Emails and other documents released by Oracle show Intel executives eager to end development of the controversial Itanium processors and Hewlett-Packard officials willing to pay more than $500 million to keep the high-end platform going for several more generations.
The court exhibits, released by Oracle May 16, date back to 2007, when HP and Intel executives were debating the future of Itanium, on which HP has based its high-end Integrity and NonStop servers. Throughout the emails and other documents, HP executives talk about the harm it would cause their Business Critical Systems (BCS) group if Intel officials followed through on their desire to end Itanium development in favor of their x86-based Xeon processors, and debate options ranging from paying Intel hundreds of millions of dollars to continue the platform to buying Sun Microsystems to gain its SPARC/Solaris hardware business.
Oracle eventually bought Sun in 2010.
The documents are part of the exhibits in the legal dispute between HP and Oracle, which began last year after Oracle officials announced they were no longer going to develop their software for the Itanium platform. They cited conversations with Intel engineers, who told them that the giant chip maker was planning to end of life Itanium.
Both HP and Intel executives quickly disputed that claim and said that there were several more generations of Itanium in the Intel road map. HP eventually sued Oracle over the decision, saying the software maker was trying to force HPs Integrity and NonStop users to migrate to the struggling hardware business that Oracle inherited in the Sun deal.
HP also claimed that the move violated an agreement between HP and Oracle to continue supporting technologies used by their joint customers. HP estimates that 140,000 customers run Oracle software on HPs Itanium-based systems.
Oracles decision to release the court exhibits comes a day after a judge refused Oracles request to toss HPs legal claims. Oracle apparently is trying to sway public opinion to its claim that HP hid the imminent demise of Itanium from its customers and the industry at large. The case is expected to go to trial later this month.
In what the company is calling a letter to its customers that run its applications on HP hardware, Jeb Dasteel, senior vice president and chief customer officer, wrote that there are many documents that have been disclosed through litigation that describe the true state of Itanium in Hewlett-Packard’s own words. Rather than us interpreting this situation for you, we thought we would give you access to the public HP documents so you can make your own decision regarding your investments in Itanium technology. After reading these documents we are confident that you will agree with our decision, taken with the best interest of our joint customers in mind.
Oracle then lists a dozen exhibits, mostly email exchanges between HP executives and between HP and Intel officials. The documents show that by 2007, Itanium had become a losing proposition for Intel, and that CEO Paul Otellini wanted to either end the platform or find a way to make it at least break even.
HP by that point had become the only major Itanium customer, and was still making millions of dollars selling the high-end systems and related services. Eventually, HP officials agreed to pay Intel $488 million as well as R&D and other costs to keep Itanium development going, knowing that was the only way to keep the BCS unit from imploding. At one point in 2009, an HP executive asked Martin Fink, who at the time was senior vice president and general manager of BCS, what would happen if HP refused to pay Intel.
Simple. They shut down Poulson and Kittson development and exit Itanium and have a round of high-fives, Fink wrote.
Poulson and Kittson are future Itanium processors, with Poulson expected to be released sometime this year.
Oracle officials have argued that the payments show that the only thing keeping Itanium chugging forward was money from HP, and that by not disclosing the payments to customers and the industry while touting future Itanium development, HP was guilty of false advertising.
However, others have said that the payments were smart moves by a company looking to keep a profitable part of the business afloat. HP officials, in a statement to media outlets, said that the documents released by Oracle prove Intels continued Itanium support.
Intel has provided unequivocal and repeated statements to the marketplace that Itanium is not at an end of life, HP said in the statement. The undeniable fact is there is committed support for Itanium that extends out toward the end of this decade. Statements that Itanium was at or near an end of life are false. With the unsealing of court filings, the public can see the undisputed facts of Intels Itanium road map clearly showing a long and sustained future for Itanium.
However, the documents show a group of HP executives who were worried five years ago about Intels Itanium plans. According to the documents, Fink noted in 2007 that Intel dropped a bomb on us by talking about canceling Poulson development.
Over the course of several years, HP executives talked about how their Unix platform, HP-UX, was on a death march because of the eventual demise of Itanium, and that other options, including buying Sun, should be considered. At one point, then-HP CEO Mark Hurdnow president at Oraclenoted that by 2007, HP had sold $9 billion worth of Itanium servers, and that it would be hard to walk away from those customers.
Eventually, HP and Intel executives in 2007 agreed that the best way forward was keeping Itanium going until at least 2013, with Intel acting in a foundry capacity for HP, providing Itanium in exchange for HP payments to Intel that would cover the expense of building and developing Itanium to keep Intel from losing money.