HP Demands Oracle Reverse Course on Itanium Support
Hewlett-Packard says it has sent a formal demand letter to software giant Oracle insisting that it reverse its decision, made in March, to stop building software for Intel’s Itanium server chip.
In the letter, which was not released, HP demands that Oracle honor confidential contractual obligations made between them, and return to developing software that works with Intel’s server chip, and for which HP is essentially the only significant vendor.
Bill Wohl, HP’s chief communications officer, said that HP was making the demand on behalf of its customers who he said have made a significant investment in buying HP servers that use the Itanium chip.
Wohl said that HP and Oracle share roughly 140,000 different customers between them. HP believes that Oracle’s decision violates legally binding commitments and that it constitutes an “unlawful attempt to force customers from HP Itanium platforms” to Oracle’s own hardware platforms. Oracle acquired Sun Microsystems last year.
“It is our hope that Oracle will honor its commitments to HP and to our shared customers,” HP said in a statement. “However, if Oracle continues to disregard its commitments, and continues to engage in conduct designed to deny choice and harm competition, we will take whatever legal actions are available to us necessary to protect our customers and the significant investments they have made.”
Oracle’s decision touched off a war of words with Intel and HP when it said it would stop supporting Intel’s chip, saying it said it saw no future for the business. Intel responded saying that there is indeed a long-term roadmap for more Itanium products. Oracle then said it was only being honest about the situation. Intel and HP have since promised that they remain committed to the Itanium product.
Customers then started a campaign to try and change Oracle’s mind, which apparently hasn’t worked. Oracle declined comment.
In truth, Oracle is not the only software company to walk away from Itanium. Microsoft and Red Hat both walked away from Itanium last year. Microsoft has said that Windows Server 2008 R2 would be the last operating system to support Itanium. Red Hat dropped its support with the release of Enterprise Linux 6.
As I noted when Oracle first announced the move, it also amounts to a big turn of events. Only five years ago, Oracle CEO Larry Ellison said, “There is no more important platform for Oracle than HP and Itanium.”
Of course, things have a funny way of changing. Oracle bought Sun Microsystems, becoming a hardware competitor to HP in the process. Then CEO Mark Hurd left HP to become co-President at Oracle. And now Ellison’s favorite hobby outside of sailing is bashing HP.
And that’s only the more recent part of the backstory. There’s also the chip itself. Intel and HP first teamed up to develop what became the Itanium chip as far back as the late 1980s. It debuted at the start of the last decade and was controversial from the start.
While Intel created a 64-bit chip that was a significant leap forward for servers, it came with baggage: It wasn’t compatible with existing software written for Intel’s standard x86 chips, which in those days were the Pentium and Xeon. That meant software had to be written specially to run on Itanium-based servers.
That created a strategic opening for Intel’s number two rival Advanced Micro Devices. It created a 64-bit chip that was compatible with existing software. Hardware vendors flocked to it, and during 2005 and 2006 AMD built up enough momentum to take away some of Intel’s share of the server market.
After a few years Intel changed course and, beginning in 2004, started putting out its own x86-compatible 64-bit chips. Its Intel64 technology is now a standard across its server, desktop and notebook chips. And it got most of its share of the server market back.
However, Intel is still putting out Itanium chips, though it’s really a niche product. It updated the line last year with the Itanium 9300. It also has two future chips in the family still in the pipeline, one codenamed Poulson, the other codenamed Kittson. Few companies buy servers built around Itanium chips, and HP is really the only server vendor to sell them, and since HP doesn’t disclose how many it sells, its widely assumed that the number is, relative to mainstream servers, pretty small. Intel said in April that the Itanium ecosystem amounted to about $4 billion in server sales last year.
When it made its decision to end Itanium support Oracle said it believed that Intel would start steering customers away from Itanium and toward its standard server chips, and indeed Intel has been describing its mainstream Xeon server chip as “suitable for any workload in the world,” giving Oracle’s position at least some basis in logic.
Whatever the case, Oracle is showing no sign of reversing course, which means this matter is probably headed to the courts, and soon.
Oracle shares are down by 60 cents or nearly 2 percent to $31.24. HP shares are down 5 cents to $35.52. Intel shares are down 25 cents or more than 1 percent to $21.81.