No more hiding, yet hidden

 

Several months ago, Hewlett-Packard announced its partnership with Bletchley Park for its WWII archives digitization.

For those readers who might not be familiar to the name, Bletchley Park is the site where the main activities by the Intelligence Services took place in order to decipher and break German codes.

According to Sir Winston Churchill, British Prime Minister during the war, Bletchley Park was the British Secret Weapon that allowed them to win the war. In fact they succeeded in breaking the German Code used by the famous Enigma machines, and ever since, German communications were transparent to the Allies despite having had the most technologically advanced cipher system. By the way, Germans never learnt before they surrendered their code had been broken, so sure they were about it.

Leó Apotheker is proving certainly some special skills which we find uncommon in a standard CEO. Not only he has smartly avoided any distraction related to the SAP-Oracle trial that is in its final stages, but as well shows some genuine sense of humour.

Furthermore, we think we have detected some additional skill. If we read carefully the press note in the previous link, we notice that just after the humoristic comment about actually being in Palo Alto during the conference call with analysts where HP posted latest financial results, he made a reference to Oracle’s attempt to distract him calling the latter “a competitor”.

Many journalists and online media have taken Oracle’s acquisition of Sun a sort of war declaration to HP, as Oracle had never been before in the hardware business. HP has claimed always Oracle as a partner, even after Mark Hurd’s “defection” in late summer 2010 to Oracle.

But we believe the term “competitor” was not really used just by chance. As the humoristic remark by Apotheker was catching the audience’s attention, he discreetly was sending a warning: Calling Oracle “a competitor” without mentioning directly its name was a way, in our opinion, to accept the war declaration from Oracle. Something like “Hi there, Larry! If you are looking for war, you got it.”

As a matter of fact, there are some facts that might support this thesis:

1. Out from the strategy hints Herr Apotheker offered, it seems clear his intention of boost R&D and software within HP. If this is not targeting Oracle, we guess nothing would. As Oracle got Sun, HP steps into software. If Oracle shows its teeth, HP does the same thing.

2. If HP confirms its dumping of Siebel (part of Oracle) and switches to Salesforce for CRM, this would be a clear war act.

We do not really know how close Herr Apotheker is to HP’s projects with Bletchley Park, but certainly he, on top of other skills, seems to be showing some expertise in coded messages.

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So much by so many to so few

 

After the French defeat in the West in 1940, only England opposed the German Third Reich in its quest to dominate Europe.

The next logical step for the Germans was, obviously, to defeat Great Britain. In order to do that, Germany needed to effectively invade the British Islands, a task that required either domination of the seas by the Germans (rather impossible a mission) or an overwhelming superiority in the air in order to protect landing forces.

On paper, Germany’s might was many times stronger than the British, particularly on ground  and air forces. Therefore, decisions were made, and Germany launched a series of massive air attacks against Britain, which were later to be known as The Battle of England.

Air combat was surrounded by a lot of propaganda from the German side, a lot of boasting, if you will, particularly led by the boss of the German Air Force, die Luftwaffe, Reichsmarschall Hermann Göring.

Numerically inferior, lacking pilots and limited in resources, the Royal Air Force resisted for months, using intelligence, technological advantages like radar and the geographical benefit of battling over British territory.

By the end of 1940, a period described by Winston Churchill, His Majesty’s Prime Minister, as “Britain’s darkest hour”, the German High Command gave up any plans for invading Great Britain.

The full merit of that first and decisive British victory was fully due to the very limited number of pilots who served at the Royal Air Force, RAF, and in one of his most memorable quotes, Winston Churchill said that “never in History was so much owed by so many –the British- to so few” –the pilots.

Our opinion, and not more than just that, an opinion, is that after all the propaganda-like boasting and the even violent attacks by the Pontifex Maximus at the oracle, with all his might and power, and despite the $120 million attorney’s fees to be paid by SAP, whatever the final result might be, the sentence will be closer to SAP’s position than to the oracle’s.

In this case, the savings for SAP compared to the potential total cost will be massive, so it could be considered an actual victory for the Germans. And in this case too, “never in the recent years so much was owed by so many –SAP employees and shareholders- to so few” –SAPs lawyers and particularly Top Execs, so few dared to appear.

Trying to be fair, however, we could have recommended the Pontifex to quote Winston Churchill too when he served his testimony, instead of boasting like a merchant sailor: “never in the recent years so much was owed by so many –SAP employees and shareholders- because of so few” –the actual “safe-passaged” customers.

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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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A matter of faith

 

We have just been aware of the first commercial delivered by Microsoft to promote its Windows Phone 7 smartphone.

Really: The new advertising campaign by MS, on behalf of its WP7 operating system for smartphones.

When we watched it, the first impression we got was that it could not be a better match for Microsoft’s image. They have taken a lot of money to produce a technically correct ad, and have compressed to many things to try to deliver a simple message.

Typical from Microsoft: Too much complication to express something simple, too many taglines to deliver a theoretical breakthrough.

The message was much simpler: In theory, WP7 will deliver a user experience that will avoid situations like the ones depicted in the commercial.

The communication: Complicated, difficult to understand, and really needs time and many replays to get the message through.

The tagline: As in every Microsoft product, 90% of it is redundant and/or useless, 5% could be useful or valid, and the remaining 5% is to pay for the campaigns that will try to justify the previous two. Take a look to any Apple commercial: Simple, concise, and to the point. See samples here, and here, and here.

Now, having said this, the next thing that pops in our minds is: If WP7 is going to be so different that it will fade away other already proven and well established alternatives, why and how is it going to make that shift in the market happen?

The communication miserably fails to achieve this. It is a matter of faith in them what this add is asking customers to make, just because it is Microsoft.

We have all seen situations like the ones describes in the add. And many of us have even starred them, we must admit. It is not, however, because of the phone itself. It’s not because of its operating system. Curiously enough, the add targets mainly Blackberries for some reason, and we’ll come back to this later. It is the contents what matters, it is about all the things we now can do or access to just by having a smartphone. And from a content perspective, and from a features point of view that Microsoft pathetically challenges the faith they are demanding from their fans, if there are any left. Too late, too featureless for a bride in a wedding, we said a few days ago.

Back to Blackberries… what is Microsoft’s fixation with these guys? No iPhones, no Symbians, no Androids. Just Blackberries. But all of them are really blocking the door to the WP7s. It could be that Steve Ballmer does not want to be like George Bernard Shaw inviting Winston Churchill to one of his grand openings once. Mr. Shaw sent two tickets to sir Winston with a note that said “I am presenting a new play, and I would be very glad to have your attendance. I am sending two tickets so you may come with a friend, should you have any.” To what sir Winton elegantly replied: “I appreciate the honor, but state matter make it impossible for me to attend,. I shall gladly attend a second performance, in case there is any.”

 

We could imagine Apple, Google or Nokia execs receiving notes from Steve Ballmer with sample units of WP7 and notes saying something like “We would appreciate your feedback and opinion about the new operating system WP7, as this is going to make people forget about their current phones. We send several units in case you would like to request a friend to help you using them, in case you have any.” To what Jobs, Elop and Eric Schmidt could easily reply: “Too busy counting revenue and profits from our smartphone divisions; impossible to care for WP7 right now, but we will gladly review version 2.0 should it ever exist.”

 

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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.