Eye on Oracle

Sep 22 2010   1:19AM GMT

Oracle, HP, Mark Hurd come to quick settlement

Mark Fontecchio Mark Fontecchio Profile: Mark Fontecchio

News came this week that Oracle and HP quickly settled their dispute over former HP CEO Mark Hurd being hired as co-president of Oracle.

The word is that HP wouldn’t have had much of a case in court, with some saying that HP’s partnership with Oracle is too valuable to HP to drag out a lawsuit. All of it helps to confirm Oracle’s potential status as the world’s scariest software company.

Hurd resigned from HP in August amid allegations of sexual harassment of an HP employee and discrepancies of up to $20,000 on Hurd’s expense reports. Upon the news, Oracle CEO Larry Ellison lashed out against the HP board for forcing the resignation of Hurd, who often plays tennis with Ellison. Shortly later, Ellison hired Hurd as co-president of Oracle, replacing Charles Phillips.

That’s called a one-two punch.

The next day, HP sued Oracle, saying Hurd violated his severance agreement. Ellison then said the lawsuit would put a strain on the partnership between HP and Oracle.

Now it’s three weeks later, and the two have settled. In a regulatory filing yesterday, HP said Hurd agreed to return almost 350,000 HP shares that was part of his severance, which also included about $12 million in cash.

People I’ve talked to here at Oracle OpenWorld said a strain on the partnership between HP and Oracle would put more of a strain on HP than it would Oracle. HP simply provides the hardware that Oracle Database runs on. Ask most IT people out there, and they’ll tell you that they are much willing to switch to a different hardware vendor than rip-and-replace their Oracle infrastructure.

If HP dragged on the lawsuit, would Oracle have positioned itself as even more of a competitor to HP than it already has? That’s likely. In Ellison’s eyes, HP just provides commodity hardware that Oracle Database runs on. It would be better for Oracle if its customers ran on Oracle/Sun hardware anyway, so they would have just ratcheted up the sales pitch even more.

End users’ reaction to all this hullabaloo? Most don’t really care.

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