Why the Charles Phillips-Mark Hurd saga proves nothing at Oracle has changed

It’s hard to describe the sense of expectation, the built-up tension that filled the room when Charles Phillips walked in to take questions at Oracle OpenWorld 2004.

He was there to take questions about the company’s controversial decision to make a hostile takeover of PeopleSoft, just days after its rival announced plans to merge with J.D. Edwards. Oracle’s chairman, Larry Ellison, didn’t even try to come across as anything less than an utterly ruthless entrepreneur who would act, through his company, as the “industry consolidator.” It fell to Phillips to take the heat from the media. And he did. For about a full hour. I was there, in the audience, and I can tell you it was something to see. Some of the questions made subtle implications about the company’s ulterior motives. Others were more forthright in painting Ellison as the devil. Apart from a few occasions where he made some deft jabs at competitors like SAP, Phillips didn’t seem to blink. This, you could easily see, was why he held the most important of the three presidential positions at what quickly became a business software juggernaut.

It’s important to note, amid all the hullaballoo over Phillips’ departure and disgraced former HP CEO Mark Hurd’s appointment at Oracle, that he’s not fully replacing him. Hurd will run sales and marketing, while former Phase Forward CEO Bob Weiler will manage all the global business units. Phillips used to do both. The fact that the latter responsibilities were taken away from him was an indicator to financial analysts that he was on the way out. Hurd’s new role, given Oracle’s weird presidential troika, would translate at best into a VP of sales and marketing role at almost any other vendor.

Phillips joined Oracle after the departure, in 2000, of Ray Lane, the kind of second-in-command who always seemed to struggle with asserting his authority with Ellison, based on his own comments to the Charlie Rose program a few years later. He was, in fact, rather public at how ill-treated he had been, to the point where he looked like a complainer. Phillips was different. Unflappable, coolly professional and almost always unsmiling, he projected the kind of sleek, streamlined image that Oracle was seeking to associate with its brand of integrated software suites.

The big mission under Phillips’ tenure was Fusion, a project to comfortably marry all the applications from JDE, PeopleSoft, and later Siebel and BEA. That there hasn’t been much public outcry from users may be due more to Oracle’s decision to offer lifetime support to the customers of those acquired firms. That bought Phillips and his team considerable time. It is not 2010, however, and there is still much confusion over whether Fusion applications will be fully ready by Oracle OpenWorld next week, whether they will be offered as a service and at what kind of price point. To be fair, Oracle has continued to buy vendors as the Fusion project progressed – the company has been the position of cooking a recipe while unexpected ingredients have been thrown into the pot. If customers don’t like the taste, Oracle will be stuck doing a lot of make-good support and maintenance on its legacy products.

Hurd, meanwhile, represents another kind of fusion happening at Oracle right now: the marriage of its traditional software strength with hardware acquired through Sun Microsystems. In the long-term history of Oracle, Phillips will likely be remembered as the man who consolidated its position as a software player, while Hurd (unless HP’s lawsuit prevents him from working there) will be the man to make Oracle better known as the Exadata server best-seller. Just don’t expect much vision. You didn’t hear it much from Phillips, and you won’t hear it much from Hurd. There is a difference between being given a job and being given power. At Oracle, as this revolving door of senior management proves, all the real power remains with Larry Ellison. That particular fusion was accomplished a long time ago, and ain’t nobody is going to undo it.   

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