HP Itanium Server Business Down, Not Out After Oracle Dispute

High-end systems revenues are down, but HP still has big customers and plans for mission-critical x86 hardware. Officials have to do better communicating it, an analyst said.

The future of Hewlett-Packard€™s Itanium-based high-end server business has become a topic of debate since the start this week of the trial between HP and rival Oracle over the software company€™s decision to end support for the controversial Intel chip platform.

HP already is seeing the impact of Oracle€™s move, with revenues in its Business Critical Systems group in the first three months of the year dropping 23 percent and HP executives putting much of the blame on the disruption caused by the legal dispute between the former partners.

Some industry observers have forecasted that regardless of the trial€™s outcome, the future of HP€™s Itanium server business is bleak as customers worried about the long-term viability of the Integrity systems and Itanium itself look for alternatives. And if Oracle officials were hoping that alternative would be them, that doesn€™t appear to be the case, either. For now, at least, IBM appears to be the winner, with some HP customers opting for its Power systems.

However, some analysts agree that while the Itanium dispute has hurt HP€™s business, it hasn€™t necessarily been a fatal blow. Many big businesses that have invested millions in their HP-UX Itanium systems aren€™t going to change directions immediately, and HP already has plans underway to help companies move their business-critical workloads onto the x86 platform.

Still, in the short-term, the legal battle with Oracle has taken its toll on HP, according to analysts.