Oracle Makes Music While HP Burns

NEW YORK (TheStreet) -- Big technology buyers don't wait for vendors to get their acts together. They change vendors.

After a year on the job for CEO Meg Whitman, Hewlett-Packard ( HPQ) announced this week that internal and economic turmoil would delay a turnaround until at least 2014, as Philly.com reported.

For investors, it means another year of divestitures, firings and cost savings used to maintain a shrinking bottom line. Product lines will be pared, as Gigaom reports. Cadillac brands will be put on Chevy Vegas, as Digital Trends notes.

While cloud computing is making big servers obsolete, HP is going to be making higher-priced ones, as Seeking Alpha reports.. The internal civil war will continue, with Whitman purging her political opponents.

But this isn't General Motors ( GM). This isn't 1975. This is technology, which in 2012 evolves in Internet time. If you can't give me a sense of direction, buyers figure, they will go somewhere else.

Increasingly, that somewhere else is Oracle ( ORCL), where former HP CEO Mark Hurd now reigns as co-president and CEO in waiting. He was at the company's OracleWorld show this week with what he told ZDNet is a "holistic" strategy aimed at evolving enterprises toward cloud computing.

Like HP, Oracle wasn't ready for the cloud. Like HP, Oracle makes its money in what is called "enterprise computing," selling expensive servers and proprietary software.

But unlike HP, Oracle has a way, it says, to get its customers across the gap between today and tomorrow.

Information Week reports that 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.

Oracle Exadata and Exalogic hardware may be more expensive than commodity cloud servers, but they run the applications enterprise customers know, Oracle applications, and customers will be encouraged to call them a "private cloud."

As to real cloud applications like those of Salesforce.com ( CRM) Oracle is spreading Fear, Uncertainty and Doubt, a potent brew if used sparingly to fill small gaps between promises and reality. Hurd is also promising what ITWeb describes as a "social media suite" that will maintain central control over employees' social computing activities.

All this means that Oracle earnings plow ahead, turning over one-third of its revenue into free cash flow, as Daily Finance notes, leaving HP in its dust.

I am no Oracle fan. I find what Oracle does overpriced. I don't think it's a real cloud. But for big enterprises that are already Oracle customers, the company is offering a reasonable path toward the future, while HP offers nothing.

As always, the bottom line is the bottom line. HP has annual sales of $127 billion against Oracle's $37 billion. But Oracle's market cap is now $153.7 billion and rising, HP's is $29.2 billion and falling. Who is not to say that, once HP downsizes a little more, Hurd won't make Whitman's board a buy-out offer they can't refuse?

At the time of publication, the author had no positions in any of the companies mentioned in this article..

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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