’s attempt to sell Autonomy to Oracle was Silicon Valley’s most famous shopper/seller of companies, the legendary investment banker Frank Quattrone.  After the sales pitch was over, Oracle refused to make an offer because Autonomy’s current market value of $6 billion was way too high.

The next chapter in this saga may be a trial on HP’s remaining claims against Oracle which should kick off in April, but stay tuned: anything can happen and usually does.

  1. > Now the two companies are arch-rivals and are engaged in an increasingly bitter, seemingly personal battle,

    Who cares about these arrogant inflated egos ( Ellison ) + ones with bad judgement ( Mark Hurd now Pres of Oracle). Regarding HP their CEO’s including Hurd ( Lew Platt was last great one who retired at CEO in 1999 ) exec mgmt, and esp. board of directors has been mostly crap for past 13 yrs

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  2. Oracle’s fraud claims date back to 2008. Is anyone awake? Hurd was CEO at the time. This is a LarryLawSuit(tm) against Hurd effectively.

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  3. Gary Ambrosino Friday, February 3, 2012

    It’s an interesting saga. But it seems to be the fundamental thing is that Oracle entered the hardware business and now they are competitors doing what competitors (unfortunately sometimes) do in today’s climate – – hack away at each other instead of selling harder.

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    1. yup, it’s all about these guys moving into each other’s backyard.

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