Saturday, October 01, 2011

The Oracle-H.P. Rivalry, Powerpoint Version

Did information technology just run afoul of disinformation technology?

Computing giants Oracle and Hewlett-Packard, known trash talking each other and for fighting in court, took their sniping to the Internet on Wednesday when Oracle charged that British software company Autonomy, which H.P. is buying for $10.2 billion, tried to sell itself to Oracle last April. Oracle said it was not interested, since the $6 billion market value Autonomy had at the time was still far more than Autonomy was worth.

The implication was that H.P. came in second, and is foolish, in buying Autonomy.

Oracle even posted a series of slides on its Web site that it said showed Autonomy chief executive Mike Lynch's intention to sell his company. The slides, Oracle said, were “all about Autonomy's financial results, Autonomy's stock price history, Autonomy's Price/Earnings history and Autonomy's stock market valuation. Oracle also said Mr. Lynch showed up at the meeting with “Silicon Valley's most famous shopper/seller of companies, the legendary investment banker Frank Quattrone.

Mysteriously, those slides, which were widely commented on in the industry press Thursday, were only posted for about 12 hours. Then they disappeared. A few hours later they were back. It seems there is less there than Oracle intended. Here’s what I learned.

Oracle continued to publish a page that said Mr. Lynch came by for talks with Mark Hurd, Oracle’s co-president, and Doug Kehring, who is in charge of mergers and acquisitions at Oracle. For his part, Mr. Lynch acknowledged the meeting, but said it was just a customer visit that Mr. Quattrone organized. Why he was meeting the head of mergers was not explained.

Upon request, Oracle sent The New York Times the slides, which is said were sent from Qatalyst firm, not Autonomy, in January. That backs up Autonomy's assertion that Oracle had lifted an older slide deck from Mr. Quattrone to make Mr. Lynch look bad — Mr. Quattrone wasn’t even working for Autonomy then.

So what is going on here? Did Mr. Lynch try to sell Autonomy to Oracle, or did Oracle post the story and slides to make H.P. look bad? This may be one of those occasions when it is possible to think ill of both parties. Mr. Lynch did talk to Oracle's head of M&A before he took the H.P. deal, and Oracle's cleverly-worded description of the meeting makes it look like he went into a lot more detail than he would like to admit. The deck looks like a bit of extra “evidence that Oracle later pulled.

Mr. Lynch probably sparked Oracle's outburst with his recent statements that Larry Ellison, Oracle’s chief executive, was lying about whether Oracle’s software could do the same kind of things Autonomy's software does. Not that it took a lot to get Oracle started: In the past year Mr. Ellison has publicly criticized H.P.'s board for firing Mr. Hurd, his friend and tennis partner, and then hired Mr. Hurd himself. The hiring provoked a lawsuit between H.P. and Mr. Hurd, which was quickly settled. Another lawsuit between H.P. and Oracle, over Oracle's decision to discontinue software development on one of H.P.'s advanced chips, is still going on.

In between the lawsuits, Mr. Ellison said Leo Apotheker, Mr. Hurd's replacement, conducted industrial espionage against Oracle when he was running SAP. (Though SAP settled that suit and admitted wrongdoing, it said Mr. Apotheker was not involved in the incidents.)

Only one thing is nearly certain in this name-calling mess: Meg Whitman, who took over at H.P. when Mr. Apotheker was fired last week, will not be onstage for hugs and camaraderie when Mr. Ellison kicks off Oracle's massive trade show in San Francisco this Sunday evening.

Or, as one observer involved in the cross-company slinging put it “Oracle used Autonomy to give H.P. a poke in the eye. It just got ridiculous.”

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