Seeking Alpha
Recommended for you:
Long only, medium-term horizon, tech, solar
Profile| Send Message|
( followers)  

Oracle (NYSE:ORCL) co-President Mark Hurd is back in the spotlight, holding court at the company's annual OracleWorld event with what he calls a "holistic strategy" aimed at evolving enterprises toward cloud computing -- using Oracle products, of course.

Meanwhile, his successor as CEO of Hewlett-Packard (NYSE:HPQ), Meg Whitman, is writing off 2013 to internal politics as she had previously written off 2012.

What this means is that Oracle doesn't really have to execute on its cloud strategy next year to succeed. It will be given time, and CIO attention, because -- unlike competitors such as Hewlett-Packard -- at least it has a story to tell. It will be allowed to execute a strategy of gradually replacing hardware revenues with software revenues, and tying CIOs to its products long term without interference from what should be its strongest competitor.

The story Oracle told this week is that it will be the Apple of the enterprise. Oracle's "Simplify IT" plan uses Oracle's Op Center 12 software to deliver virtualization and savings to existing data centers, without jettisoning any existing enterprise applications.

Meanwhile, Oracle will make itself even more indispensable to CIOs with its Exadata and Exalogic hardware. They may be more expensive than commodity cloud servers, but they run the applications CIOs know -- Oracle applications -- and they can be called (with some justification) a "private cloud."

Finally, on the application side, Oracle is spending lots of time trashing Salesforce.com (NYSE:CRM) and other vendors of cloud-based corporate applications. And it's promising a "social media suite" that will maintain central control over both social activities and measurements.

All this means that, in contrast to Hewlett-Packard, Oracle earnings can plow ahead. The company is turning over one-third of its revenue into free cash flow, most of which is of very high quality -- meaning it can continue to be generated over time and isn't based on one-time events.

You might now call Hurd the Jimbo Fisher to CEO Larry Ellison's Bobby Bowden, the head coach in waiting -- only with a fatter paycheck. He seems to have managed the unlikely trick of falling upward, assuring the entrepreneur above him has a solid succession plan in place, while the good times continue to roll.

He can thank Hewlett-Packard for that.

Source: While Hewlett-Packard Dithers, Oracle Eats Its Lunch