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Oracle hires former HP CEO Hurd as president

Mark Hurd, who resigned suddenly from Hewlett-Packard last month amid an ethics controversy, will now be reporting directly to Oracle CEO Larry Ellison.

As some had been expecting, Oracle announced Monday evening that it has hired former Hewlett-Packard CEO Mark Hurd to be its new company co-president as well as a member of its board of directors.

Hurd will report directly to Oracle CEO Larry Ellison and serve alongside existing co-president Safra Catz. Charles Phillips, who had been serving as co-president with Catz, has resigned and given up his seat on the board, according to a separate announcement from Oracle Monday night.

Mark Hurd
Mark Hurd HP

The news is an interesting turn in what has been a rocky month or so for Hurd, who had been regarded as one of Silicon Valley's most successful executives. He was widely credited with steering HP back to steady growth and profitability following the tumult during the previous stewardship of Carly Fiorina, whom he succeeded as chief executive.

But in August, Hurd resigned suddenly after HP's board of directors concluded that he had violated the company's code of business conduct in connection with his relationship with a former marketing contractor who worked with HP.

At that time, Ellison lashed out against the decision by the HP board to ask for his friend's resignation, saying, in an e-mail to The New York Times, the board had "made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."

In a statement Monday, Ellison said this of his new underling: "Mark did a brilliant job at HP and I expect he'll do even better at Oracle. There is no executive in the IT world with more relevant experience than Mark."

Hurd brings skills and experience that Ellison likely covets. Before his controversial departure from HP, Hurd was widely considered an operational guru. Under his watch, HP became the largest computer company in the world when measured by total revenue. He also managed a number of large acquisitions--not to mention bringing financial stability after the departure of Fiorina, now a Republican candidate for U.S. Senator in California.

Most importantly, few executives other than Hurd could claim experience running a company with large hardware, software, and consulting businesses. And that's exactly what Oracle needs now that it is busy integrating Silicon Valley icon Sun Microsystems, which it acquired last year. None of Oracle's management trio of Catz, Phillips, and Ellison had any experience running a computer hardware business. Catz and Phillips had been bankers before joining Oracle, and Ellison has, until acquiring Sun, studiously avoided hardware, which carries far lower sales margins than software and demands operational discipline.

Hurd and Ellison are reportedly buddies, living near each other and occasionally playing tennis together. Hurd's tough attitude will also play well inside Oracle, which many consider to have one of the most aggressive--some would say cutthroat--corporate cultures in Silicon Valley.

That said, Ellison has never been afraid to bring in high-profile executives. In the early 1990s, Oracle was on the ropes, and Ellison hired Ray Lane to be company president and to manage the day-to-day operations of company. Lane was credited with righting Oracle and helping to turn it into one of the largest software companies in the world. But he was forced out the of the company in 2000 by Ellison and is now a partner at the famed venture capital firm Kleiner Perkins.

Charles Phillips: Odd man out?
Phillips' departure from Oracle is perhaps the most surprising aspect of Monday night's news. A respected financial analyst who specialized in software at Morgan Stanley before joining the company in 2003, Phillips had become a public face for the company. His co-president Safra Catz, assumed to be Phillips' competition to succeed Ellison, was viewed as Ellison's enforcer, an internally-focused, financial strategist.

Charles Phillips, who had been serving as Oracle's co-president with Safra Catz, has resigned and given up his seat on the board. Oracle

Although Oracle said in a statement that Phillips was planning to leave the company before Hurd was hired, he likely would have been the odd man out with the former HP chief on board.

Hurd's quick appointment brings up intriguing questions for Oracle. To start, merely by joining the company he becomes heir apparent to replace Ellison as Oracle's chief executive. Ellison is now 66 and has interests outside of running the company he co-founded many would consider a full-time job, including running Oracle Racing, his yachting team that won the last America's Cup and is now vying to bring the next cup competition to San Francisco Bay, near Oracle's headquarters in Redwood Shores, Calif.

Also, Hurd's appointment makes clear just how much Oracle, once a specialist in database and enterprise software such as financial systems for multinational companies, has changed since it started on an acquisition spree seven years ago with bitterly contested acquisition of rival software maker PeopleSoft. Since then, Oracle has acquired more rivals, such as Siebel Systems, and partners, such as Sun. Now whoever runs Oracle must manage a massive portfolio of products, ranging from open source-based databases and wonky manufacturing management software to both high and low-end servers acquired with Sun.

Ellison's eye for executive talent shouldn't be underestimated. At one point six years ago, at least five of the 10 largest software companies in the world were being run by former Oracle executives. That legacy continues today at, the innovative, cloud-based customer-managment software company founded and run by yet another Ellison protege, Marc Benioff.

Hurd resignation revisited
The exact details of Hurd's departure still haven't been made public. We know the HP board asked him to resign after a company investigation found that he had turned in inaccurate expense reports, reportedly in the range of $1,000 to $20,000. The company's board unearthed that information after investigating claims by a former contractor to HP, Jodie Fisher, that Hurd had sexually harassed her. Hurd was cleared of sexual harassment by HP's board, and he settled out of court with Fisher.

Ellison said Hurd should not have been removed since HP's own investigation found no truth to the harassment claim.

"In losing Mark Hurd, the HP board failed to act in the best interest of HP's employees, shareholders, customers and partners...The HP board admits that it fully investigated the sexual harassment claims against Mark and found them to be utterly false," he said in the aforementioned e-mail to the Times.

In any case, Ellison seems unafraid of the controversy surrounding Hurd's departure from HP. It's also likely Oracle's board of directors, which is chaired by former Oracle Chief Financial Officer Jeff Henley and includes other well-known Silicon Valley personalities such as Stanford University economist Michael Boskin and former Adobe CEO Bruce Chizen, was convinced that whatever happened at HP won't happen again at Oracle.

CNET reporter Erica Ogg contributed to this report.

This post was updated at 7:35 p.m. PDT and again at 8:02 p.m. and 9:48 p.m. with more details and background.