Big Money Mark: Five Reasons Hurd Is Worth Every Penny

Will Ellison's Big Bet On Hurd Pay Off?

There is a reason that Oracle CEO Larry Ellison has decided to pay former HP CEO Mark Hurd $950,000 and up to a $10 million bonus. It’s called money in the bank. Hurd is highly regarded within the rough and tumble technology business for his success taking HP from a struggling tech giant chasing the likes of Dell and IBM to the undisputed number one IT company in the world. Here are five reasons that Ellison's $11 million-plus bet on Hurd will pay off for Oracle.

Hurd Is The Ultimate 'Show Me The Money,' Results-Oriented Executive

You can't argue with results. Hurd took a company that was rudderless and adrift in HP and transformed it into the number one IT company in the world. HP was considered a poorly run, struggling tech-giant wannabe when Hurd took the helm. Now it is considered a finely-tuned, sales-focused behemoth.

Before Hurd took the helm five years ago, HP was an $80 billion company with about $5 billion in profits. Under Hurd's leadership, HP ended 2009 with $114.6 billion in sales and profits of $10.1 billion. And the company's stock market value under Hurd increased by more than half to a whopping $97.7 billion.

There's a reason Oracle CEO Ellison hired Hurd. He knows it's going to pay off in both the Oracle sales and earnings columns. Hurd is already pulling his weight. Oracle shares rose $1.34 to $24.26 on the news of Hurd's appointment.

Hurd Is An M&A Madman

Hurd's M&A (merger and acquisition) expertise is going to pay off in spades for Oracle. Hurd's genius is his ability to take under-priced and badly managed IT assets, acquire them and fine tune and optimize them.

At HP, his acquisitions of systems integration giant EDS, networking stalwart 3Com and hand-held computing superstar Palm filled big gaps in the HP's product portfolio. And they were all acquired at bargain basement prices and are paying off big-time for HP.

Look for Hurd to work the same kind of M&A magic at Oracle with potential targets like systems integration giant CSC, networking superstar Juniper and enterprise storage kingpin Hitachi Data Systems.

Combine Hurd's M&A madness with Oracle CEO Larry Ellison's go-for-the-throat competitive fire and you can bet we will see some earth shattering deals from Oracle over the next several years. Hurd and Ellison. Now that's a pair that beats a full house.

Hurd Will Make Sun Shine At Oracle

Oracle is in the midst of what may well be the most strategic acquisition in its history with its $7.4 billion acquisition of Sun.

Hurd's sales and execution savvy on the Sun deal alone is worth his salary. Look for Hurd to make a big impact quickly on the Sun integration efforts. That's no small matter given that Oracle is pushing a vertically integrated technology stack optimized on Sun hardware.

Expect some cost-cutting, an expanded Sun product line and a lot more sales focus on the Sun product line from both the Sun direct sales force and the Sun channel. Look for Sun hardware sales to soar under Hurd.

Hurd Is Channel Strong

Hurd understands channel economics. That's because he's a numbers-oriented CEO who knows that you can drive bigger sales volume at a lower cost with a strong channel than you can with a direct sales force. It's all about scale and market reach and impact.

Ellison has never been a big believer in the channel, opting to pay his direct sales force fat commissions for driving sales growth. Look for that to change under Hurd.

Today only about 43 percent of Oracle's $27 billion in annual sales come from the channel. Look for that number to soar to well over 50 percent under Hurd's channel strong leadership. That means more bang for the sales buck for Oracle and a bigger payoff for Oracle shareholders.

Hurd's Customer Relationships = Oracle Sales Gains

There is no CEO in the technology business that has spent more time with more customers in the last five years than Mark Hurd.

Sales is all about customer relationships. It's about making promises and then delivering on those promises. That's Hurd's forte.

Look for Hurd to take a lot of customers that bet big on HP and move them into the Oracle camp. It's not a long walk given that hardware is a commodity and software is the business driver.

When all the numbers are added up years from now reflecting Hurd's impact on Oracle, that $950,000 and $10 million bonus is sure to be considered one of best investments that Oracle CEO Larry Ellison ever made.