HP challenges Hurd’s new role

Hewlett-Packard may be fighting a rearguard action to stop its former chief executive, Mark Hurd, from taking up a position with rival Oracle, but it has conspicuously failed to dent Wall Street’s enthusiasm for the move.

Shares in the maker of database software jumped by nearly 6 per cent on Tuesday on hopes that Mr Hurd will bring a sharp new operational discipline to the company. The latest evidence of investor confidence in Mr Hurd’s management abilities echoes the 8 per cent fall in HP’s shares the day after he was forced to resign.

Wall Street analysts also predicted that Mr Hurd’s arrival would see Oracle push more aggressively into the computer hardware business against some of the industry’s biggest names – including HP.

The stock market vote of confidence in Mr Hurd’s abilities came despite an HP lawsuit designed to prevent him from taking a position that the company claimed would lead inevitably to him divulging confidential information.

Larry Ellison, Oracle’s chief executive, has done little to disguise his reasons for bringing Mr Hurd on board. Oracle’s future, he said in a statement, lay in “engineering complete and integrated hardware and software systems”.

Mr Hurd will bring much-needed experience of selling integrated products such as these, as Oracle moves beyond its traditional software base, and his arrival could well increase the chances the company will mount further hardware acquisitions to make it a stronger competitor to HP and IBM, said Brent Thill, an analyst at UBS.

In a statement released by Oracle this week, Mr Hurd was quoted as saying that the company’s new integrated approach to IT systems would enable it to “beat IBM in both enterprise servers and storage”.

The conspicuous reference to only one large competitor was highlighted by HP in its lawsuit, which claimed that Mr Hurd and Oracle were trying to distract attention from the fact that he would be turning his internal knowledge about HP against his previous employer.

Mr Hurd’s move from the top of the world’s biggest computer maker to a lesser role at Oracle raised questions in some quarters about whether his friendship with Mr Ellison could turn into a successful working partnership.

“He’s run a company four times larger than Oracle, so the obvious question is, will he become frustrated?” said Mr Thill. He added, however, that the Oracle had succeeded in the past at dividing up the company’s operations in a way that left a group of senior executives with their own defined areas of responsibility.

Making room for Mr Hurd, Oracle said that Charles Phillips, its co- president in charge of sales and marketing, had resigned. Mr Ellison said that Mr Phillips had first approached him about leaving the company last December.

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