HP and Oracle: I Know You Are but What Am I?
The trial date in the nasty dispute around the Itanium chip between Oracle and Hewlett-Packard must be getting close, because both sides asked a California judge to essentially rule in their favor before the trial actually begins.
Lawyers for both HP and Oracle filed arguments seeking summary judgement in their fight over whether or not Oracle has the right to stop making software that has been ported to run on computers using Intel’s obscure Itanium chip. Oracle said last March that it would no longer support the chip, which is, for all intents and purposes, only used in certain exotic high-end systems sold by HP. For its part, HP has argued that Oracle is bound by a contract to continue to support the chip for several more years. I’ve embedded the competing filing documents below.
The legal moves naturally touched off a renewed salvo of public statements between them that added some interesting details to the proceedings, and which provide some fair insight into how the two players are going to argue at trial. Basically, it’s going to come down to whether or not the two companies have an enforceable agreement that was struck as part of a wider settlement they reached when they settled another lawsuit that followed former HP CEO Mark Hurd’s hiring by Oracle.
Meanwhile, Oracle insists that HP and Intel are lying to the marketplace about the future prospects of the Itanium chip, and has characterized their efforts to keep the chip alive in the marketplace as “a remake of ‘Weekend at Bernie’s.'”
HP scored first:
“The information brought to light during the discovery period further underscores the key facts of this case. In fact, it has led HP to seek a pretrial ruling that Oracle is contractually obligated to offer future versions of Oracle’s software on Itanium. It is time for Oracle to quit pursuing baseless accusations and honor its commitments to HP and to our shared customers.”
HP’s statement then went on to use several historic statements by Oracle, emphasizing the partnership and commitment to Itanium. It even quoted Oracle CEO Larry Ellison:
“Ellison testified that in making his decision to issue Oracle’s March 22 announcement that Itanium was “nearing the end of its life,” he relied on a conversation with Intel’s chief executive officer, Paul Otellini. But Ellison admitted under oath that Otellini did not say that Itanium was nearing the end of its life. And the Intel executive responsible for the Itanium business has now testified unequivocally that Oracle’s claim was not true.”
Oracle attorney Dan Wall issued a pair of statements, and one was more or less the standard summary of that company’s position: So important an agreement as the one that would obligate Oracle to extend a strategic partnership wouldn’t be contained in a settlement over what was essentially a dispute over a noncompete agreement.
“We don’t believe, nor do we think HP really believes, that a settlement agreement relating to Mark Hurd’s employment could possibly obligate Oracle to write new software for a platform that is clearly end of life. We are pleased the Court now has the evidence needed to see HP’s purported contract claims for what they are.”
Then, apparently after seeing HP’s extensive statement , Wall shot back with more extensive — and interesting comments. He cites testimony fromformer HP chief communications officer Bill Wohl as admitting that the lawsuit was more or less a public relations stunt that was part of a wider campaign intended to raise outrage among their shared customers and force Oracle to reconsider.
“Rather than filing a legal motion, HP has yet again filed a press release that continues its campaign of lies about the Itanium roadmap. HP’s PR Director admitted the lawsuit was conceived as part of a campaign designed to ‘foment customer outrage.’ HP’s documents and executive deposition testimony make indisputable the fact that Itanium is nearing the end of life as Oracle said. Intel documents confirm that as well–which is why despite repeated efforts by HP to get Intel to refute Oracle’s March 22 press release, Intel has refused to say more than that it intends to deliver the two announced versions of Itanium.
“The status of Itanium, meaning its impending end of life, has been maintained as one of HP’s most ‘closely guarded secrets’ from customers, partners and HP employees alike in order to avoid giving its sales organization ‘another reason not to sell’ Itanium and to continue to ‘milk’ maintenance profits from its customers. HP documents reference HP-UX on Itanium as on a ‘death march’ and confess that Intel would be doing ‘high fives’ to no longer have to develop the chip given its poor performance and market traction and the huge opportunity cost associated with it. HP’s documents also contemplate various options to deal with the inevitability of Itanium’s end of life, including paying Intel to ‘elongate’ its life. HP’s documents make clear that HP was intent on ‘creating a market perception of long term viability’ and introducing versions of the chip that are ‘more of an illusion than of technical significance.’ In other words, HP’s strategy was to mislead the market and its customers as to the real status of Itanium. Oracle will not participate in this fraud.”
The history and context of this lawsuit is long and complicated, and fraught with the fact that for a time, HP was run by former SAP co-CEO Léo Apotheker at a time when Oracle and SAP were locked in their own nearly-nuclear multiyear legal battle. The fact that former Oracle president and Ellison enemy Ray Lane is HP’s executive chairman only adds to the enmity.
However, there’s evidence to show that HP is the one being hurt the most by the ongoing fight. Without the support and maintenance fees that HP collects from companies who buy its Itanium-based servers, the company is, in the words of one of its own executives, “strategically screwed.” Amid the doubts brought on by the fight with Oracle, sales of HP’s highly profitable business-critical servers have suffered. And with the printer business suffering and PC sales flattening, that is the last thing HP needs.
Oracle, by all appearances, can afford to let its Itanium business die, and has argued that Intel would like nothing better than to get out of the business of making Itanium chips that are only profitable with subsidies from HP; and that it has quietly planned to let the chip reach the end of its life and transition customers over to its more mainstream Xeon chip, which it now says is “suitable for any workload.”
Anyway, the dueling filings are below, HP’s first:
(Image, obviously, is a screen grab from this epic moment of cinematic history, circa 1986.)