Oracle and HP: Trial Is On Over Itanium Dispute

Published on May 3, 2012
by Arik Hesseldahl

Oracle and Hewlett-Packard are going to settle their dispute over the Itanium chip in a courtroom trial, after the judge in their lawsuit refused to issue summary judgement for either side.

The two companies had asked the judge essentially to throw out the other side’s complaint and rule in their favor in a pair of dueling filings last month, and made arguments to that effect in late March. Now being heard in a California State Superior Court, the case is going to trial, with no hope for a settlement, Reuters reported.

It all started up in late 2010, when in reaching a settlement of a lawsuit concerning Mark Hurd’s taking a job as co-president of Oracle, HP asked Oracle to include some language that it argues committed it to continue to build software that would support Intel’s exotic Itanium server chip. That chip, you may remember, was, for all intents and purposes, a market failure, and HP was the only vendor worth mentioning that ever made a go of selling servers using it.

In March of last year, Oracle said it would cease developing versions of its software that would work on Itanium-based systems, and argued that Intel had plans to end manufacturing of the Itanium chip. HP was outraged, and Intel said it had no such plans. Oracle was in earnest. HP got its Itanium customers to publicly lobby Oracle to reverse the decision. It didn’t work. So HP sued Oracle last June.

The pretrial arguments have been colorful. Oracle accused HP of being sneaky when it negotiated the Hurd settlement. It later compared HP’s ongoing reliance on Itanium to the movie “Weekend At Bernie’s,” the corpse in the analogy being the Itanium chip, kept alive by HP funding. For HP, the argument is a simple one: Is there an enforceable agreement between it and Oracle, or not?

Oracle argues, among other things, that there is no such agreement in place, and even if there were, HP was, at the time of the agreement, about to hire Léo Apotheker and Ray Lane as its CEO and chairman, two people who, for various reasons, Oracle thoroughly distrusts. Also, Oracle says, for HP, the Itanium business is all about the billions in support and service fees it charges its customers, fees without which HP is “strategically screwed.” And by the way, the uncertainty around Itanium servers is starting to hurt HP for real.

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