Wednesday, 24 November 2010

Beside America’s Cup


The jury has spoken, and they have decided SAP is almost as guilty as the oracle anticipated. The bill? $1.3 billion, close enough to the oracle’s demands, which rose to at least $1.6 billion, to quote Safra Catz, co-President at the oracle.

Precisely Safra Catz is probably one of the happiest persons in the industry, as she has been the key exec from the oracle, even beyond the Pontifex Maximus. Her two examples did make the magic on the jury, comparing the case to stealing a $2,000 watch and selling it for just $20, and the analogy based on Warner Bros copying illegally Disney’s movies. Clear examples, though arguable in our opinion,

We honestly thought the jury would take longer to decide, and its verdict would be closer to SAP’s position than to the oracle’s. We thought Big Mouth’s boasting all over, plus a real understanding of the oracle’s argumentation would have made the jury think that way.

Thinking a bit about the case, we think we missed some very important matters, the first one being that the jury is made of average common people, away from technicalities. Example’s like Catz’ have really been worth telling.

The second one is more related to the oracle’s ability to use the case for setting example of what happens when property, intellectual or physical, is stolen. Americans, by tradition, history and character, are extremely sensitive to private property. And this sort of result is what happens to thieves in America, the jury has said.

The third one is linked to the oracle’s ability to place SAP as a careful thief who was knowing exactly what they were doing, and kept on until they were caught. From the very beginning, the message from the oracle (supported by early declarations from the Pontifex Maximus) was pointing SAP as criminals against property.

The fourth one has been smartly played by the oracle too. They could not get hold of Leo Apotheker, and his absence might have been taken by the jury as cowardice, or his intention to hide something. We always thought he should have served as witness, but the possible damage for not having been there might have been too much.

Certainly exemplary, the case has anyway set a record in this kind of cases… Another trophy to stand beside the America’s Cup for the Pontifex.  


Save your fireworks for the moment


After Hewlett-Packard posted its latest quarterly results and outlined next fiscal year expectations, there has been a general perception of HP willing to provide a “Thanksgiving gift” to its employees or issuing pay raises, and similar views.

Though arguably technically correct expressions, we do not really think Hewlett-Packard could consider this a gift or a pay raise.

Firstly, what Hewlett-Packard is going to do with salaries is just setting them back to the levels of early 2009, before Mark Hurd decided to slash them under the financial circumstances of that moment. This does not really seem and increase at all. Conceptually speaking, Hewlett-Packard was requesting support from its employees at that time, and putting salaries now right were they where is just returning the favor.

Secondly, it was only a portion of employees who were impacted by salary reductions in 2009. It’s only them who are going to have their wages repositioned. This is, obviously, not a pay raise.

Thirdly, HP will grant better funding for US employees social plans 401(K). True that HP is an American company… as true is that it has a lot of employees who are not working in the US nor for the US branches of Hewlett-Packard. Is this a general benefit for HP employees? We are afraid this goes only to employees based in the US.

Of course, we recognize a positive tone under after these news. But if we were an average HP employee, we would be cautious. These measures are not something to throw fireworks. In fact, as we said earlier in November, this somehow the least Hewlett-Packard should do for its employees, especially after the difficult times of 2009 are over. At least, according to Hewlett-Packard’s own results.

We still see two benefits for Hewlett-Packard after these measures:

On one hand, as Léo Apotheker was not at all responsible for those pay cuts in 2009, he will benefit from employees appreciation. He could have simply ignored the need to act as he has, demanding more time to think about it, as he has said when being asked for more details on his plans for the future. Even in the case he had done so, nobody would have been able to blame him for the pay cuts.

On the other, there might be some gains in the appreciation employees have for the company they work for. A more positive attitude from them would certainly turn into better performance, one way or another.

Overall, tone is OK… but we would recommend some skepticism for the time being. It probably is a bit too early, to quote Léo Apotheker himself.