Really!?

 

In the 17th Century, Sir Isaac Newton laid the foundations of Universal Gravitation in his Philosophiae Naturalis Principia Mathematica. Tradition tells us that he realized evidence after having been hit by a falling apple (precisely) while he was sitting beneath a tree. The obvious thing, Universal Gravitation, took millennia from mankind to be understood.

Archimedes of Syracuse, sometime in the third Century before Christ, suddenly realized the principles of buoyancy while having a bath. He had been for a long time trying to figure out how to calculate how much pure gold was contained in a crown, without melting it. And suddenly, inspiration hit him, and something evident was fully understood.

Copernicus as well realized the evidence of heliocentric cosmology in the 16th Century… and so we may find dozens of examples of obvious things realized after years or centuries of study.

All these guys would have been awarded Nobel Prizes should these have existed when they were alive.

Today we have discovered a new potential candidate for Nobel Prize awards in the figure of SAP co-CEO McDermott, who offers his company for alliance with HP.

Leaving aside his obvious comments, it’s the reading between the lines that catches our attention, as we see there a certain willingness to achieve that alliance. What certainly means there is some sort of motivation, and some benefit.

Probably still hurt by the not so old trial about Intellectual Property (IP) that ended in the biggest defeat in the industry, according to the result, SAP is still trying to inflict some kind of damage to its arch-enemy Oracle while granting some kind of “protection” for the future.

 

 

 

 

Facts:

Léo Apotheker served as CEO for SAP. Today, he still is CEO at HP.

SAP execs have moved to HP since Léo Apotheker, aka Faust 2.0, was hired as CEO at HP:

- Marge Breya, new General Manager for Software and Solutions at HP.

- Martin Homlish, new Chief Marketing Officer at HP.

- Bill Wohl, new Chief Communications Officer at HP.

Oracle owns Sun Microsystems, direct rival of HP.

Oracle is in quarrels both with HP and SAP.

Oracle hurt HP by hiring former HP CEO Mark Hurd after his scandalous exit from HP.

HP recently gave up Oracle’s Siebel CRM to move on to Salesforce.com’s CRM.

HP’s tradition to hire top execs from other companies and ending up acquiring, merging or absorbing them. Was not a certain Todd Bradley former CEO at Palm, now the jewel of the crown at HP wth all the WebOS buzz? (by the way… where have the HP pre-Palm smartphones gone?).

Some months ago, when SAP was fighting at court with Oracle, SAP’s market cap was at about $50B, HP was beyond $100B, and HP had plenty of cash to be in an even stronger position to force a take over. Today market caps of both companies are at parity… which may ease a “natural merger”…

We spoke about this, which seemed obvious, even when McDermott’s speech was totally different from what we read these days…

Technorati Tags: hp,hewlett-packard,apotheker,leo apotheker,oracle ceo,sap,bill mcdermott,bill wohl,martin homlish

Technorati Tags: marge breya,mark hurd,salesforce.com,siebel,crm,todd bradley,palm,webos,smartphones

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.

 

 

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Staying in Moscow

 

When Germany invaded the Soviet Union in 1941 the world held its breath. Millions of German soldiers crossed the border, and once again smashed whatever troops the enemy put up against them in a major demonstration of the new way of leading war. Blitzkrieg, they called it.

Soviet units fell one by one anywhere the Germans appeared. Encircled by the dozens, the Soviet divisions surrendered and marched to the POW (Prisoner of War) camps in the German rear, or were killed on the spot. The biggest Army by manpower, the red units lost men by the millions.

The Soviet High Command was a complete disaster. No coherent defensive strategy was in place. And worst of all, Stalin virtually disappeared. It seemed he did not want to face reality, the brutal German invasion. Lacking leadership, Soviet cities fell to the Germans, dashing like lightning towards Moscow.

Soon enough, the Soviet government withdrew eastward, beyond the Urals mountain range, in order to reset itself and try to resist somehow the monstrous German tide. All the cabinet fled. All but Stalin.

When Moscow was nearing the German assault, Stalin finally appeared, almost at the very last moment. He delivered to the people one of his propaganda masterpieces, setting the guidelines for Soviet resistance. He was there, he appeared in the very last moment, proved he had not given up, and Moscow did not fall. Probably the Soviet peoples will to resist and ultimately destroy Germany started there and then.

Quarterly financial numbers have a reasonably good expectation for HP. However, from a share perspective, the HP armies are still being beaten by the major cataclysm of Mark Hurd leaving the CEO job in early August.

While struggling in this entourage, HP’s strategy seems to be the very same one Hurd designed and left for his successor to inherit. And Wall Street is not buying it. The biggest army by revenue, its strategy to recover capitalization value was not there.

And its master leader, its CEO, has not publicly shown up three weeks after his official start date…

If History repeats itself, Léo Apotheker should pop up soon, and as the Soviet people did, the market will certainly need a propaganda masterpiece to spark recovery and confidence in putting HP where it should be from that very moment.

Show up before Moscow falls, Léo. The subpoena matter at the SAP trial is a smoke curtain. You can, you should, you ought to. 

 

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Swift cats

 

Indeed the “trial of the month” moves forward towards its closure. Peculiar trial, dressed with a lot of surrounding attrezzo, from the Pontifex Maximus at the Oracle’s (aka Big Mouth Larry) venomous invectives to all the assumptions made here and there of where all this will end.

There has certainly been a big unbalance between the relative importance of the heavy-weight witnesses presented by the two parts. From the Pontifex himself and co-President Katz from the Oracle to Bill McDermott and Werner Brandt for the Germans, the overall declarations have as well fallen short to expectations, and basically around their original positions: up to $4 billion according to the oracle, not more than $40 million offered by the Germans. And none of the parts have given in more than an inch from those positions.

One of the strongest witnesses from the oracle, however, has been co-President Katz, whose main argument was about rewarding bad behaviour of the Germans. Ironically enough, “Katz” is a German name derived form Katze, meaning cat…

“It’s like stealing a $2,000 watch, selling it for $20, and offering to pay the $20 back as compensation”, she’s declared.

The argument is indeed difficult to respond appropriately after a first thought. It might have made a strong impression in the jurors on behalf of the oracle. as a good finance expert, she has even mentioned figures in her example that are exactly proportional to the figures discussed in the trial. 2,000 is 100 times 20, ad $40 billion is exactly 100 times $40 million. Very, very, very smart from hers.

However, there is a subtle nuance that jurors and judge Phyllis Hamilton should take into account. If someone steals your $2,000 watch, indeed he is stripping you off $2,000. Downloading copyrighted material is basically making a copy of that material. And copying it is not stripping you off the value of that material. So the point is basically that illegally copying copyrighted material, SAP used it for its own benefit without really preventing the oracle from using it on their own. In other words, it’s like an athlete unfairly competing in a running race by using illegal drops that reduce the competitive advantage of a better honest runner.

And this id probably why the actual damages (only 358 customers switched from the oracle to TomorrowNow, according to information available online) have been so small compared to the theoretical potential.

Not denying that SAP behaved bad, the already settled amount of $120 for criminal charges, plus damage reparations of $40 really sounds reasonable in our ears., though this is just an opinion of ours, who do not claim at all any expertise in law matters.

What we really are impressed with is Katz’s rationale and argumentation… together with a much more senior and mature attitude than her boss’. Indeed swift, indeed smart, indeed subtle, and probably very powerful. No surprise she sits where she does at the oracle.

Hard and tough rival in the internal struggle for the Pontifex heritage you got there, Mark Hurd…

 

Technorati Tags: leo apotheker,larry ellison,safra katz,bill mcdermott,sap trial,oracle,tomorrownow,hp,phyllis hamilton,copyright,infringement,management

A tantalised Pontifex

 

It looks that Big Mouth Larry is seriously taking the challenge we suggested him some days ago.

As a matter of fact, he’s paid for some private investigations to find out the pharmacist’s whereabouts. Well, this sort of game is supposed to be carried out individually. Come on, Big Mouth, it’s no fun if someone else tells you where Léo is and you do not find out yourself… unless you tell us that instead of tennis, you are playing this with your friend Mark. Oh, yes, Mark has some experience in private investigations indeed, doesn’t he?

Yet we are puzzled about the point he’d want to prove. Assuming for a minute he found out the guy is anywhere out of legal reach to force him to serve the subpoena at the trial the oracle is waging against SAP, if Law can not grab him, it is absolutely useless. Sounds a bit paranoid, in our opinion.

So Big Mouth Larry, aka The Pontifex Maximus at the oracle, would be punished for his paranoia by knowing where the guy is, but not really being able to grab him, like poor old Tantalus, condemned by the Gods to starve in Hades below a rich fruit tree that raised it’s branches as soon as Tantalus tried to grasp any throughout eternity… which, for us at least, seems to be a heck of a long time, incidentally.

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Sultans of suing

 

We are sure that if we mentioned Dire Straits, every body would recall its unique style, mainly driven by lead singer and composer, Mark Knopfler. Some people consider him the best guitar player ever, and his live performances all over the world are memorable. Sultans od Swing, Tunnel of Love, Telegraph Road, Gold…Many hits come to our minds, but from them all, it is the famous duet with Sting, Money for Nothing, what draws our attention more, together with Private Investigations.

Buzz around another Mark comes back. The Mark Hurd again has bounced up again in the press, as some additional documentation around the fishy Fisher has come to light. Beyond an inappropriate relationship between hard Hurd and fishy Fisher, it looks as if hard Hurd disclosed confidential information to the latter. So fishy Fisher seems to be getting a second 15 minutes of glory Andy Warhol said everybody deserved. However, being represented by the famous attorney Gloria Allred, it appears to us that fishy Fisher has had to devote many more than a mere 15 minutes to the “Gloria” to just get again 15 minutes of “glory”… Not sure this is a good ROI, frankly.

As it is already well known by those who have followed the case, hard Hurd settled private whatever issue fishy Fisher had with him. This happened before he was fired by the HP Board, and likely was one of the mean reasons precisely to lose trust in the guy, and ultimately show him the door. The private settlement included an undisclosed amount of dollars to be paid by hard Hurd to fishy Fisher, cost which simply adds up to all other costs hard Hurd has had (including the intangible impact on his family and reputation) for not having thought it twice before behaving like a hormonally unbalanced chimpanzee during mating seasons.

Although Big Mouth Larry quickly came to the rescue, and saved for him the match ball against hard Hurd, we would still question if all the cost he’s taken was really worth it. Is hard Hurd any better personally and professionally than he was at the time in which praise and success were a constant in his service record?

Again that “Money for Nothing” tune in our heads, as we recall part of its lyrics: “Money for nothing, and your chicks for free…” Indeed the private settlement was something hard Hurd was perfectly ready to afford, and certainly big money for fishy Fisher. Certainly “money for nothing” for hard Hurd, given the ROI he got, though this time the chick was not for free precisely, was she?

After all the “private investigations” after the affair, maybe Mark (Knopfler) could eventually consider legal action against Mark (hard Hurd) for copyright infringement by the latter. Private Investigations and Money for Nothing have been in billboards and hitlists for years already. Just to keep lawyers busy, you know, as suing is starting to become a tradition for hard Hurd, we’d say.

By the way, if Knopfler really gets to legal matter, he could as well include copyright infringement about Sultans of Swing. At the end of the day, hard Hurd is really becoming one of the Sultans of “Suing” lately. True or not?

Technorati Tags: HP Board,HP,HP Way,Mark Hurd,Jodie Fisher,Ray Lane,Larry Ellison,Oracle,Management,Dire Straits,Sting,lawsuit

Caesar’s wife

 

Before becoming Consul of Rome, Julius Caesar was appointed Pontifex Maximus. He was appointed head of state religion. At that time, he was married to Pompeia, granddaughter of former dictator Cornelius Sulla. Thus, Pompeia was the head of state religion too, at least in matters related to women, in those years. Pompeia was Caesar’s second wife.

Some time after Caesar’s appointment to the job, Pompeia, as his wife, hosted the Festival of the “Bona Dea” (“the Good Goddess""), only for women attendance, to which men were forbidden to participate.

One of the start up politicians of the time, Publius Clodius Pulcher, disguised himself as a woman and entered the venue, apparently with the intention of seducing Mrs Caesar.

Not really producing any evidence of any wrongdoing, the episode was seized by Julius to demand divorce from Pompeia under the argumentation that “my wife ought not even to be under suspicion”. The real reason behind this break up and divorce were much more political, as politics of the time was mainly driven by family relationships worked out by marriages. Caesar was already deep into politics by that time. Historians strongly suggest he already had his next marriage (ie political alliance) in mind in his quest for power.

We have read the recent article in Fortune which analyses more in depth the story behind Mark Hurd ’s departure from HP a few months ago. Quite detailed and thorough.

Detailed enough to imagine a nice story.

In a given point in time, after having divorced its previous companion, the HP Board married Mark Hurd as the new CEO. In a certain point in time, Mark decided to have Festivals with other top executives from potential customers. Of course, those festivals were very exclusive, discreet, and reserved for the attendance of VIPs only.

A relatively unknown would-be starlet, Jodie Fisher, was hired by HP so as to greet guests to those festivals, and eventually supervise Mark’s agenda, ensuring he spent enough quality time with each person in the festival. Necessarily she herself spent a lot of time with Mark, with or without witnesses.

Not really producing any evidence of any violation of HP’s harassment policy, the episode was seized by the board to demand divorce from Mark… pity the HP PR spokespeople failed to make the historical parallelism. It would have been fun.

Still, though HP was not totally clear about the story, probably in the hope of letting it pass as fast as possible, smart journalists like those at Fortune open the door to details. A mere matter of trust, we may conclude after reading his article. The HP Board lost trust in Mark, even beofre anybody else did, even with no proof nor evidence at that time.

We agree that for any company, its CEO “ought not even to be under suspicion”. They in fact are an asset of the company they work for, aren’t they?

There is still, however, an interesting open question after the story. As the Festival’s episode was an excuse for Caesar to divorce Pompeia, a necessary step in his political career and quest for power, were there any quests for power behind the ousting of Hurd? We have no idea, but it would be interesting, in our opinion, to investigate a bit the likely candidates to marry the HP Boards at the time, and like enchanted frogs or toads, transform themselves into princesses or princes.

Technorati Tags: Mark Hurd,Carly Fiorina,HP,HP Way,Ray Lane,HP CEO,Management

 

A question of honor

 

Despite the sound title for this post, unfortunately we are not talking here about the known song by Sarah Brightman, are we? Wonderful performance in Las Vegas a few years ago, highly recommended to those who might appreciate good music.

No show in Las Vegas, but a bit further westward, we are afraid… up to Oakland, as readers do probably expect.

Despite SAP accepting to pay for the attorney’s fees nothing less that $120 million, jurors still have to determine the cost of damages to be paid to the oracle. At the moment, the oracle is claiming about $2.3 billion.

Today we got former Oracle’s President Charles Phillips testifying. Two highlights from his words today.

First, we has declared that the oracle’s software licensing would have been charged to SAP for a fee ranging from $3 to $4 billion. Other sources up that figure to $5 billion, but we will stick to Reuters. Well, we are certainly no experts in software fees, but even in the case that TomorrowNow’s full plan to take customers from the oracle’s had completely succeeded, it seems quite an unreasonable figure. We are not sure at all that the oracle would have had equivalent revenue for all those customers. Still, Mr. Phillips played the role he was expected to as a former top executive at the oracle, and the figure was thrown in to justify the $2.3 billion claim, and even make it look reasonable in front of jurors.

Second, and most important in our opinion, we would like to highlight the actual words by our Testosterone Champion: "There's sort of an honor among warriors here that we can compete fiercely, but we don't take each other's software," Phillips said.

Oh, puh-leeeze...!!!!!!!

In a gentlemen’s atmosphere, Testosterone Champion’s (TC for short) words would have been very welcome, would not have drawn any attention, and would have been understood as utterly polite. But since the beginning of the friction between the two software titans, back in 2007, we would not precisely compare it to a gentlemen’s duel in the times of Louis XIV, would we? Big Mouth

Technorati Tags: Phyllis Hamilton,Leo Apotheker,Larry Ellison,Charles Phillips,Mark Hurd,HP CEO,SAP,Oracle,Tomorrownow,lawsuit,management,court,trial

Larry’s corroding and aggressive words, to begin with, followed by all the documents and evidence that has been published so far.

If we review TC’s  relatively recent past, it does not really look that the word “honor” is something he has not had to look up carefully before declaring anything today. More than 8 years in an extra-marital affair, and his move to IBM ally Infor (while all the buzz around Mark Hurd to the oracle’s and so forth) do not precisely prove he’s ever known what “honor” really means.

We do not take each other’s software, but we may take ourselves to hang around for years with women other than our own wife, or we eventually take Oracle’s confidential info and use it at Infor?

We do not really believe people are made of two personalities, one of which develops at work the other one at home. When we talk about individuals, we are basically talking of single entities that will basically behave the same way in either scenario. So if you betray your family, which should be sacred for you, are you telling me you will be able to keep loyal to a company that just pays you a salary, no matter how big, should the occasion arise? We are afraid we will not swallow that one, TC…

Maybe Apotheker was not the best choice for HP, and maybe Apotheker is not really the right witness to call, but TC is surely not the best example to preach “honor”, as Mark Hurd was not either a paradigm of the Standards of Business Conduct he preached for years at HP.

 

Questions? Ask Mark

 

The Chosen One has apparently declined to attend the oracle’s party… Too bad, we think.

People have a remarkable tendency to talk about famous individuals and celebrities, particularly if the gossip around is not related to an immaculate reputation. Mass media are made by people, and addressing people. They are not an exception. And if someone with the fame and reputation of Big Mouth Larry finger points someone in particular, that person is ultimately screwed.

HP is claiming that the Chosen One would be getting distracted from his new duties as CEO. Well, a guy born in Germany, educated in Israel, living in France, now moving to California, having been able to reach the CEO job at SAP, enjoying a team of executive assistants and backed by smart people leading the different businesses HP is made of, speaking five languages (one of them German, another one Hebrew, which is written “backwards”) can live with that for a few weeks, we think.

HP’s argument sounds weak. And a poor defense is sometimes equivalent to a strong offensive from the enemy. A weak defense is just providing ammunition to the Pontifex Maximus. Not showing up defaults to the Pontifex being right, and unwillingness to assume responsibilities after having left his former employer. We agree the Pontifex is not really proving elegant at all, and his style matches, in our opinion, much more the one you see in Gangs of New York than an educated discussion. But precisely for that, we would not advise to give a poor excuse to stay off.

If the Chosen One is innocent, he should actually leverage the opportunity to demonstrate his innocence, particularly in a case like this one, where Big Mouth Larry is providing a hell lot of free publicity.

Standing up as well can have the total opposite effect than the one insistently sought by the Pontifex Maximus: Strong leadership and principles. Something that, by the way, HP badly needs. If the Chosen One wants to show he cares for his new company, he should think of his reputation as an asset he is not the sole and single owner of. His reputation and his style is as well an asset of whatever company he works for in a given point in time.

Keeping the cleanest possible reputation is, therefore, something he accepted owing to his employer and his fellow employees since the moment he signed his contract and assumed responsibility. Step up, Léo. You are obliged to do so to yourself, your family, your business partners, your customers and, of course, the employees you lead. In case you had questions, Léo, you can always give Mark Hurd a call about the topic.

  

 

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Technorati Tags: apotheker,phyllis hamilton,lawsuit,trial,larry ellison,management,hp way,hp,oracle,ceo,sap,tomorrownow,copyright

Appeasement does not win wars

 

In 1938, Sir Neville Chamberlain, British Prime Minister, together with Edouard Daladier, French Premier, met with Adolf Hitler and Benito Mussolini in Munich, to discuss upon German demands prior to what later would become World War II. The agreement they came up with after a few days was reported by the British politician as “The Peace of Our Time”.

Basically, what the two Western representatives had done was giving in to every demand from the Germans. The main issue at the stake was the partition of Czechoslovakia, and, shamefully enough, the Czech representatives were not even allowed to participate in the meetings.

Sir Neville came back with a feeling of triumph that was as well backed by the majority of Great Britain. He was in fact welcome as almost a hero. The savior of peace.

you can read appeasement in his face…

Chamberlain’s future successor, Sir Winston Churchill, knew better. In a speech in the House of Commons, he regarded the agreement as a total defeat: “We have suffered a total and unmitigated defeat”, said he. He foresaw the consequences of the agreement. Most Historians actually cite the Munich Pact as the peak in the disastrous Appeasement Policy led by British and French governments. About one year after it had been signed, the world was at war.

Today it has been announced that SAP has agreed to pay for legal costs after the TomorrowNow trial. We talk of $120 million, which is not a small quantity just for legal expenses and fees. Consistent with SAP’s non-contest position, it could be imagined that SAP attorneys are trying to show goodwill after they admitted formally long ago they played inappropriate practices. As a side effect, they may be seeking to placate the beast they have in front of them, Big Mouth Larry, Pontifex Maximus from the oracle, and eventually get a better conclusion at the end of the trial.

Because it has to be well understood that these $120 million are just that: Legal costs. Nothing to do with the $2 billion the Pontifex demands upon business damages. That is precisely what the trial is about. And, at the moment, the Pontifex has not given in an inch in that demand, despite taking the $120 million, of course, like Germany did not change its plans after having got the Western approval for annexing the Sudetenland in 1938.

We will see on Friday, when the Pontifex is supposed to step in full majesty and glory into Court. Incidentally we should mention that he will as well have the advantage of having known about a theoretical deposition by Apotheker on previous Thursday. We are not sure about the benefits of not appearing personally.

We are not sure that SAP and Apotheker are 100% aware of what is going on. Appeasement might work when the ultimate objective of both parties is to prevent war, when war is more a threat than a really likely possibility. And as far as we know, we truly believe the oracle has set for aggressive war. Consciously giving in, as the Russians did in 1812 against Napoleon and 200 years later against the Germans, does only make sense if you simultaneously devastate the territory you give up. Certainly appeasement won’t help at all if your way of appeasement includes a $120 million cheque.

Appeasers do not win wars.

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The Chosen One is coming…

 

Well, well, well… The Chosen One will come, stand up and eventually fight.

Oh, yes… The One chosen by the Pontifex Maximus at the oracle, Big Mouth Larry, will finally step in and face the challenge from the Oracle.

Now, it is not yet known if The guy will appear personally, honoring the well known advertising campaign by HP, “Personal Again”, or if he will leverage new technologies and appear through video playback.

Accepting the challenge from the Pontifex Maximus is already a good step forward, and we sincerely hope he will appear personally. This would add to his credibility, and certainly impress jurors positively. As well, he would have the chance to answer any evidence against him the Pontifex has announced everywhere he has.

He has been personally attacked, and his appearance would give him an opportunity to turn the trial on his benefit.

Coming up in video screen, on the contrary, would give a poor impression, and would eventually look as if he just wanted to prove he is not a crook (with the permission of Richard Nixon) but ultimately refuses further defense. He would not be able to stand to any questioning, and the oracle’s lawyers would be in a strong position to eventually use the tape against him. They will, should they be given the slightest chance. Video would weaken his position, and strengthen the oracle’s claim for his cowardice. All the benefit of stepping up would be offset by the video.

We will see.

Still, Apotheker, the Pharmacist, the Potion-Maker, the Sorcerer whose reputation and credibility are at the stake, should have additional interest in going to Court. So far, it appears the SAP lawyers have not really made a good start, and like the other Sorcerer we all have seen in Fantasia (Disney), will have to clean up all the mess his theoretical defendants have made. These guys, full of good intentions like Apprentice Mickey Mouse, may have really lost control of the situation from the beginning, we are afraid.

 

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The Good Thief at Judgment Day

 

For those readers who have had traditional Christian education the character of Saint Dismas should not be unfamiliar. This Saint is as well known as The Good Thief. He was a thief who was crucified beside Christ, and before both of them died, he repented (last minute call indeed!) from his sins and previous life, and Jesus granted him a place in Heaven.

Despite having in front of them nothing less than Pontifex Maximus at the Oracle, playing the Good Thief does not seem the wisest strategy for the lawyers at SAP. At the moment, they have played quite a smart strategy, tying with the Oracle before the trial started, in our opinion, which could be considered a major achievement given they have admitted guilt about “inappropriate behavior” against the oracle.

As the trial is set to determine how much SAP should pay to Pontifex Maximus Big Mouth Larry, the fact that SAP started admitting $40 million in damages “because of their subsidiary’s ultimate failure to lure many customers from Oracle” is a piece of cake to the lethal lawyers that work for the oracle.

For God’s sake! Attempting to minimize damages by saying that as a thief you were doing a bad job does not minimize guilt at all. It basically means admitting that not only you have been a thief, but a stupid one. The potential damages, the intention after the theft, the plans remain the same. Only for this jurors should grant the oracle anything they ask for!. No wonder that in parallel as well SAP has offered another $120 million in concept of attorneys fees and costs. By the way, SAP is reported as having already accrued for as much as precisely $160 million for this trial. (Running out of batteries, SAP?)

Judgment Day has started… but let’s understand clearly that Judge Phyllis Hamilton is not God, and definitely it is not the moment to play the Good Thief role. (We may leave the Pontifex Maximus playing the role of Caiaphas, though, well escorted by Annas Hurd…)

Footnote: Hermione, this one’s for you too… you know why, don’t you?

Technorati Tags: Phyllis Hamilton,Larry Ellison,Mark Hurd,SAP,Leo apotheker,HP,trial,oracle,ray lane,tomorrownow,sap

Utterly unfair

 

People like money. People want money. In the name of money, crime has flourished here and there. So who would be surprised to read that people want “their” money back? This is applicable to HP employees, and to anybody else in the world, whether they are employees, self entrepreneurs of retirees.

It seems quite obvious a conclusion. Still, it deserves some comments, as the way this has been written looks a bit too simple a view.

We think they deserve it. We agree with the conclusions at the end of the article, but not for the same simplistic rationale. The reference article just says that since economical results for HP have recovered, salaries should be restored and that’s it.As well, the article generalizes too much.

If we look to the official memo to employees at HP, we see a couple of items that have not been explained much in detail in the online report:

First: Salary reductions were not applied to total earnings by employees with variable salary. Just to base pay. What means that the cut was smaller than it looked.

Second: As these cuts have to be compliant with local regulations should there be any, in many countries in the world these reductions are simply non-effective, as local legislation protects salaries in a way that they cannot be reduced even if the consent of the employee is granted.

We are not going to discuss that cutting salaries was not a technically correct measure. It was one of the valid choices HP had to address the economical situation of the time. Indeed it was. And, as long as it complied with local regulations, it was legal to use it.

Now, having said this, we will try to go beyond, and imagine the ultimate target. The guys deciding to take this option (reduce salaries) were guys whose total earning from HP mainly came not via their own base salaries, but proportional to the value of shares. So increasing the value of the shares was their primary target. Not, as presented to the employees, was it about competitiveness and so forth.

There is only one way to increase share value significantly in the short term: Increasing profits. To increase profits, there are only to ways to do it: Either increasing revenue beyond expectations keeping costs in check, or to reduce costs significantly. From these two possibilities, it is kind of obvious that the second one is the easiest.

We believe this was the ultimate intention of the board. Just make sure the market understood they were slashing costs, and therefore increase shares value. Nothing else.

We base our opinion on the wording of the communication to HP’s rank and file employees. Messy, at some point, and potentially unclear for the average employee, who has by no means the slightest individual influence in results, and gets the explanations under the apparent “share-of-the-pain” by managers, who pretend their salaries’ cuts are even bigger than theirs.

Average employees might get lost in all the technical explanations, but what they know is that their cost of living is not paid with percentages. The greengrocer’s, the butcher’s, utilities’, insurance, schooling for kids and a long list of daily expenses are not paid on percentages, but on counting dollars. And though a 20% cut on Top execs base salary may sound big, if (this is a big “if” indeed) shares value performance means a massive payment to them, the ultimate impact is ridiculous in top exec’s earnings. As documented before, a 20% cut in former HP CEO Hurd’s earnings in 2009 roughly meant $290,000 out of more than $42,000,000, what basically proves the point. Who would care for 20% of base salary, or even 100%, if shares value can mean 30 times as much?

Not elegant at all. It simply cannot be imagined that such execs dare that much to add insult to injury. At the end, it could be even thought that they are making their millions not at the expense of competition, or by fair play in the market. They were making their earnings out of employees that supposedly are always declared to be “the most important asset” in the company whatsoever. But nothing different should have been expected, we’d say if we review recent posts from ours too.

The good news for HP? Léo Apotheker could not have found a better opportunity in the beginning of his tenure to gain a solid support basis from his more than 300,000 troops.

The skeptical view? Léo Apotheker’s income is based on shares value as much as Hurd’s was. What basically means he could be driving HP the same way as Hurd did.

The bad news? If things went bad for HP, it would behave like any other company does when targets are not met: “The most valuable assets” are sold out.

Technorati Tags: leo apotheker,hp,hp way,mark hurd,management,employee

Mark Hurd’s blank cheque

 

We have already written about the fondness that the Pontifex Maximus at the oracle has of Chinese philosopher Sun-Tzu and his works “The Art of War”.

There is a wonderful episode describing the three maxims Sun applied for the new style of war at that time, almost 3,000 years ago.

Sun was looking for a job from the King of Wu, Ho-Lu, who requested Sun to demo his theories… using women for a change.

180 concubines were ordered into the room where the King and Sun were. Sun divided them in two groups, appointed the King’s two favorites as officers and explained all that about “left face”, “right face”, and so forth. He barked an order, and… nothing happened.

Calmly turning back to the sovereign, who was probably amused with the show, Sun said: “If instructions are not clear, it is the commander who is at fault”.

Sun explained the stuff all over again. And barked his orders for the second time. Once more, nothing happened.

Calmly turning back to the sovereign, who was starting to get a bit puzzled about what was going on, Sun sated: “If orders are clear, but not carried out, it is the officers fault.” And he ordered the concubine-officers’ heads off.

Then the King started protesting, to what Sun gave his third maxim: “A commander in the field is not always bound by his sovereign’s orders”. And the heads were effectively off.

Sun appointed then new officers, and this time the concubines formations worked like a Swiss watch.

Sun got the job…If we recall the last job given by the Pontifex Maximus at the oracle, Mark Hurd has probably got a sort of blank cheque. After all, he already proved at HP he knew how to tame flocks, herds or crowds, did he not?

Incidentally, for those who recall the oracle’s hardware proposition, we think that “Tzu” does not mean “Microsystems” in Chinese.

Technorati Tags: mark hurd,larry ellison,hewlett-packard,hp,oracle,management,sun microsystems,sun-tzu,the art of war

Play wise, play fast

Some time ago we suggested Léo to speed up in one of his most powerful, though still would-be, weapons.

Every day counts. The barrier the oracle was planning to put in front of Herr Apotheker with the upcoming trial on the TomorrowNow affair has been smartly, elegantly and swiftly overcome by SAP’s lawyers.

It looks that Léo left good friends at SAP… what, indirectly, can have a hidden meaning: Nothing less that a tighter liaison in the coming future between HP and SAP.

The Acid Edge already anticipated this possible move, when talking about “Stepping Ahead, Please” (did you notice the initials S-A-P at that time?).

We still think both actions should develop fast and sound: Hurrying with WebOS in one front, and engaging closer to SAP to counter the Oracle’s hostility. And we start to find some similar views around.

Math and numbers, however, set the odds against HP, at least in what relates to storage, which could be the third move. 3Par and Palm acquisitions do not seem to be profitable in any near future.

But more than the mere cold numbers, it is more about confidence what HP should deal with. The ultimate value of the company will rely more on the confidence and expectations it creates than the actual math in a given point in time.

If HP demonstrates strength quickly enough, shares will come up sooner than later:

First: By speeding up smartphones and tablets. That’s a matter of WebOS. The company is showing boldness there by hiring external proven expertise and reorganizing its Palm Division.

Second: By speeding up integration of 3Par and quickly delivering results. More than actual profitability, it needs to show solid trends.

Third: By closing ranks with SAP. A solid covenant to stand against the oracle. Depends much on SAP, but the two could make a formidable rival to the oracle, despite not having nice Armani suits nor having won America Cup.

Fourth: Playing the Russian military tactics…

You could have some aces in your sleeve, HP. Play wise, but play fast.

 

Oracle 1 – SAP 1

 

About 200 years ago, Napoleon Bonaparte invaded Russia in his attempt of world domination. A mighty army, La Grande Armée, the flagship of the French Grandeur, marched in.

Russians soldiers were no match. Should they have stood to the French, they would have been severely defeated, and Napoleon would have returned victoriously.

So the Russian commanders, in a brilliant move, applied the best strategy they could think of. Taking advantage of the huge and vast territory behind them, they retreated systematically, leaving unopposed fields and land to the French, but making sure first their foe would not find anything (supplies, food, shelter…) that could be of any use.

All the way to Moscow, Russia was devastated before the French advances. Even Moscow itself was set on fire.

Winter arrived, and the comfortable time they planned to spend in Moscow turned into the coldest and hardest winter ever.

Out of supplies that should have been obtained on their victorious march to the capital city, weather conditions and unpreparedness of the Grande Armée made the rest. Very few of those invincible soldiers made it back to France. Very, very few. Hardly 58,000 men out of 700,000.

Germany made a similar mistake in 1941.

The oracle’s well known for his admiration of Sun Tzu’s (The Art of War). But he might want to add some History to his strategy masterbook, and instead of going 3,000 years back in time, read something about Russian History in the last 200 years.

Like Napoleon in 1812, he is preparing himself to attack the Russian SAP, and while making the most of that (up to $2 bn, nothing less), collaterally damage other enemies, namely HP. And, like Napoleon, he’s being caught in the same no-show reply from his enemy.

SAP seems to have sized up the situation, and given they already admitted guilt in the TomorrowNow affair, they are not willing to be plundered and participate in the party that the oracle is trying to set up: “No, thank you!”, they have replied. And they (SAP) plan to shorten the trial as much as they can’t, by arguing there is no point beyond sizing up the amount they might have to pay the oracle.

The oracle has erupted in rage: As important for them as the money SAP would have to pay the oracle, the actual harassment to Léo Apotheker as former SAP CEO as much as incoming HP CEO was important to Big Mouth Larry. Big Mouth’s reaction proves it.

Sorry, kid. Despite historical examples that could not possibly appear in Sun Tzu’s, at the moment SAP’s given you the finger. No party, no fun. You are just going to get dollars, an nothing else. No party, no fun, no sacrificial victim to offer to your hordes of admirers.

The Oracle: 1 – SAP: 1

A tribute to the oracle (II)

 

Well, a reader/friend suggested additional music to add to the oracle’s playlist...

Yachts, fancy parties, illegal liaisons, private jets… and underworld spies. About perfect!

not that Carly either, kid…

just in case, here you got the lyrics…

You walked into the party like you were walking onto a yacht
Your hat strategically dipped below one eye
Your scarf it was apricot
You had one eye in the mirror as you watched yourself gavotte
And all the girls dreamed that they'd be your partner
They'd be your partner, and...
You're so vain, you probably think this song is about you
You're so vain, I'll bet you think this song is about you
Don't you? don't you?
You had me several years ago when I was still quite naive
Well you said that we made such a pretty pair
And that you would never leave
But you gave away the things you loved and one of them was me
I had some dreams, they were clouds in my coffee
Clouds in my coffee, and...
You're so vain, you probably think this song is about you
You're so vain, I'll bet you think this song is about you
Don't you? don't you? don't you?
I had some dreams they were clouds in my coffee
Clouds in my coffee, and...
You're so vain, you probably think this song is about you
You're so vain, I'll bet you think this song is about you
Don't you? don't you?
Well I hear you went up to Saratoga and your horse naturally won
Then you flew your Lear Jet up to Nova Scotia
To see the total eclipse of the sun
Well you're where you should be all the time
And when you're not you're with
Some underworld spy or the wife of a close friend
Wife of a close friend, and...
You're so vain, you probably think this song is about you
You're so vain, I'll bet you think this song is about you
Don't you? don't you? don't you?

A tribute to the oracle

 

Well, yesterday we recommended a little relax to the oracle. Though he is known for being a serious fan of Sun Tzu’s, maybe he is precisely falling into one of his traps. The Chinese philosopher advises to make you enemy more choleric if he is choleric in a given point in time, as this will lead him to irrational behavior, and will drive him to more mistakes. So, Big Mouth Larry, cool off a bit, won’t you?

All this story about theft and espionage, however, reminds us of the classic James Bond movies, doesn’t it? Super-villains to hate, super-heroes to love… Music sometimes helps relaxation.

So here we offer you, Big Mouth, a little musical suggestion that might suit you (sorry for the word, but with all these suing around, we couldn’t help it).

Not the same Carly you’d hate, is she? And tell your tennis colleague she’s not fishy, would you?

 

For those who want a transcript of the lyrics, there you go…

Nobody does it better
Makes me feel sad for the rest
Nobody does it half as good as you
Baby you're the best.
I wasn't lookin'
But somehow you found me
I tried to hide from your love light
But like heaven above me
The spy who loved me
Is keepin' all me secrets safe to night
And nobody does it better
Though sometimes I wish someone could
Nobody does it quite the way you do
Why'd you have to be so good.
The way that you hold me
Whenever you hold me
There's some kind of magic inside you
That keeps me from runnin'
But just keep it comin'
How'd you learn to do the things you do
And nobody does it better
Makes me feel sad for the rest
Nobody does it half as good as you
Baby
baby
darlin' you're the best
Baby you're the best
baby you're the best

Reading or playing at the oracle

 

Quick appendix to our previous post…

Apparently Léo Apotheker, by the way, is going to be traveling around the world meeting customers and HP teams as a good start for his new position at HP.

A secondary objective might probably be irritating the oracle (yukyuk).

So here is our little contribution to cool the oracle down a bit. Maybe he should relax a bit reading, playing games other than tennis, or both things!

Soooo obvious, that we’d better apologize in advance.

Note: Sorry kid, but this one’s Nintendo… no oracle software there… (hihihihihihihihihi)

Armani-labeled suits…

 

So here we go…Today the news is reproducing almost everywhere an email submitted by the oracle regarding the case of TomorrowNow’s, scheduled for the first day in November. There are even quite funny references to that (not saying the content is not serious).

But as we go through these references, we miss a certain link that explains why the outbursts from the oracle are coming these days, before the trial actually starts.

After all the mess about certain article published in NYT, a few days ago SAP formally asked for a gag order against the oracle.

And we think that this is probably one of the reasons why the oracle has actually exploded and certainly has done it before the trial started.

Should the gag order come effective, all the information and media influence about it would remain within the courtroom. So in certain way, this email from Big Mouth Larry is one more attempt to influence jurors before he must shut up publicly. it would be consistent with his style, as we recall his declarations about Mark Hurd’s ousting, and many other examples of his particular verbosity.

And trying to understand what he means in this email, we wonder what the need or purpose of sending it is .

First: He is not addressing that much the case itself, but more the fact of Léo Apotheker, former SAP CEO and currently HP CEO, attending the trial should he be called or not. His main point is this one. It is Léo Apotheker’s presence. The German exec is just one more witness in a longer list. SAP, the offender company, is hardly mentioned but incidentally, as the previous employer of Léo Apotheker.

Second: If he does have evidence about any wrongdoing by Léo Apotheker, then he indeed has a won case, and naturally Justice will grant him his demands. But it is up to the jurors to decide the verdict, not general public, and certainly not journalists. The case will be settled in a courtroom, not in parallel trials online.

Third: He boldly dares to guess HP’s plans of keeping Léo Apotheker away from the US in order to avoid having to attend the trial. Who is Big Mouth Larry to suggest cowardice of others?

We think that some explanation to the previous items lies in the hypothetical rationale in Big Mouth Larry’s feverish mind. If you want, the situation looks very much like crime investigation: The first suspects are usually those thought by investigators to get some kind of benefit from the crime.

One: By distracting its CEO, the oracle hits directly HP top managers. He would delay the effective start date at HP of Apotheker, and would have as well HP’s top managers sort of “distracted” too.

Two: All the energy and resources that Léo has and will have to dedicate to this issue won’t be therefore devoted to HP.

Three: HP’s reputation will be damaged. HP has already been too much in the news in the news because of legal matters: HP Board being sued by shareholder groups, HP suing Mark Hurd for lack of ethics, more shareholders suing HP for how the Hurd ouster was managed… not to mention earlier (and not so old) suit that cost the job to former chairwoman Patricia Dunn and so forth.

Four: Driving attention to Léo Apotheker in particular, and to HP and SAP at a broader level, effectively removes it from Mark Hurd primarily and Charles Phillips secondarily, much more tied to the oracle than to HP or SAP. This guys badly need it.

Five: Particularly related to Mark Hurd, this is a big favor from big-brother Larry… We could imagine, right after his ouster, Mark Hurd running out of tears to his tennis dear friend: “Larry, Larry, look at what they did to me; Larry, would you please stand for me?…”

Six: The self-assigned myth of invincibility and being above Good and Evil for Larry himself. Blinded by self-pride, the guy probably feels the need to prove himself and incidentally the rest of the world that his word is law… And a particularly sensitive community within the “rest of the world” is made up from the ranks at the oracle precisely. We would not be surprised if Big Mouth Larry expects his employees to fall down to their knees and surrender to the power of their Leader, like all those Ford-worshippers in George Orwell’s 1984.

It is said that Larry Ellison dresses in Armani suits. Being as rich as him, it is something that we could expect…Probably there are many Armani suits in the meetings and forums Larry attends.

   

Now, what we should not expect is to see are Armani suits in slum bullies brawling.

Elegance is more than just paying thousands of dollars for perfectly tailored suits, and ranking 6th in the list of wealthiest people in the globe…

If you’d follow me, it is not the suit: It is more the way you use and wear the suit. Armani, by the way, is just a label.