Losers needed

 

Everybody likes a winner. In America, for example, “loser” is often used as an insult…

As well, and probably for the same reasons, everybody likes winning.

The problem with winners, however, is that to have a winner, you need losers. Winning is a relative situation. No losers mean no winners. When you win, you win against someone. Victory goes always at somebody else’s expense.

We have been wondering for a while about what is going between Oracle and HP. After the latest “victory” Oracle enjoyed, the well known trial against SAP for copyright infringement, which in fact involved indirectly HP through its current CEO Léo Apotheker, we have read about new aggressive arguments from Oracle’s Big Mouth Larry, aka the Pontifex Maximus at the oracle, targeting HP.

These last comments from the Pontifex indeed sound to us like a formal war declaration that finally comes up, after the de-facto war status so far, at least from the oracle’s side. Since the acquisition of Sun Microsystems by the latter, the once good partnership between Oracle and HP has degraded into a bitter relationship between the two companies that could mean in a closer relationship between HP and SAP, for example. SAP might really be all for it. As a matter of fact, we do believe this would be a logic step to take, and would certainly put a strong opponent in front of the Pontifex.

The Pontifex Maximus at the oracle, however, has a strong reputation after his manners, boastings and eventual bluffing. Not precisely an example of a New England British-like traditional gentleman, though effective and results-oriented. In fact, he is the real foundation of his company’s success. Personally, as well, he has fared pretty well, being considered the sixth richest man on earth. And the question remains open: Why HP in particular? What has this Pontifex Maximus against HP?

We do not have the full record of Oracle’s history, nor any insider information source. We don’t from HP either. But still, from the public information we might have had access to, we think we have an idea of what might be the reason.

Big Mouth Larry is probably no exception from the opening statements in this post. He loves winners, and he loves winning. Therefore, he sees any activity he steps into, anything he does, as a competition, as a battle, as a contest… that he ultimately has to win. To prove himself and the rest of the world he is a winner, and the world should love and admire him the same way he adores and admires himself.

Running his company is for him nothing different from any other kind of competition, and he takes it as something where he must win. He would not stand himself if he wouldn’t. Recall the way his PR is managing the fact that a cluster made of Sun Micro servers is the fastest one managing databases: They talk about this the same way they talk of the Oracle boat winning the America’s Cup.

And there is where the matter lies. To become a winner requires him to find a loser, Otherwise, there is no winner. So considering his options, there seem to be three possible opponents: Cisco, IBM, and HP. Cisco being the weakest, in reality it’s already behind Oracle.

Both IBM and HP are phenomenal references. IBM being the master company in the IT industry, a reference for decades, and HP being the largest IT company by revenue. But from the two, HP is weaker, compared to IBM, and certainly within range for Oracle’s artillery.

In other words, HP is a “beatable” foe in the eyes of Oracle, weak enough in certain areas, like software, and big enough for any victory on them to be regarded as brilliant. Beating HP would be a triumph the industry would recognize.

IBM would still be out of reach for Oracle. At least, farther than HP. And despite the Pontifex’ ultimate wish to beat them too, the guy is probably still intelligent enough to declare he does not intend to “tease them too much”. We do not think Oracle is not going after IBM because Big Mouth Larry likes IBM; we think he realizes he would probably not succeed if he tried, and wants not to appear as a loser should anybody think he wanted to fight IBM.

So the Pontifex is looking for losers to beat so he can feel recognition for his victories, so he can feel a winner. And HP’s problem with that is just being in range. That is, in our opinion, the underlying cause in the Pontifex’ fixation with HP. The risk now for the Pontifex, however is not really being able to make it. Having the speed record of database processing does not necessarily mean winning anything.

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Testosterone and medicine

 

It has been repeated in many different media that Larry Ellison (66), Pontifex Maximus at The Oracle finds IBM as its ultimate foe, or, more politically correct, its number one competitor.

That very same Pontifex Maximus, in a questionable move, recently hired a certain Mark Hurd (53), former CEO at HP, to join its board of directors, and serve as President for Sales and Marketing.

Hurd’s hiring started a controversial action from its former employer that involved a lawsuit filed against him on the grounds of potential disclosure of HP’s confidential information, which was finally settled for a bunch of dollars in stock, in our opinion. In the meantime, Larry Ellison, contrary to what could have been expected from his reputation, kept what could be thought of as a prudent silence, yet quite eloquent for our taste.

This last move was made at the expense of Charles Phillips (50), who has to leave his comfortable armchair to Ellison’s tennis buddy.

Charles Phillips, as we have mentioned in an earlier post to this blog, showed some habits that made Mr Hurd a natural replacement for him, by the way…

Funny enough, the now well known emulator of Tiger Woods has been appointed CEO at Infor, Not as important as the Oracle, still relevant in direct competition to Larry’s company.

Well, curiously enough, guess which are Infor’s strategic partners… Do you find the explicit references to something big and blue?

We have no idea of the details in Charles Phillips severance package from the Oracle, if any, nor we know anything about potential lawsuits against him from The Oracle in the name of Ethics or anything like that. We do not know if the Pontifex Maximus will be able to hold his mouth and prevents his tongue to be unleashed. We do not know either if Phillips plays tennis with Infor execs… But you would need to agree with me that the story is too good to keep it unwritten.

While the Pontifex Maximus tastes his own medicine, we will wonder what happens to men when they reach their fifties… is it a sudden unbalance in their testosterone index what happens at that age?

And, frankly, to those who still believe in Father Christmas and the ability of powerful public people to keep private life separate from professional life, now do you feel comfortable about having Charles Phillips advising President Obama about economic recovery? (Please note who sponsors the news)

 

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.