WHEN: Today, Wednesday, October 26th
WHERE: CNBC's "Closing Bell"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Oracle Co-CEO Mark Hurd on CNBC's "Closing Bell" (M-F, 3PM-5PM ET) today, Wednesday, October 26th. Video will be available on CNBC.com.
All references must be sourced to CNBC.
EVANS: THE CLOUD WARS ARE ALIVE AND WELL AMONG SILICON VALLEY TECH GIANTS JUST LAST MONTH ORACLE'S EXECUTIVE CHAIRMAN LARRY ELLISON TOOK THE STAGE AT THE COMPANY'S OPEN WORLD CONFERENCE AND CRITICIZED AMAZON WEB SERVICES ONE OF ITS BIGGEST COMPETITORS IN THE CLOUD SPACE, OF COURSE. THE EMERGENCE OF AMAZON HAS PUSHED ORACLE TO GROW ITS CLOUD EXPOSURE, LEADING TO A POTENTIAL TAKEOVER DEAL WITH NETSUITE WHICH HAS AN APPROVAL DEADLINE OF EARLY NEXT MONTH. JOINING US NOW MARK HURD, THE CEO OF ORACLE. WELCOME.
HURD: THANKS, KELLY.
EVANS: WHERE DO THINGS STAND IN THE NETSUITE DEAL? A DONE DEAL THERE'S BEEN SOME ISSUES WITH THEIR INVESTORS WANTING A LITTLE BIT MORE ON PRICE?
HURD: IT'S DONE FROM OUR PERSPECTIVE. WE HAD SPECIAL BOARDS, SPECIAL COMMITTEES OF BOTH BOARDS NEGOTIATE THE TRANSACTION. WE THINK WE'VE MADE A FAIR OFFER OF $109 A SHARE. THE TENDER OFFER EXPIRES NOVEMBER 4, I BELIEVE. IT'S OUR BEST AND FINAL OFFER.
EVANS: AND THE EARNINGS WERE JUST A LITTLE BIT PATCHY.
HURD: YEAH. BUT I WANT TO REITERATE, IT'S OUR BEST AND FINAL OFFER. WE'LL ABIDE BY WHAT THE SHAREHOLDERS SAY. IF THE SHAREHOLDERS DON'T WANT TO TEND TO THEIR SHARES, WE'LL MOVE ON TO OTHER THINGS.
EVANS: THAT'S PART OF YOUR STRATEGY TO TAKE ON AMAZON, CORRECT? BECAUSE NETSUITE MAYBE A SMALLERT MEDIUM SIZED ENTERPRISES HOW MUCH MORE DO YOU GUYS HAVE TO DO IN ORDER TO COMPETE AT THE SCALE OF AMAZON?
HURD: I WOULD SAY IT A BIT DIFFERENTLY, KELLY. NETSUITE IS MORE A APPLICATIONS COMPANY, SO IT REALLY HELPS US ON THE SAS PART OF THE CLOUD.
EVANS: SOFTWARES AS A SERVICE.
HURD: EXACTLY. SO SOFTWARE AS A SERVICE TYPICALLY MEANS SO THERE IS REALLY 3 LAYERS TO THIS CLOUD THERE ARE APPLICATIONS, PLATFORMS AND INFRASTRUCTURE. AMAZON IS MORE OF AN INFRASTRUCTURE IAAS PLAYER. IT IS NOT AN APPLICATION OR INFRASTRUCTURE. THE NETSUITE WOULD BE MORE OF AN APPLICATIONS PLAY.
EVANS: I'VE SEEN CHARTS WHEN THEY LAY OUT THE BIGGEST PLAYERS IN THE CLOUD. IT'S THE TYPICAL IT'S AMAZON, IT'S GOOGLE, IT'S IBM, IT'S MICROSOFT. THEN I SEE ORACLE AND EVERYBODY ELSE. ARE YOU TRYING TO CHANGE THAT OR ARE YOU FOCUSED MORE TACTICALLY ON THE SERVICES YOU ARE OFFERING?
HURD: KELLY, LET ME PUT IT THIS WAY. WE'VE BOOKED MORE IN THE CLOUD, IF YOU WILL, REVENUE THAN ANYBODY ELSE IN THE INDUSTRY LAST YEAR. THE CLOUD INDUSTRY HAS PROBABLY GROWN 45, 50%. LAST QUARTER WE CLOCKED IN AT 80% PLUS. SO OUR GROWTH RATE IS PRETTY HIGH, DRIVEN A LOT BY APPLICATIONS AND BY PLATFORMS. SO WE'RE REALLY HAPPY WITH OUR GROWTH IN THE CLOUD. WE THINK WE CAN ACTUALLY DO YET BETTER, AND THIS ANNOUNCEMENT YOU REFERRED TO EARLIER THAT LARRY MADE IN OPEN WORLD WAS REALLY ABOUT ROUNDING OUT OUR COMPLETE SUITE OF CAPABILITIES WITH INFRASTRUCTURE AS WELL.
EVANS: MICROSOFT HAS GONE AND BOUGHT LINKEDIN. THAT DEAL MAKE SENSE TO YOU?
HURD: LISTEN, I'VE GOT MY OWN ISSUES, I'M NOT GOING TO COMMENT ON MICROSOFT'S M&A.
EVANS: WHAT ABOUT A COMPANY LIKE TWITTER, WHICH IS STILL OUT THERE. WOULD TWITTER BE A GOOD STRATEGIC FIT FOR YOU GUYS?
HURD: WE ARE – I DO NO – I'M SURE YOU'RE EXPECTING ME TO GET INTO ALL SORTS OF M&A DISCUSSION, BUT NO, WE'RE NOT MAKING A BID FOR TWITTER RIGHT NOW.
EVANS: LET ME PUT IT A LITTLE BIT MORE BROADLY, THEN. IS THERE A PLACE FOR SOCIAL NETWORKS IN YOUR COMPANY?
HURD: YOU KNOW, I THINK FOR US, WE'RE REALLY FOCUSED ON THE ENTERPRISE. WE'RE REALLY B2B. SO KELLY, WE FOCUS ON OUR CUSTOMER SET, WHICH IS REALLY NOT CONSUMERS. SO THE CONTEXT FOR US OF WEAVING TOGETHER ENTERPRISE DATA, ENTERPRISE INFORMATION, APPLICATIONS PLATFORM AND INFRASTRUCTURE IS WHERE WE'RE FOCUSED. THE BEST PREDICTOR OF OUR FUTURE BEHAVIOR IS REALLY WHAT YOU'VE SEEN FROM US OVER THE PAST COUPLE OF YEARS. I WOULD ARGUE THAT WHILE SOME OF THESE ANNOUNCEMENTS SEEM NEWSWORTHY, IN MANY RESPECTS, THEY ARE JUST FURTHER ADVANCEMENTS OF THE STRATEGY WE LAID OUT SEVERAL YEARS AGO. LARRY, REALLY, IF YOU DIAL BACK TO A DECADE AGO, WAS TALKING ABOUT CLOUD BEFORE IT WAS CALLED CLOUD. AND SO REALLY, ALL OF THESE ANNOUNCEMENTS THAT FIT INTO THE STRATEGIC FRAMEWORK WHICH IS REALLY FOR US TO BE ABLE TO PROVIDE OUR CUSTOMERS AND ENTERPRISES WITH A COMPLETE SET OF CLOUD OFFERINGS.
EVANS: AND WHEN NETSUITE, AS YOU JUST SAID, BEING YOUR BEST AND FINAL OFFER –
HURD: BEST AND FINAL.
EVANS: BEST AND FINAL. WHAT HAPPENS IF THAT DOESN'T COME THROUGH FOR WHATEVER REASON, THEN? IS THERE A PLAN B? ARE THERE MANY PLAN B'S?
HURD: WE WILL MOVE ON TO OTHER THINGS. WE'RE GOING TO MOVE ON TO EXECUTING OUR STRATEGY. LISTEN, WE'LL ABIDE BY WHAT THE SHAREHOLDERS SAY. BUT AGAIN, WE HAVE SO MANY THINGS TO DO, SUCH A GREAT PORTFOLIO. IT'S AN EXCITING TIME FOR US. THIS IS A GENERATIONAL CHANGE IN IT. WE'RE NOT GOING TO SEE THIS COME AROUND AGAIN. OUR PART OF IT, IF YOU WILL, THE ENTERPRISE SIDE, IS ABOUT A TRILLION-DOLLAR INDUSTRY. ONLY ABOUT 40, 50 BILLION OF THAT IS YET SO FAR IN THE CLOUD. THERE IS A LOT TO COME.
EVANS: I WAS JUST GOING TO MENTION, MARC BENIOFF HAD SAID HE'S LOOKED AT HUNDREDS OF COMPANIES AND NEVER HAD A LEAK BEFORE. REFERRING TO THE DOCUMENTS – AND WE ALL NOW HAVE BEEN ABLE TO SEE ABOUT THEIR POTENTIAL TARGETS. ARE YOU CONCERNED ABOUT CYBER SECURITY BROADLY SPEAKING, JUST IN YOUR DAY-TO-DAY OPERATIONS, OR AS PART OF THE ENTERPRISE MOVE THAT YOU'RE DESCRIBING?
HURD: IT'S ABOUT AS IMPORTANT TO US AS ANYTHING ELSE WE DO. WHEN YOU LOOK FROM A SECURITY PERSPECTIVE, THE WAY WE PATCH OUR DATA, THE WAY WE SECURE DATA, THE WAY WE HELP OUR CUSTOMERS SECURE DATA, IT IS ABOUT AS PREVALENT A SUBJECT AS THERE IS OUT THERE WITH CUSTOMERS TODAY.
EVANS: YEAH, I IMAGINE YOU GUYS ARE DOING EVERYTHING YOU CAN TO MAKE SURE YOUR EMAILS AND PRESENTATIONS AREN'T THE NEXT ONES LEAKED OUT THERE.
HURD: ENTERPRISE DATA, KELLY. I MEAN, SERIOUSLY, SOME OF THE MOST IMPORTANT DATA SITS IN OUR CUSTOMERS' DATABASES AND IT'S OUR JOB TO HELP THEM SECURE.
EVANS: ABSOLUTELY. MARK, THANKS FOR JOINING US DOWN HERE.
HURD: THANKS, KELLY.
EVANS: MARK HURD, CEO OF ORACLE.
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