Oracle: Hewlett-Packard is "Strategically Screwed" without Itanium
Oracle: Hewlett-Packard is "Strategically Screwed" without Itanium
Posted 02/01/2012 at 7:49am
| by Paul Lilly
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Some interesting revelations are coming out of the court battle between Hewlett-Packard and Oracle. At issue is Oracle's decision to stop supporting Intel's Itanium platform based on claims the processors are nearing end-of-life (EOL) status, the timing of which is suspect. Oracle made the decision to ditch Itanium after hiring former HP CEO Mark Hurd, which itself prompted a legal battle and subsequent settlement. Not long after, Oracle said it was ditching Itanium, HP cried foul, and a big legal mess ensued. Some of it was resolved last night.
A California judge rejected a fraud claim by Oracle that would have freed it from an agreement to support Itanium. As part of the settlement over Oracle's hiring of Hurd, Oracle agreed to continue supporting Itanium. However, Oracle alleged that HP fraudulently hid the fact that was in the process of hiring Leo Apotheker (former SAP CEO) as CEO and board chairman Ray Lane (former Oracle executive), two well known Oracle opponents.
While Oracle lost this particular battle, it hasn't lost the war. Newly unsealed documents as part of Oracle's cross-complaint reveal that HP may have paid Intel $440 million to keep Itanium alive through 2014, which didn't include the cost of the chips.
"The stunning $440 million deal was a pure pay-off to induce Intel to keep churning our processors that it really wanted to kill," Oracle said in court filings, which are posted at All Things D. "According to its plan, HP did not reveal this material agreement to the marketplace, or even to its own salesforce."
Oracle maintains that by going all-in with Itanium even as Intel wanted to kill off the processor line, HP essentially "backed itself into a corner" when it should have been pushing Xeon solutions, and without Itanium, HP is "strategically screwed."
It's all very messy, and highly interesting. If you have a few extra minutes, give the unsealed filing a read here.
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JohnP
February 01, 2012 at 6:55pm
Interesting. Both Oracle and HP have been losing market share by pitting RISC and Itanium against x86 architecture, 7% loss in third quarter of last year. HP is changing its position somewhat by giving customers a choice of Itanium and Xeon blades in the their servers. Oracle looks on the out due to locking itself into RISC. As Paul said, IBM is the real winner here, having 27% revenue growth. HP is still number one though.
http://www.pcworld.com/businesscenter/article/245039/risc_itanium_lose_out_to_x86_in_q3_server_market_gartner_says.html
DarkMatter
February 01, 2012 at 10:52am
That if HP don't stop sinking money in a processor platform that no one wants to program for ( leave alone support ) HP will go the way SGI did when they got in the Itanium bed ...
All the major players in Linux and Windows has put a nail in the coffin. Intel is laughing all the way to the bank.
I dunno .. I think any litigation should be thrown out.
praack
February 01, 2012 at 8:57am
the article shows how HP misstepped on the server side as well. the payment to intel means nothing- they are only trying to keep thier customer base alive.
the fact that Oracle is a direct competitor through Sun is the main issue- and probabaly why oracle pulled support.
HP probably was already looking at changing to a new processor but now it is critical- I expect the 32 % drop will just grow larger as this case grows
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