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Why Mark Hurd and Oracle Are a Perfect Fit

By Eric Bleeker – Updated Apr 6, 2017 at 11:44AM

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Hurd has the right experience in areas that matter.

Former Hewlett-Packard (NYSE: HPQ) CEO Mark Hurd might land on his feet just fine. And moving arrangements shouldn't be too difficult, either; he'd be taking a 14-mile stroll to Oracle's (Nasdaq: ORCL) Redwood City headquarters.

The key was judgment, not performance
Hurd unexpectedly stepped down from HP last month. It's not that his performance was lacking; he'd successfully navigated the company into the higher-margin services arena and HP had record profits during his tenure. Performance wasn't questioned -- his ethics were. Certain "improprieties" came to light regarding Hurd and a former actress who was consulting for the company. While HP's board didn't find any violations of sexual harassment, other areas like filing bogus expense reports were cited.

Those nagging ethics questions haven't stopped Oracle from being interested, according to reports from The Wall Street Journal. While the specific job he'd take isn't known, Hurd moving to Oracle would be a big move. (It's worth noting that the Journal says talks are still ongoing, and any potential deal could fall apart.)

A coup for Oracle
If the deal does come together, it's hard to see it as anything but a coup for Oracle. Oracle's recent acquisition of Sun pushed it further into the hardware space, an area that Hurd dealt with every day running HP's storage and servers business.

Convergence is the word of the decade for big technology firms -- they're effectively trying to copy IBM's (NYSE: IBM) playbook and offer end-to-end solutions. To complete that vision, HP has been trying to transform itself from a hardware-focused company to one that also packages services and software. Sun is moving in the opposite direction, pushing from software to hardware.

That's where Hurd can help. He already directed HP into offering more complete solutions, and that expertise could be readily applied to Oracle. Not only that, but as CEO of NCR (NYSE: NCR) earlier this decade, Hurd had experience running Teradata, the company's data warehousing and business intelligence unit. After Hurd left, NCR spun off Teradata (NYSE: TDC), which is now a $6 billion firm that goes head to head with Oracle's software. This experience with a direct competitor of Oracle makes Hurd even more of an ideal candidate; he knows the software Oracle is bundling with its servers.

Bottom line
Hurd has the experience and skill set to help lead Oracle through its transformation. Don't let his unceremonious ending with HP fool you -- Mark Hurd and Oracle are a perfect fit. Now, let's just hope the honeymoon phase lasts between him and Larry Ellison.

Eric Bleeker owns shares of no companies listed above. Teradata is a Motley Fool Stock Advisor pick. The Fool owns shares of Oracle. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

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Stocks Mentioned

HP Stock Quote
HP
HPQ
$26.48 (-1.12%) $0.30
Teradata Stock Quote
Teradata
TDC
$31.36 (-1.69%) $0.54
International Business Machines Corporation Stock Quote
International Business Machines Corporation
IBM
$122.23 (-2.79%) $-3.51
Oracle Corporation Stock Quote
Oracle Corporation
ORCL
$65.30 (-2.01%) $-1.34
NCR Stock Quote
NCR
NCR
$20.20 (-1.46%) $0.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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