HP and Oracle reach an agreement over Mark Hurd

21 Sep 2010

The way is now clear for former HP CEO Mark Hurd to take on his new role at Oracle. As part of a deal brokered between Larry Ellison and Marc Andreessen, Hurd will have to part with the US$14m in stock that was part of his severance package.

Mark Hurd stepped down as HP CEO over questions about his expenses. This came after an allegation of sexual harassment by a female consultant, which HP found did not break its policy on the subject.

A fortnight ago, Oracle confirmed that Hurd, a friend of its CEO Larry Ellison, was to take up the role of co-president of the company, reporting to Ellison. It is speculated that Hurd could help Oracle continue the integration of Sun Microsystems, after its purchase of the company for US$7bn in 2009.

“Mark did a brilliant job at HP and I expect he’ll do even better at Oracle,” said Ellison. “There is no executive in the IT world with more relevant experience than Mark.”

However, HP decided to sue over Hurd’s appointment as co-president of Oracle, citing serious “strategic advantages” it would have and knowledge of HP’s strengths and weaknesses.

In its suit, HP said Oracle would gain a strategic advantage in terms of where to allocate resources and exploit knowledge of HP’s weaknesses.

Last night, it emerged that both companies reached an agreement whereby Hurd will adhere to obligations to protect HP’s confidential information.

The rift exposed a distance that had been emerging between two companies that in the past collaborated well together. In particular, Oracle’s acquisition of Sun Microsystems, which brought the company into the server and hardware space, was of growing concern to HP and which was compounded by Hurd’s appointment.

“Oracle and HP will continue to build and expand a partnership that has already lasted for over 25 years,” Ellison said in a statement released by HP.

Cathie Lesjak, HP’s interim chief executive, said, “We look forward to collaborating with Oracle in the future.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years