Meanwhile, Back at the Oracle-HP Trial, Safra Catz Takes the Stand

Software giant Oracle had a busy day yesterday. For one thing, it reported earnings, three days early, that were better than anyone expected them to be. That followed chatter, ultimately confirmed, that longtime sales executive Keith Block had left the company, following the disclosure in court of some embarrassing instant messages.

Today the Oracle narrative will pivot back to a San Jose, Calif., courtroom, where Oracle has been litigating its case against Hewlett-Packard. The highlight of the day will be an appearance on the witness stand by Oracle president and CFO Safra Catz.

Her testimony will be key for both sides in the trial, because it was Catz who negotiated with HP’s Ann Livermore, then head of its Enterprise business unit, over the terms of settlement of another lawsuit over Oracle’s hiring of former HP CEO Mark Hurd.

It was during these negotiations that a particular section of the agreement, the disputed $4 billion paragraph, emerged. HP contends that the paragraph requires Oracle to continue porting its software to HP’s Integrity servers, the ones that happen to use Intel’s exotic Itanium chip. Oracle says otherwise.

The Integrity line of servers lies at the very heart of HP’s Business Critical Server unit, and the uncertainty around its future, given all this legal mishegas, is causing HP some serious financial pain. Many — if not most — HP customers who buy Integrity servers run some Oracle software on them, and they’re the type of customers who don’t like to change their IT setups often, if at all.

HP says it has an enforceable contract with Oracle on the porting issue, while Oracle says not only that the paragraph doesn’t amount to a contract, but it also disputes that the paragraph in question was even included in the final signed settlement agreement.