Oracle Hires Ex-HP CEO Hurd as President as Phillips Departs

Oracle Corp., the world’s second- biggest software company, hired former Hewlett-Packard Co. Chief Executive Officer Mark Hurd as a president and board member, reporting to CEO Larry Ellison. Oracle shares jumped.

The company also said in a statement that Charles Phillips resigned as president and director. Hurd, who exited HP last month after the company said he violated standards of business conduct, will serve alongside Oracle President Safra Catz.

At HP, Hurd more than tripled profit by cutting costs and expanding beyond the company’s core business of computers and printers. He oversaw an acquisition spree of more than $20 billion, letting the company branch out into services, networking equipment and smartphones. Oracle, which also has bulked up through takeovers, would draw on Hurd’s background blending software and hardware as it expands into server sales.

“It’s a great fit: As Oracle transitions from a software to a hardware company, who better than him?” said Brent Thill, an analyst at UBS AG in San Francisco who recommends buying Oracle shares. “They’re looking for someone who can take the company above $30 billion; he ran a company that was more than $100 billion. He’s got a very big role and is very capable of running the company someday.”

Oracle, based in Redwood City, California, rose $1.55, or 6.8 percent, to $24.47, at 9:41 a.m. New York time, adding $7.8 billion to the company’s market value. It jumped as much as 7.7 percent, the most since December. Before today, the shares had dropped 6.6 percent this year.

Replacement Candidate?

Hurd brings to Oracle experience running a computer company triple Oracle’s size, a track record of delivering shareholder returns and the ability to one day become CEO should the 66- year-old Ellison step aside, Thill said. The addition of Hurd could also aid Oracle’s acquisition strategy, he said yesterday in a note to clients.

Hurd, 53, left HP after an investigation of a sexual harassment allegation found inaccurate expense reports filed by Hurd or in his name. While the company determined that Hurd didn’t violate the harassment policy, it found that he concealed a personal relationship with his accuser, Jodie Fisher, a former actress who handled executive events. Hurd and Fisher, 50, settled her complaint out of court.

Prior to HP, Hurd led a turnaround at NCR Corp., where he helped integrate the company’s hardware business with the acquisition of Teradata Corp., a software maker. Ellison cited that experience, along with Hurd’s time at HP, when he named him to the job.

‘Brilliant Job’

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

Ellison upbraided HP’s board last month for letting Hurd go, comparing the move to Apple Inc.’s firing of Steve Jobs in the 1980s. In a letter to the New York Times, Ellison said, “The HP board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”

At Oracle, Hurd will work for a CEO who has bought more than 60 companies since early 2005, including Sun Microsystems Inc. for $7.3 billion this year, pushing the software maker into the market for servers -- machines that run websites and corporate networks.

Contending With Catz?

Hurd would be a CEO contender alongside Catz, 48, who was credited by Ellison for the company’s 18-month takeover of PeopleSoft Inc., transforming Oracle into the second-biggest maker of business-management software. “If I dropped dead tomorrow, Safra Catz would be the CEO of Oracle,” Ellison said at a September 2005 conference in San Francisco. “She is clearly our chief operating officer.”

Phillips “expressed his desire to transition out of the company” in December, Ellison said in yesterday’s statement. He said he asked Phillips to stay on through the integration of Sun.

Phillips, 51, joined Oracle in 2003 from Morgan Stanley, where he was a software analyst, and became co-president in January 2004. A former captain in the U.S. Marine Corps, Phillips was appointed last year to President Barack Obama’s Economic Recovery Advisory Board, a panel of advisers asked to propose solutions to the economic crisis.

“Charles has evolved our field culture toward a more customer-centric organization and improved our top line consistency through a period of tremendous change and growth,” Ellison said.

Extramarital Affair

Phillips said in January that he had a “serious relationship” with a woman who was not his wife for 8 1/2 years, through the middle of 2009, and that the affair had since ended. The statement came after billboards in New York carried images of Phillips and the woman, YaVaughnie Wilkins.

Analysts project that Oracle will reach sales of $34.1 billion in the fiscal year ending in May, according to a Bloomberg survey. It ranks second to Microsoft Corp. among companies whose main business is software. Hewlett-Packard, the biggest technology company by revenue, is expected to top $125 billion this year, analysts estimate.

In addition to taking on Phillips’s sales and marketing responsibilities, Hurd will manage Oracle’s customer support, said company spokeswoman Deborah Hellinger.

“He’s very capable of taking this company further, probably faster than Charles could have, Thill said.”

To contact the reporter on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

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