Citing Intel's Itanium phase-out, Oracle described the chip as a "declining product. HP is trying to force Oracle to support a technology, Itanium, that Oracle does not believe in."
Oracle has spent a great deal of time and attorney's fees in court
the last year and a half, battling with longtime European competitor SAP for weeks in late 2010
and just a week ago concluding a two-years-in-the-making, six-week-long court date with Google
Both were over copyright infringement, and Oracle was the plaintiff
in each. Oracle is batting .500 here, prevailing in the clash with SAP
involving stolen software and losing against Google over fair use of
Java application programming interfaces in building the Android
Now the plaintiff is Hewlett-Packard, and the issue at hand is this: Did Oracle violate contract agreements
when it decided to stop making new versions of database software for
Intel's Itanium processors that HP uses in its servers? HP, fairly sure
something is amiss, is asking for damages totaling about $4 billion.
A Different Bit of Drama in This Case
This case, however, has a different aspect of drama to it, in that
former HP CEO Mark Hurd directly affects the original deal with Oracle,
and now he's a co-president of Oracle. It doesn't help matters that he
was forced to resign from HP in August 2010
following a sexual harassment charge involving a contract employee,
which won't assuage his overall attitude toward his former employer.
Santa Clara Superior Court Judge James Kleinberg will decide the
first phase of the trial on his own. Phase 1 will focus specifically on
whether there is a viable contract between HP and Oracle. If Judge
Kleinberg decides the original contract stands, a jury then will decide
whether Oracle violated the contract, and figure out what damages are
On Day 1 of the trial in state Superior Court in San Jose, Calif., HP
attorney Jeffrey Thomas contended in his opening statement that Oracle
"clearly violated a contract with HP" when it decided it would cease
developing new versions of its database software compatible with HP's
Itanium-based servers, in which the company has invested many millions
Later, in his own opener, Oracle lawyer Dan Wall said that HP is
reading too much into the agreement, and that Oracle never told HP it
would stay committed to Itanium.
Oracle decided in March 2011 to stop developing software for Itanium
stating that Intel made it clear the processor was being phased out and
that it was shifting its main focus to x86 Xeon chips.
HP, however, claims that Oracle had agreed to support for Itanium on a
continuing basis, because without the database updates the servers
running the chip would become obsolete. HP said that commitment was
affirmed when it settled a 2011 lawsuit regarding Oracle's hiring of
HP's Thomas said the Hurd settlement clearly committed Oracle to
continue supplying its best products to HP, and that those would include
Oracle Database updates. "It is impossible to offer best products going
forward without porting new versions of those products," Thomas said, according to Reuters
Oracle's Wall replied that the Hurd settlement was aimed only to
settle employment litigation that HP had brought against Oracle. "That
agreement was not backed by the kind of painstaking negotiation that
takes place over a strategic business partnership," Wall said.
Citing Intel's Itanium phase-out, Wall described the chip as a
"declining product. HP is trying to force Oracle to support a
technology, Itanium, that Oracle does not believe in," Wall said.
HP's Livermore Called as First Witness
Following opening statements, the court brought its first witness:
former HP Senior Vice President Ann Livermore, now a member of the
company's board of directors. Livermore was HP's highest-ranking
negotiator with Oracle when the Itanium deal was signed.
Livermore testified that Oracle Co-President Safra Catz had
"reassured" her that after Oracle bought Sun Microsystems in January
2010 that Oracle's software sales would be "platform neutral." Oracle
had not been in the hardware business before buying Sun and had relied
on suppliers such as HP, Sun, Dell and others to make the data center
equipment powerful enough to run its parallel databases, middleware and
"She said they were going to continue to support HP," Livermore told
the court, adding that Catz repeated the same statement in a larger
meeting between executives from both companies. But after Hurd joined
Oracle in late 2010, HP became concerned, Livermore said.
"I was concerned that Mark was leaving HP with ill will toward HP. My
concern was that he knew our financials. He also knew our dependence on
Itanium; he knew lots and lots of things," Livermore said.
Livermore is expected to continue her testimony June 5.
Chris Preimesberger is eWEEK Editor for Features and Analysis.