Maybe you're not convinced. Well let me leave you with one example, as food for thought. This is a story of HP and Oracle. In the 1980s, HP was primarily a hardware manufacturer, and Oracle was an up and coming software developer. Now, between Hewlett-Packard's scientific and business target markets and Oracle software for enterprise resource planning, customer relationship management, and supply chain management, it was a partnership made in heaven. Together, they want over a 140,000 customers across various industries in what seemed to be an unshakable alliance. The pie had truly expanded for both firms and life was good. The pair was strongly committed to each other and reaping the benefits of that commitment. Over the next 20 years, the high-tech industry would explode as dominant technologies and players emerged and remained. In early 2009, Oracle became interested in Sun Microsystems, after learning that Intel was looking to acquire it. Sun manufactured hardware and software. Oracle and HP considered the purchase of Sun Microsystems together. Now if this purchase was executed, Sun's hardware assets would have gone to HP and it's software assets to Oracle. At the same time, HP had seen oracle server business slip and was beginning to question its usefulness as part of HP's hardware business. So you see, discernment has already started to enter this blissful union. Ultimately, HP decline the opportunity. So in a stunning and aggressive move in April 2009, Oracle acquired all of Sun Microsystems on its own with the winning bid of 7.4 billion. Even though top management at Oracle beliefs Sun's hardware business was a dog. Now Oracle is positioned in direct competition with HP, and this was a major blow to HP, which certainly did not expect their rejection of the Sun acquisition offer to result in this level of response, particularly from a 25-year partner. HP and Oracle became frenemies. Now, a cyclical view of relationships would suggest that the pair should be able to recover, to renegotiate a new equilibrium, and once again create mutual benefits. Let's forgive and forget and let bygones be bygones. Instead, in 2010, HP fired Chief Executive, Mark Hurd, for his decision not to assist in the Sun acquisition. In a surprising response, Oracle then poached Hurd, from HP within weeks. They appointed him co-president, and this added insult to injury. Unsurprisingly, HP sued Mark Hurd, believing that he would use his breadth of insider information against HP. In other words, relationship deterioration was full-blown and spiraling downward. Ultimately though, the firm's reached a settlement and agreed to work together as they had before the Hurd ordeal. Now, a more cyclical view of relationships would again suggest that the relationship should recover and reconfigure to a new and adapted state. The partnership should then persist over time, ultimately better off as new efficiencies are discovered and exploited and equity is reestablished. But this is frequently not what happens. Settlements, typically serve more as a cease fire than a state of healing. The partnership is damaged and like water in a bathtub, the trust that had been carefully built over time is quickly drained. Distrust is rampant, suspicions are high. In short, the pair enters a state of deterioration and this pattern is consistent with a life cycle or linear view of relationships that we discussed, where the dyad marches on and the exchange worsens. In other words, you can't go back. The HP and Oracle story does not end there. In September 2010, HP starts the plot of controversy by hiring two well-known enemies of Oracle. Former Oracle executive, Ray Land, and former SAP Chief, Leo Apotheker. Now, it's doubtful that this would have happened without the Sun Microsystems Mark Hurd drift. The clear implication is that the past is not easily forgotten. Partner wounds do not heal quickly and the consequences of past decisions are not frictionless. The hiring of Oracle's arch enemies was likely a response to the problematic history. Although the firms announced their intention to stick together and make things work, that history produced an enmity that proved unshakable. This is what happens when relationships regress.
