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Pundits weigh in on HP/Oracle saga

by Shaun Nichols

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09 Sep 2010

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Mark Hurd

Oracle and HP do not expect to see major changes on the product or services fronts in the near future, despite their high-profile war of words over the actions of executive Mark Hurd.

Industry analysts believe that, even with a shake-up at the executive level, both companies will stick to their current plans.

Hurd, who left HP last month amid a sexual harassment scandal, was recently named as a co-president of Oracle.

HP expressed concerns about losing trade secrets, and filed suit against Hurd, prompting Oracle chief executive Larry Ellison to issue a warning that the HP board is "making it virtually impossible for Oracle and HP to continue to co-operate and work together in the IT marketplace".

Ken Chin, a research vice president for information infrastructure at Gartner, told V3.co.uk that, despite Ellison's harsh words, the move is likely to have little impact on HP's or Oracle's fortunes in the near future.

"Whether Mark Hurd gets hired or not, we don't expect any significant changes because he'll be taking on the co-president role," he said. "He and [Oracle co-president] Safra Catz will be running the show."

Chin did suggest, however, that Hurd may have a long-term impact in areas such as hardware.

Hurd will replace Charles Phillips, an executive who is no stranger to scandal. Pund-IT principal analyst Charles King said that the move had less to do with Phillips's personal problems as Oracle's rocky merger with Sun Microsystems.

"The likely impetus for Philips's departure is Sun, which has been a more problematic acquisition than Oracle may have assumed or hoped," said King.

"While the company has been publicly, even wildly, optimistic about the deal from the very start, the Sun integration is showing signs of stress."

The analyst suggested that Hurd could be of great value to Oracle in smoothing out its business plan and fleshing out new areas of expansion.

"These are areas where Oracle needs serious help, both with the continuing Sun integration and its own shift towards delivering deeper sets of enterprise hardware products," King said.

"While Oracle has been particularly vocal about its Exadata and other emerging workload-optimise systems, those solutions currently constitute a fraction of Sun's total hardware sales.

"This makes the company's strategy resemble an auto dealer who trumpets the value of next year's models while ignoring the cars gathering dust on the lot."

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