implication

Bits Blog: The Oracle-H.P. Rivalry, PowerPoint Version

A slide about Autonomy posted by Oracle.

Did information technology just run afoul of disinformation technology?

The computing giants Oracle and Hewlett-Packard, known for trash talking each other and for fighting in court, took their sniping to the Internet on Wednesday when Oracle charged that the British software company Autonomy, which H.P. is buying for $10.2 billion, tried to sell itself to Oracle last April. Oracle said it was not interested, since the $6 billion market value Autonomy had at the time was still far more than Autonomy was worth.

The implication was that H.P. came in second, and is foolish, in buying Autonomy.

Oracle even posted a series of slides on its Web site that it said showed that Mike Lynch, Autonomy’s chief executive, intended to sell his company. The slides, Oracle said, were “all about Autonomy’s financial results, Autonomy’s stock price history, Autonomy’s Price/Earnings history and Autonomy’s stock market valuation.” Oracle also said Mr. Lynch showed up at the meeting with “Silicon Valley’s most famous shopper/seller of companies, the investment banker Frank Quattrone.”

Mysteriously, those slides, which were widely commented on in the industry press Thursday, were posted for only about 12 hours. Then they disappeared. A few hours later they were back. It seems there is less there than Oracle intended. Here’s what I learned.

Oracle continued to publish a page that said Mr. Lynch came by for talks with Mark Hurd, Oracle’s co-president, and Doug Kehring, who is in charge of mergers and acquisitions at Oracle. For his part, Mr. Lynch acknowledged the meeting, but said it was just a customer visit that Mr. Quattrone organized. Why he was meeting the head of mergers was not explained.

Upon request, Oracle sent The New York Times the slides, which it said were sent from Qatalyst Partners, the investment bank headed by Mr. Quattrone, not Autonomy, in January. That backs up Autonomy’s assertion that Oracle had lifted an older slide deck from Mr. Quattrone to make Mr. Lynch look bad — Mr. Quattrone wasn’t even working for Autonomy then.

So what is going on here? Did Mr. Lynch try to sell Autonomy to Oracle, or did Oracle post the story and slides to make H.P. look bad? This may be a little bit of both. Mr. Lynch did talk to Oracle’s head of M.A. before he took the H.P. deal, and Oracle’s cleverly worded description of the meeting makes it look as if he went into a lot more detail than he would like to admit. The deck looks like a bit of extra “evidence” that Oracle later withdrew.

Mr. Lynch probably set off Oracle’s outburst with his recent statements that Larry Ellison, Oracle’s chief executive, was lying about whether Oracle’s software could do the same kinds of things Autonomy’s software. Not that it took a lot to get Oracle started: in the last year, Mr. Ellison has publicly criticized H.P.’s board for firing Mr. Hurd, his friend and tennis partner, and then hired Mr. Hurd himself. The hiring provoked H.P. to file a lawsuit against Mr. Hurd, which was quickly settled. Another lawsuit between H.P. and Oracle, over Oracle’s decision to discontinue software development on one of H.P.’s advanced chips, is still going on.

In between the lawsuits, Mr. Ellison said Léo Apotheker, Mr. Hurd’s replacement, conducted industrial espionage against Oracle when he was running SAP. (Though SAP settled that suit and admitted wrongdoing, it said Mr. Apotheker was not involved in the incidents.)

Only one thing is nearly certain in this name-calling mess: Meg Whitman, who took over at H.P. when Mr. Apotheker was fired last week, will not be on stage for hugs and camaraderie when Mr. Ellison kicks off Oracle’s big trade show in San Francisco on Sunday evening.

Or, as one observer involved in the cross-company slinging put it: “Oracle used Autonomy to give H.P. a poke in the eye. It just got ridiculous.”

Article source: http://feeds.nytimes.com/click.phdo?i=c89846c8bf583fb26f632397d3263974

Economix: Geography, Income and Religion

In response to my column on religion and income (and my follow-up post on Economix), several readers have asked whether geography plays a big role. As one reader wrote, “Jews (and Asians) live primarily on the coasts, where above average incomes are earned (and needed).” The implication here is that Jews and Hindus aren’t the most affluent religions largely because they’re the most educated; according to this view, much of their affluence instead stems from the fact that they tend to live in expensive, high-income metropolitan areas, like New York, San Francisco, Washington and Boston.

I think this argument mixes up cause and effect. New York and San Francisco are not expensive cities because of something in the local water or some random factor. They are expensive cities because a lot of people making high incomes live there. And the No. 1 reason those cities have so many high-income people is that they have so many highly skilled, highly educated and thus highly productive workers.

Yes, it’s true that not all of the cost-of-living difference stems from difference in productivity. If you took typical workers from an inexpensive city and told them to find new work in San Francisco, they probably would receive a raise — even though their qualifications would obviously have been the same in the two places. But even this difference stems in part from the higher productivity of urban workers.

Here is Edward L. Glaeser — Harvard professor, economic-growth expert and former contributor to this blog — writing in his recent book, “Triumph of the City”:

Recent research also finds that productivity is significantly higher for firms that locate near the geographic center of inventive activity in their industry…

Workers in big cities earn about 30 percent more than their nonurban equivalents, but people who come to urban areas don’t experience higher wage gains overnight.

Year-by-year, workers in cities have higher wage growth, as they accumulate the skills that make them successful.

Wage growth is particularly faster in cities with more skilled workers. Two decades of extra job-market experience is associated with 10 percent more wage growth in skilled metropolitan areas than in nonmetropolitan America, but only 3 percent more wage growth in less skilled metropolitan areas.

New Yorkers and San Franciscans aren’t richer because they happen to have chosen to live in expensive cities. New York and San Francisco are expensive largely because they have attracted so many highly productive jobs. As Mr. Glaeser and other economists have pointed out, nothing breeds productivity quite like education.

Article source: http://feeds.nytimes.com/click.phdo?i=fac189a362f85303e157383e06aeef1e

Bits Blog: The Oracle-H.P. Rivalry, PowerPoint Version

Economix: Geography, Income and Religion

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