HP, Oracle Set for Trial in Bitter Feud Over Intel's Itanium

By Jeffrey Burt  |  Posted 2012-05-31

HP, Oracle Set for Trial in Bitter Feud Over Intel's Itanium

Oracle, fresh off its high-profile patent fight against Google, is heading back to court again, this time in its dispute with former partner Hewlett-Packard over the future of Intel€™s high-end Itanium processor platform.

Jury selection at Santa Clara County Superior Court in San Jose, Calif., is scheduled to begin May 31 in the case, which stems from Oracle€™s decision last year to end software development in support of Itanium, Intel€™s controversial chip architecture that powers HP€™s high-end Integrity and NonStop server platforms.

Oracle executives have said the decision came after learning from Intel engineers that the giant chip maker was planning to end development of Itanium in favor of its x86-based Xeon server processors. Officials with both HP and Intel have disputed that claim, saying that Intel€™s road map shows more generations of Itanium in the works over the next several years. HP is by far the largest Itanium customer.

HP executives claimed Oracle€™s decision was a ploy to force the companies€™ joint customers off HP systems and onto Oracle€™s SPARC/Solaris Unix platform, which Oracle inherited when it bought Sun Microsystems in 2010. HP estimates that the two companies have about 140,000 joint customers, many of whom run their Oracle enterprise applications€”including database software€”on HP€™s Integrity servers.

HP sued Oracle, claiming the Itanium decision violated an agreement between the two to continue supporting technology used by those joint customers. Oracle officials have said there is no such ironclad agreement, and countersued HP, claiming that HP had misled customers about the future of Itanium.

Oracle became the third major enterprise software maker, behind Microsoft and Red Hat, to end support for Itanium.

The lawsuits were only the latest step in the fraying relationship between two companies that for a long time had been close partners. Holes in the partnership began to surface in 2009, when Oracle executives announced they were buying Sun, which put it in direct competition with HP in the data center hardware space.

It further eroded in 2010, when HP forced Mark Hurd to resign as CEO after questions about his personal conduct arose. It later hired Leo Apotheker as CEO. Apotheker, who lasted less than a year at HP, had been CEO of SAP, Oracle€™s top enterprise software rival. Tensions increased when Oracle hired Hurd as president. HP sued Oracle, and the two sides eventually settled. HP officials claimed that as part of the settlement, the two companies agreed to continue supporting their joint customers. However, Oracle officials have argued that there was never a binding agreement.

Both Sides Released Documents They Say Support Their Cause

In the run-up to the trial, both sides have released documents they say support their cases. Oracle this month unveiled a number of internal HP documents€”primarily emails€”dating back to 2007 that show a desperate HP worried that Intel would end development of Itanium and eventually agreeing to pay the chip maker more than $488 million to continue the platform. HP released documents showing what they said are Oracle executives outlining their intent to harm HP, with one executive saying in an instant messaging exchange that €œhp is dead.€

The debate over Itanium€™s future has already hurt HP€™s high-end server business, with HP executives several times pointing to Oracle€™s decision as the key reason for revenue declines for Integrity systems. Analysts also have said it is having an impact. In IDC€™s May 30 release outlining the worldwide server numbers in the first quarter, IDC analysts talking about the decline in revenues for non-x86 systems pointed to the ongoing legal dispute.

"Recent heightened awareness of the future of Itanium is also pressing down on customer demand for non-x86 servers,€ Kuba Stolarski, research manager for enterprise servers at IDC, said in a statement.

Several high-profile executives are expected to testify during the trial, including Oracle CEO Larry Ellison, Oracle€™s Hurd, Intel CEO Paul Otellini, and other officials from Oracle, HP and Intel. Ellison harshly criticized HP€™s board of directors after it forced Hurd to resign, and also took shots at the company when it hired Apotheker as CEO.

However, during an appearance at the All Things D event May 30, Ellison reportedly had kind words for HP's current CEO Meg Whitman

€œI wish Meg nothing but the best. It€™s a big company. It€™s a lot of work,€ Ellison said during the event, according to MarketWatch, adding that, in comparison to Apotheker, €œI think Meg was a big improvement.€

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