Is Oracle Vying to Acquire HP?

                        

With HP's strong presence in the hardware and server market, Oracle can leverage it to gain access into network, storage and server domains.                     

Hewlett-Packard and Oracle announced a truce over Mark Hurd's appointment as co-President on Tuesday, with HP saying that it was now sure Hurd "will adhere to his obligations to protect HP's confidential information" as Oracle's president.

The lawsuit that was filed immediately after Hurd was appointed co-president in Oracle, to block Hurd's move citing compromise of trade secrets as primary reason, giving credence to the fact that HP feared disclosure of critical secrets.

However, with Oracle's ambition to become a one-stop shop for enterprise level software and hardware, Hurd's appointment could actually fuel speculation that Oracle CEO Larry Ellison could be eyeing HP itself.

"Larry Ellison is borderline bat-shit crazy on a good day," says veteran Silicon Valley analyst Rob Enderle, a principal analyst at the Enderle Group, in a piece last week by Sam Gustin -- a senior writer at DailyFinance, an AOL Finance & Money site.

He further added that "Ellison believes he can do anything, and he wants to go after IBM, if he can figure a way out to get HP, then I believe he would like to do that. Because he would really like to bring IBM out, and he needs a company of the stature of HP to do it."

Though the gargantuan merger of the two companies seems impossible in theory, the clubbing of the companies can surely challenge IBM's hegemony.

With Larry Ellison being a champion of the theory that the IT sector will see consolidation similar to the auto industry which would give rise to two or three big players like GM, Ford and Chrysler, the HP acquisition may be up his agenda.

Oracle has left industry watchers convinced about its plans to add hardware capabilities with its acquisition of Sun Microsystems. With HP's strong presence in the hardware and server market, Oracle can leverage it to gain access into network, storage and server domains.

Oracle has built a portfolio of products across database, server and storage systems, middleware, industry solutions and applications, and all through acquisitions. Oracle acquired close to 65 companies big and small since 2005 to create a stack of enterprise software across these domains.

The greatest glitch in such a merger is the complexity of integration of the two giants. And it could be addressed by Mark Hurd's presence.

In spite of the merger benefits, questions whether a $130 billion company like Oracle can vie for a $90 billion HP are in circulation. Thus Oracle can attempt to damage HP enough till its value reduces. In fact, with Mark Hurd's departure HP lost $15 billion in value as its share price dipped from $46.30 on Aug. 6 to $39.92, Techcrunch reported.

Source: http://www.msnbc.msn.com/id/39305937/ns/business-motley_fool/