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HP strikes back at Oracle with SAP CEO pick

Apotheker more Hurd than Hurd

The smart choice: opportunity from uncertainty

Is this a vision is see before me? No.

Apotheker – along with the rest of SAP's top management – must also shoulder the blame for SAP being eclipsed by Oracle on the strategic front. Ellison's beast has been on an M&A and growth tear since 2005. The idea is to build an integrated stack of software, and now hardware, and to drive growth by acquiring companies – and their customers.

Apotheker had three years to serve Oracle with an aggressive counter vision during his various deputy, co-CEO, and solo CEO roles, but nothing happened. Instead, SAP spent $5.8bn on Sybase this year, and this week, there's talk of the company acquiring Sage – i.e. serving more of the same small-to-mid-market that Business By Design was supposed to serve.

Under Apotheker, SAP has suffered through myopia and laziness. It milks its existing, fat client-server business, but that's about it.

The result? So much for those 18 quarters of growth. In October 2008, having failed to diversify out of its existing business and having tightened the screws, SAP was hit by a "surprise" drop in corporate spending as the economy went south in mid-2008 and customers started cutting back. In SAP's fourth quarter of 2009, reported in January this year, SAP's quarterly and annual revenues fell by nearly 10 per cent each. Meanwhile, Oracle posted increases.

Apotheker was gone from the CEO's position a month after the results were published.

SAP's great answer, when it finally came, was SAP's Business By Design online ERP suite. But delivery was dogged by slide ware and stage-managed events designed only to convince people SAP really did have an answer as delivery seemed to drag.

When it arrived three years ago, SAP claimed that Business By Design would land 10,000 customers by 2010. In September this year, analysts put total number of customers at 100.

The problem here: Apotheker's inability to think outside of the existing SAP box or established bureaucratic lines.

If vision and execution have been burdens, so has Apotheker's apparent knack for embarrassing his employers in their dealings with - guess who? - Oracle.

Ellison's toes

In 2009, while he was CEO, Apotheker wrote to Ellison asking for a meeting to discuss "significant concerns" over Oracle's proposed purchase of Sun Microsystems. The letter leaked and raised questions about whether Apotheker – as head of the world's largest business software company – was offering to have a word in the ear of the European Union investigating the Sun deal to call off the probe in exchange for something, er, unspecified in return.

At the time, Oracle was prosecuting SAP, claiming the TomorrowNow subsidiary had been guilty of stealing Oracle's proprietary secrets and documents to take PeopleSoft customers. SAP denied there'd been anything improper and said Apotheker's letter referred to concerns it had about the future of the Java programming language.

Oracle and HP were in damage-limitation mode at the database giant's OpenWorld last week, following their Oracle CEO versus HP board spat over Hurd. Ellison had called HP's prosecution of Hurd potentially damaging to its relationship with Oracle. At OpenWorld, Oracle president Safra Catz and HP's enterprise business executive vice president Ann Livermore talked about the companies' great relationship.

Apotheker's hiring would suggest HP hasn't forgiven Ellison's remarks or forgotten. In fact, it has put a big fat reminder in Ellison's face about who it's dealing with by hiring some SAP blue blood. Apotheker's presence reminds Oracle that HP is its own company and his presence suggests HP will leverage its business' relationship with SAP in joint customers and work to deliver SAP apps on HP hardware as an alternative to Oracle.

Or at least, that's what HP wants Ellison to think and it's keeping him on his toes. ®

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