As someone who enjoys the spectacle of a good corporate fight and shameless mud-slinging, it’s fun to see the aging pachyderms of Silicon Valley duke it out in the courts, and by extension in the press. Given Larry Ellison’s very public and vocal support of ex-HP (s hpq) CEO Mark Hurd, it wasn’t much of a surprise that Oracle (s orcl) hired him as co-president. Less than a day later, HP — its nose tweaked — decided to sue Hurd and Oracle. They gave a litany of reasons, many of which were covered by Mathew yesterday. It’s expected that a fight this juicy is getting a lot of press.
The big question on my mind is: What’s the real story? I mean, Hurd, Oracle and Ellison had to know that HP would respond with a legal action of some sort. This lawsuit is really par for the course; if HP didn’t sue, that would have been a surprise. So clearly, Hurd and Ellison have mapped out the entire scenario very carefully, and they must have engaged legal help here. Those two are way too smart to not have planned for this and built strong defenses. I’m pretty sure Hurd has an ace up his sleeve, or he wouldn’t be risking his awfully generous settlement package.
As a result, I have come up with a Machiavellian theory about what that game is (and remember it’s just a theory) that goes something like this:
- Oracle appoints Hurd; HP gets angry and sues Oracle, Hurd.
- The lawsuit forces HP and its senior management’s entire attention on stopping this clear and present danger to their business.
- Oracle continues to work, as Larry is still the king of that castle. Hurd leads the fight against HP. His intimate knowledge of HP allows him to direct pin-pointed legal attacks at his former employer.
- Hurd wants HP to air his so-called dirty laundry, only to prove that HP essentially pushed him out. (Okay this one is maybe a stretch.)
- The legal hostilities drag HP’s attention away from hiring a CEO.
- All this mud-slinging spooks some of the outside candidates for the top job at HP. I mean, if you’re considering a gig at that company and you see it going after Hurd with hammer and tongs… you’re going to think twice.
- HP ends up picking an internal candidate, which essentially causes fissures in the senior ranks and turns the company into a series of fiefdoms.
- Chaos at HP essentially helps Oracle.
If you watched the breathless bidding for storage provider 3PAR (s par) with HP paying almost twice as much as what Dell (s dell) initially offered, you know the company is losing fiscal discipline. Sure, the 3PAR deal came on HP’s radar during Hurd’s tenure, but the price it paid shows that the company needs to get a grip. I not sure Larry’s taunting is going to help. In a statement released late afternoon on Tuesday, Ellison did his best to poke HP in the eye:
“Oracle has long viewed HP as an important partner,” said Oracle CEO Larry Ellison. “By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace.”
I bet there’s more to come. Like you, I am ready for the show!