Kara Swisher

Recent Posts by Kara Swisher

HP Chairman Lane Smacks Back at NYT's Nocera: The Poison Pen Letter!

Who would have thought that the enterprise business would be this interesting?

But the continuing mishegas between Hewlett-Packard (HP), Oracle (ORCL) and the controversial move between the companies by exec Mark Hurd has now dragged in the New York Times (NYT).

Specifically, its star business columnist Joe Nocera, who penned a scathing piece a few days ago about the recent appointment of former SAP (SAP) top exec Léo Apotheker as CEO of HP to replace Hurd.

Wrote Nocera, as he wound up his fastball:

“Still, having written two unflattering columns recently about the H.P. board, I was inclined to take a pass on Mr. Apotheker’s hiring. But then I learned something about him that caused me to shake my head in disbelief.”

The thrust of Nocera’s column about a lawsuit over intellectual property theft between SAP and Oracle: Don’t throw stones at Hurd when you have such a dirty glass house.

But I am synopsizing, so here is the letter incoming HP chairman Ray Lane–who, by the way, once worked as president at Oracle until he and CEO Larry Ellison had a falling out.

You know, the non-shy and non-retiring Larry Ellison who has been sending constant verbal stink bombs over to the HP board of late–most recently at Apotheker–and who hired Hurd.

Folks, you cannot make this stuff up.

Here’s Lane’s letter (I removed all the email addresses) to the Times:

From: Ray Lane
Sent: Monday, October 11, 2010 8:59 AM
Subject: Letter to the Editor, NY Times

To the Editor:

Joe Nocera’s column, “A Double Standard at H.P.,” (October 9, 2010) grossly mischaracterizes the facts about why Mark Hurd had to leave HP, why the HP Board hired Léo Apotheker as CEO and the reason Oracle is trying to draw Mr. Apotheker into its lawsuit over TomorrowNow.

First, the lawsuit on TomorrowNow: Mr. Nocera concedes the suit between Oracle and SAP (and its now-shuttered subsidiary, TomorrowNow) is old news. Oracle has been litigating this case for years and has never offered any evidence that Mr. Apotheker was involved. It didn’t even deem him relevant enough to the case to include him on a list of witnesses for trial–until, that is, Mr. Apotheker was named CEO of HP and Oracle had other motives to try to tie him to the case.

The facts are: TomorrowNow was never under Mr. Apotheker’s supervision. The conduct in question at TomorrowNow occurred before Mr. Apotheker became CEO of SAP. And, it was Mr. Apotheker who, as CEO of SAP, shut down TomorrowNow. Mr. Nocera’s reporting on the case is sharply contradicted by that of an independent industry analyst–someone with real knowledge of the industry and the facts–who makes clear that Mr. Apotheker was not involved (http://ematters.wordpress.com/2010/10/09/setting-the-record-straight-oracle-sap-tomorrownow-and-the-nyt/).

As for the reasons why Mr. Hurd left HP: no Board can retain a CEO who violates the trust and integrity needed to lead a public company. Even Mr. Hurd publicly acknowledged that he failed to uphold those necessary standards. In the press release announcing his departure, he said that “… there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP…I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time.” (Emphasis added.)

The bottom line is: Mr. Hurd violated the trust of the Board by repeatedly lying to them in the course of an investigation into his conduct. He violated numerous elements of HP’s Standards of Business Conduct and he demonstrated a serious lack of integrity and judgment. The Board was unanimous in its decision that he must go, including the seven directors Mr. Hurd recruited to the Board. These directors would not have acted unanimously to remove Mr. Hurd for “piddling expense account problems” as Mr. Nocera suggests. I was named to the Board after Mr. Hurd’s departure, but having carefully reviewed all the facts, it is clear to me the HP Board made the right decision. Had I been on the Board at that time, there’s no question I would have voted the same way. The Board simply had no alternative.

In hiring Léo Apotheker, HP’s Board turned to a principled leader of outstanding personal and professional integrity. He is an experienced, strategic thinker with the passion, global experience and operational discipline to realize our company’s enormous potential. Those are the qualities HP needs in a leader to move the company forward, and Mr. Apotheker is ideally suited to do that.


Ray Lane
Incoming Non-Executive Chairman of the Board of Directors

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik