Sunday, 24 October 2010

The Greater Evil


In an obvious reference to justifying an open alliance with Iosif Stalin, Sir Winston Churchill dared to publicly state that “If Hitler invaded hell I would make at least a favorable reference to the devil in the House of Commons”.

Quite a bold statement, indeed, for it was pretty much inconceivable at that time that the British people would find themselves friends with the arch-enemy, Bolshevik Soviet Union.

If we review Winston Churchill’s memories, we can even find traces of personal friendship (at least to Sir Winston’s perception) at the same level of the one the author declares for Franklin D. Roosevelt.

Of course, the situation in Europe and the rest of the world at that time more than justified such strange friendship, beyond a simple political and military alliance, and what Sir Winston really meant was that if Stalin was bad, Hitler and Nazism was even worse. He was choosing to oppose the Greater Evil.

However, we are not so unfamiliar to seeing weird friendships every now and them in areas such as war or politics, aren’t we? And, should we accept the thesis that business is not much different of war and politics, we should be used to seeing strange partnerships at different levels in this environment too. Like the case of the HP merger with Compaq, or the sudden reconcilement of Dell and EMC.

Furthermore, sometimes strange friendships in business go beyond mergers or alliances and reach individuals. The most recent case we have learned about has to do with Mark Hurd’s hiring by Oracle.

One of the most frequent reasons quoted to justify or explain Hurd’s acceptance of a job below the ranking of a CEO was that Oracle CEO Larry Ellison and Mark are friends, buddies, pals and other synonyms, besides the fact of playing tennis together every now and then.

Leaving aside that tennis matches by these two individuals would probably be similar to watching a Jane Fonda’s remake of one of her honeymoons (Ellison being 66 and Hurd being 53 is no sophomore match despite how gallant their sports style was thirty years ago), their so-called friendship still has a lot to go through to be understood or simply trusted. 

After all, Hurd was still leading the HP armies when Larry Ellison started a de-facto war by stepping into the hardware business after having purchased Sun Microsystems. A Sun in the Twilight was no match to Hurd’s hordes, of course, but backed by the power of the Oracle, it could quickly turn into a serious threat.

In such situation, it could not possibly be a part of the Oracles’ wildest dreams to get Hurd on board…but then mysterious Fate in the form of a non-sophomoric (Jodie Fisher is 50) scandal struck the industry, forced Hurd’s way out of HP, and opened the opportunity for the Oracle, who simply ignored everything after Hurd’s ouster and quickly got him into the ranks.

Hurd did probably not hesitate much, and soon was presented as co-President of the Oracle, reporting to Larry Ellison, in hail and praise. He succeeded Charles Phillips, who, by the way, was not precisely candidate to sainthood himself.

From bitter foes to intimate friends in a matter of days? Difficult to believe, despite whatever business HP and the Oracle might have done in the past, and despite how many “alliances” they formed.

Was not Ellison “making at least a favorable reference to Hurd in front of his own particular House of Commons”? We believe he did. And then, naturally, the next question is sort of obvious: Who is then the Greater Evil? Well, we think that Ellison is so proud of himself that he could eventually believe himself a sort of Hercules fighting against an Hydra or IBMs, SAPs, HPs and a portion of the rest of the Universe.

Going forward, we as well see deeper parallelism with Sir Winston’s case, if we look to the personal level of this weird friendship. As in the Churchill-Stalin case, there is probably a love-hate and fear-attraction mutual feeling between the two. In our opinion, Hurd wants to become CEO again, and should Oracle get to the dominant position Ellison wants it to be, hitting the CEO job by then would be a more than acceptable settlement for him to cool down his testosterone…

On the other hand, Ellison would crave the execution ability that Hurd demonstrated at HP, and keeping Safra Katz as the gatekeeper, just in case, at least while Hurd proved he would not screw up again, and returned part of his cost in results for the Oracle.

Forced equilibrium in any case between these two heavy weights (and heavy egos) that we do not really believe will last for ever and will potentially end up in a burst similar to the breaking of Stalin and the Western Powers at the dawn of the Cold War.

Both of them, Ellison and Hurd, will have to pay a price for it should it happen… Being the 6th richest man in the world would allow Ellison to afford it. In the case of Hurd, lets hope this time he goes for more mature toys, and does not pay the Fisher-Price.

God save the King


Sailing has been the traditional way of transportation by sea for ages. From small fishing boats to heavy galleons, all countries and all cultures have used it throughout History.

By the end of 19th Century, traditional sailing vessels gave way to steamers, and nowadays we even use nuclear power to propel ships, and classical sails have almost disappeared from our seas and oceans.

Replacing sails with steam engines was more than a mere change of technology. Sails and taking advantage of winds was a technology specifically designed for getting people and cargo over the waters to different destinations. Other than that, there was hardly any other use of wind or sails specifically for transportation (windmills do use wind and sails, but certainly not for transportation).

On the contrary, steam engines where not originally intended for ships or boats. The original target was being able to transform energy coming from burning coal into mechanical energy that could be used in many different ways. One of them was, actually, moving propellers in a boat, but as well it could be used to move a cart and, thus, opening room for the inventions of the train and cars, for example.

By the end of 2010, another technology has apparently been declared officially dead. Sony has recently announced the end of their manufacturing of good-old Walkman devices based on cassette tapes.

Far from being a mere change of technology, it’s apparent heir, the iPod, has been a complete revolution. From electromagnetic tape with a mechanical basis specifically designed for audio, we now have silicon-based chips to reproduce all sorts of multimedia content in an interconnected environment. The technology underneath an iPod was not either designed specifically for audio, no matter audio is just one of its applications.

Therefore, we believe iPod is not just the heir of Walkman. Discman was the heir of the declining product line. iPod is a complete change of dynasty. Not only has occupied the natural market space of Walkman; it has broadened it and its potential is such that many more competitors to iPod have appeared than Walkman ever had.

And nothing of this happened by chance… It takes much more than pure chance to replace a dynasty: Incoming Kings of the new one need to will it, plan it, execute it.

The King is dead; God save the King!