Oracle's HP-Bashing Could Backfire

Could Larry Ellison's efforts to drag new HP CEO Leo Apotheker into Oracle's legal battle with SAP ultimately backfire?
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REDWOOD SHORES, Calif. (

TheStreet

) -- Could Larry Ellison's efforts to drag new

HP

(HPQ) - Get Report

CEO Leo Apotheker into

Oracle's

(ORCL) - Get Report

legal brawl

with

SAP

(SAP) - Get Report

ultimately backfire on the database giant?

Even by his own standards, Ellison has been particularly belligerent recently, launching blistering verbal attacks on former SAP CEO Apotheker, who started his new gig at HP earlier this week. Oracle is

locked in a court battle with SAP

, seeking substantial damages for software theft. Although the German software firm has admitted its wrongdoing, Ellison remains on the warpath, repeatedly accusing Apotheker of overseeing the theft during his time as SAP CEO.

Larry Ellison, Oracle CEO

The fiery Oracle chief has also attacked HP, speculating that the computer maker will keep Apotheker away from its Palo Alto headquarters -- outside the court's jurisdiction -- to escape a subpoena. HP, in turn, has accused Oracle of harassment.

"I think that the level of rancor in some of Larry Ellison's public comments and the aggressiveness

Oracle is pursuing this with seem out of balance with the level of misdeeds that were done," Charles King, principal analyst at tech research firm

Pund-IT

, told

TheStreet

. "That level of vituperative rhetoric could risk damaging the relationship that HP and Oracle have."

Although longstanding partners, the two firms have had some rocky times recently, most notably when Ellison appointed ousted HP chief Mark Hurd as Oracle co-president. HP quickly slapped Hurd with a lawsuit for threatened misappropriation of trade secrets, prompting some fierce saber-rattling from the Oracle CEO, although the two companies

seemed to kiss and make up.

The recent turn of events has left many tech watchers puzzled, particularly given that a large number of Oracle databases run on HP gear.

"Even in the most extreme circumstances, whatever Oracle has to gain from SAP seems to be a pittance compared to what they have to lose with HP," he said. "There are other database options out there and, depending on how ugly Oracle decides to get, HP may decide that it's worthwhile to investigate and help customers investigate alternative databases."

Oracle is seeking more than $2.3 billion in damages from SAP, although the German firm has said that a settlement in the tens of millions of dollars, at most, would be fair.

Broken relationships in the tech sector, are, of course, nothing new. HP was quick to attack its longtime buddy

Cisco

(CSCO) - Get Report

when the networking giant stepped on HP's toes and started selling servers last year.

Apple

(AAPL) - Get Report

and

Adobe

(ADBE) - Get Report

are two longstanding partners that, following the Apple CEO's less-than-flattering characterization of Adobe's Flash technology,

no longer see eye to eye

.

"Relationships change over time, especially in an industry like high-tech," said King. "Companies are looking at each other over the coffee table in the morning and saying 'I don't recognize you any more.'"

Laura DiDio, principal analyst at research firm

ITIC

, warned that Oracle also risks being distracted by its high-profile battles with HP and SAP. "This is turning into a spectacle like the Roman Coliseum; Larry is not content to compete with rivals, it seems like he wants to grind them dust," said DiDio. "They are trying to prove a point, clearly, but I think what is getting lost in all this is the impact on customers, products and services."

DiDio cites the toll taken on

Microsoft

(MSFT) - Get Report

by its antitrust battle with the Department of Justice in the late 1990s and says that Oracle needs to be careful not to follow the software giant's lead. "We saw that the Microsoft product rollout slipped, and Microsoft was knocked off its game on the Internet," explained DiDio.

Oracle also has a robust M&A strategy to focus on. The database maker recently

spent $1 billion to acquire e-commerce specialist Art Technology Group (ARTG)

, and closed its $7.4 billion acquisition of

Sun Microsystems

earlier this year.

"When you're buying all these companies, you have to focus on assimilating them," said DiDio. "Customers wonder about things like 'what about my service and support, what's going to happen to the company's engineers, the product managers, and what about the volume licensing contracts?'"

But the barbs just keep coming.

Oracle took yet another swipe at Apotheker and HP on Wednesday: "Hewlett Packard has refused to accept service of a subpoena requiring Mr. Apotheker to testify about his role in SAP's illegal conduct," said an Oracle spokeswoman in an e-mail to

TheStreet

. "Mr. Apotheker started work for HP on Monday, but it now appears that the HP Board of Directors has decided to keep him away from HP's headquarters and outside the court's jurisdiction."

Oracle, she added, will continue to try to serve the subpoena. HP countered by repeating its statement that Oracle had ample opportunity to question Apotheker during a sworn deposition in October 2008, when he was still at SAP.

Oracle chose not to include him as a live trial witness until he was named CEO of HP," added an HP spokeswoman, in an email to

TheStreet

. "Given Leo's limited knowledge of and role in the matter, Oracle's last-minute effort to require him to appear live at trial is no more than an effort to harass him and interfere with his duties and responsibilities as HP's CEO."

Oracle declined to provide comment on this article.

--Written by James Rogers in New York.

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