HP shares rose nearly 5 percent to $22.10, up $1.02 as of 11:15 am ET. Investors appear to be showing new confidence in HP and how CEO Meg Whitman is running the show. All the announcements that HP made yesterday bear repeating, because it was a busy afternoon:

 
Update: A few readers have written to point out I was wrong about HP’s old ticker symbol. It wasn’t HP but HWP. Silly me. Even so, if the Compaq name is headed for some lesser level of importance in HP’s future, then perhaps the Q in the ticker symbol, which was added as a nod to Compaq’s old symbol CPQ, to give the impression that the combination was more a merger of equals, should go. Given the choice between them, I would vote for HP. I should stress that I have zero indications that this is even under consideration, and is really just me ruminating.

Analysts had a mixed view. Chris Whitmore of Deutsche Bank Securities has been one of the more skeptical voices on HP’s turnaround prospects. “New sheriff, old game plan,” was the headline on his note to clients today. “We remain cautious on HP’s weak fundamentals, challenging macro conditions and deteriorating cash flow,” he wrote. Despite the beat on earnings, free cash flow — at $1.4 billion in the quarter — declined by half, pointing to what Whitmore calls “very poor earnings quality.” He rates HP as a “sell,” with a $20 price target.

Brent Bracelin of Pacific Crest Securities wrote that he remains unconvinced that an unexpected strength in HP’s PC unit is sustainable. “Apple and Samsung now account for 39 percent of market share across PCs, tablets and smartphones, and have a volume advantage relative to HP’s 6 percent share,” he wrote in a note to clients this morning. He rates the shares “market perform,” or neutral, and worries that HP’s biggest problem is that about half its sales are still tied to PCs and printers.

Whitman took to CNBC this morning to talk about HP’s situation. She portrayed the turnaround under way as about “10 to 15 percent” complete. That means there’s still a lot of work to do ahead. “We’ve laid a lot of pipe and done a lot of groundwork,” Whitman told the network’s anchors in a 13-minute appearance. I’ve embedded it below:

The consensus among Wall Street analysts calls for HP to report sales of $29.92 billion and a per-share profit of 91 cents. And, for the most part, analysts are expecting HP’s results to be in line with expectations, if maybe a little light on sales.

One possible curveball, however, is Europe. Given HP’s exposure to the faltering markets on that continent, about which Dell complained in its earnings report yesterday, HP could conceivably see its results hurt more by Europe than by Dell.

Europe accounts for 37 percent of HP’s revenue, making it the most heavily exposed there among the large IT vendors. “The increasing uncertainty and resulting macro weakness in Europe will likely act as an ongoing headwind to growth,” wrote analyst Chris Whitmore of Deutsche Bank Securities in a note to clients Tuesday.

But the big item on the agenda will be HP’s plans for restructuring, and how many jobs may be lost. As AllThingsD reported last week, HP is contemplating a restructuring that could see as many as 30,000 jobs eliminated, including 5,000 through voluntary retirements. What’s unclear is over what length of time these jobs will go — I’ve been told by sources that this is a key detail, and it is likely to be a fairly long period of time.

The reductions would be the latest in a long, painful sequence of cuts for HP that began years ago. Whitmore notes that HP chopped 50,000 jobs over the course of five years under the tenure of former CEO Mark Hurd. “We suspect HP will position this cost cutting as ‘cut to reinvest’ — an interesting strategy considering HP has been restructuring for the past decade,” Whitmore writes.

Whatever restructuring Whitman puts on the table, Whitmore expects it will help HP maintain its prior guidance — it expects to finish the year with a per-share profit north of $4.00 — but it’s still not going to be easy. Summer PC demand is expected to be soft, and the lack of a tablet strategy isn’t helping. Demand for corporate PCs will likely be a rare bright spot, but just barely.

In printers, the relatively weak results of printer concerns Canon and Lexmark don’t exactly imbue the market with confidence that the trend of sliding profits and sales in HP’s printer operation, recently combined with the Personal Systems Group in a sweeping reorganization announced last month, is anywhere close to being reversed.

One thing to watch for — and something about which Whitman has hinted in the past — is SKU reduction. An SKU is industry lingo for “stock-keeping unit,” and it refers to specific models and makes and packages of a given product. Consumer printers — and, in fact, printers in general — would be an obvious place to cut back on the number of models offered to the market, and it would be perfectly in line with Whitman’s prior messages emphasizing simplicity and streamlining HP’s approach to the market. While I don’t expect Whitman to go on at length about this subject, it’s the sort of thing she may touch on as she hones the “simplicity” message.

What not to expect: One big bomb dropped all at once, outlining the sum total of Whitman’s long-term strategy for HP — one she has already admitted will take a long time to implement. The fact is, it’s a big job, probably one of the biggest in all of the corporate world, and so it’s necessarily coming out in pieces. Today’s piece will be a big one.

The world’s third-biggest PC maker gave a forecast for gain in sales of 2 percent to 4 percent in the current quarter, which would top out at $15 billion, fully $400 million short of what Wall Street analysts had expected.

That outlook came on top of sales in the quarter just ended that declined 4 percent to $14.4 billion, amounting to a miss of a half billion from the Street consensus. Per-share earnings were 43 cents, also short of expectations by three cents. It was the second miss in a row for Dell.

Naturally, Dell shares are getting spanked. As of 3 pm PT, they’re down almost 12 percent, at $13.33 a share. And the damage isn’t limited to Dell. Hewlett-Packard, which reports earnings tomorrow, is down in after-hours trading by 56 cents, or nearly 3 percent, to $21.22 a share.

How serious? Does $2.2 billion and 15 percent EBIT profits sound serious to you? It does to me, and also to Deutsche Bank analyst Chris Whitmore.

Having slogged through Oracle’s 72-page document dump with a better eye for detail than mine, Whitmore noticed a line in a January 2010 email from Dave Donatelli, now head of HP’s Enterprise Group (specifically Exhibit 17, for those who want to scroll through and find it) saying that HP’s Business Criticial Server business combined with its Technology Services business, which includes the support and services associated with the Integrity line of servers that uses the Intel-made Itanium chip, was at that time larger on a revenue basis than HP’s personal computer business.

The same document, he says, showed that at the time, HP’s “owned operating profit” for the combined hardware, software and services tied to the business of selling and supporting Itanium servers was about $2.2 billion. All in, HP derives — or at least at that time derived — about 15 percent of its profits on an EBIT basis from Itanium and related businesses.

No wonder, then, that HP considered Oracle’s March 2011 decision to stop creating software that runs on the Itanium chip so earth-shattering that it hauled the software giant into court last June. That case is expected to head to trial any day now.

The disclosure is the clearest sign yet of how much HP stands to lose if its Business Critical Server business can’t recover. It has always been known to be a highly profitable business; exactly how profitable was a closely guarded HP secret. But sales of Business Critical hardware have been on the decline. In 2009, sales of BCS hardware were $2.6 billion. In 2011, they had fallen by 19 percent to $2.1 billion. And in the quarter ended Jan. 31, sales were $405 million, down 27 percent from the same period in 2011.

The uncertainty about Itanium’s future is one of the many reasons that Whitmore has been particularly bearish on HP’s turnaround prospects: “Given the growing uncertainty around the long-term viability of Itanium, we expect customer defections to continue, if not accelerate in future periods,” he wrote in a research note to clients, issued yesterday.

However, much as HP lawyers would like to argue that Oracle’s motivation is to help bolster long-flagging sales of its new Sun Microsystems hardware unit, Whitmore argues that the main benefactor is IBM: “While Oracle is responsible for shining a bright light on Itanium’s precarious future, it is probably doing IBM the biggest favor. … We expect IBM to be the greatest beneficiary of Itanium defections and view Power [IBM's server chip] as the market consolidator and eventual standard in the UNIX/RISC server market over the medium to longer term.”

And even if HP prevails in its suit, Whitmore isn’t seeing much benefit: “Regardless of the outcome of this particular suit, we expect HP-UX customers to continue fleeing what is increasingly looking like a dead platform — creating a major headwind for HP’s medium-term earnings.” Ouch.

They’re not quite as juicy — Oracle has always had the better flair for the dramatic in this case — but in releasing them, HP clearly intends to paint Oracle, the new owner of Sun Microsystems, as out to hurt HP by kicking it straight in the teeth by damaging its Business Critical Server operation.

The first of the batch is an instant message exchange between some Oracle sales guys, who happen to use salty language in relation to HP. (Sorry about that.)

The second appears to show that Mark Hurd, while still CEO of HP, was informed about Intel being both aggressive and excited about a forthcoming version of the Itanium chip, which would seem to run contrary to the argument Oracle has made that Intel was prepping for the Itanium line’s end of life, while allowing HP to lie about it to its server customers. In the message, Martin Fink, who figured so prominently in Oracle’s document dump today, writes to Hurd: “I’m not sure what exactly this means, but I have rarely seen Intel so agressive on anything to do with Itanium EVER, and they are working very hard to get this moving forward.”

Another, from February 2011, appears to show Oracle unwilling to release a security software patch for a version of one of its applications that runs on HP-UX and therefore on an Itanium-based server. Another from the same day is an email from Oracle CEO Larry Ellison to Thomas Kurian, senior vice president of Oracle’s server technologies, asking if support documents had been updated to specify “no more one-off patches for Itanium.” The date is key because Oracle first announced that it would no longer support Itanium systems on March 23 of that year. It should surprise no one that the top echelons of Oracle management knew this announcement was coming.

The next is an email showing HP getting ready for a big strategy launch. “Kinetic” was HP’s internal name for a strategy that leveraged all of HP’s IP that enabled mission-critical products into a cohesive whole. Plans for Kinetic included extending HP-UX and Integrity, HP’s line of Itanium-based servers, indefinitely, as well as bringing up X86 chips, like Intel’s more mainstream Xeon, under the “mission critical” umbrella. As HP sees it, this was the plan all along.
 
Finally the last one is another IM exchange between Oracle sales execs. Toward the end, one of them complains about being forced to sell Sun hardware that is described as a “pig with lipstick at best.” Again as HP sees it, once Oracle owned Sun it had every motivation to do whatever it could to hurt HP, including ducking out of previously contracted commitments.

As I did with the Oracle dump this morning, I collated everything into a single PDF. I think I got everything in chronological order this time. Read for yourselves!

HP-Itanium-docs.pdf

The documents were released as part of a new offensive by Oracle to ratchet up the pressure on HP and take its case to the marketplace — that HP and Intel had already planned to bring an end to the Itanium chip’s life, and that HP lied to its customers about the chip’s long-term future.

HP has long denied Oracle’s contention, and has tried to portray this as Oracle’s failure to live up to its end of a contract.

In an open letter to affected customers, Oracle said it was releasing the documents in order to allow customers to “make your own decision” on the matter:

Dear Customer:

A little over a year ago we announced that we would no longer be developing new versions of Oracle’s database and other products on the Intel Itanium platform due to our strongly held belief of Itanium’s imminent end of life. We ensured our Itanium customers would have an easy transition to the platform of their choice by committing to 10 years of support for existing Oracle software running on Itanium.

Hewlett Packard strongly disagreed with our characterization of Itanium’s future and launched an immediate campaign designed, in their words, to foment “customer outrage.”

At this time, there are many documents that have been disclosed through litigation that describe the true state of Itanium in Hewlett-Packard’s own words. Rather than us interpreting this situation for you, we thought we would give you access to the public HP documents so you can make your own decision regarding your investments in Itanium technology.

After reading these documents we are confident that you will agree with our decision, taken with the best interest of our joint customers in mind.

Sincerely,
Jeb Dasteel, Senior Vice President and Chief Customer Officer
Oracle

Bloomberg Businessweek got its hands on some of these trial exhibits, but in its posts this morning — and presumably in the tech section of this week’s magazine — stuck to a fairly limited set of highlights. And in fact there’s not so much that’s surprising, if you read my story on the unredacted version of Oracle’s cross-complaint from January.

Basically, the new documents add more color and a lot more tension to the state of the HP-Intel relationship over the production of the Itanium chip. It also lends a lot of weight to Oracle’s narrative heading into that trial: That HP relied heavily on profits earned from multiyear sales and support contracts with customers who bought its Integrity servers that run Intel’s exotic and expensive Itanium chip. In support of that, it paid Intel nearly a half-billion dollars to keep the chip alive, despite the fact that, outside of HP, there was no other single vendor using Itanium chips.

In the emails, Intel, for its part, certainly looks like it wants out of the business of making the chip, but is willing to accept HP’s money to keep churning them out. Asked at one point what would happen if HP didn’t pay a certain amount to Intel, Intel would — in the words of Martin Fink, then-head of HP’s Business Critical Server business — shut down the teams producing certain chips that were in the process of being designed, and slap “high fives all around.”

On its face, there’s nothing inherently wrong with HP paying Intel to keep making a particular chip. HP had customers willing to buy these servers, and it made money supporting them, so paying Intel to keep them coming — remember, HP for all intents and purposes, is the only vendor buying this chip — was more or less a cost of doing business.

However, Oracle’s argument has been that HP refused to play straight with the wider marketplace, insisting that Itanium would be around for many generations to come. Even Intel itself insisted that was true last year, when Oracle first announced that it would stop making new applications that support the chip, which of course led HP to sue last June.

AllThingsD has compiled all of these documents into a single 75-page document; you can read the entire collection below. They’re ordered by exhibit number rather than chronological order. I’ll probably have more to say as I go through them.

HP just sent a statement:

“Intel has provided unequivocal and repeated statements to the marketplace that Itanium is not at an end of life. The undeniable fact is there is committed support for Itanium that extends out toward the end of this decade. Statements that Itanium was at or near an end of life are false. With the unsealing of court filings, the public can see the undisputed facts of Intel’s Itanium roadmap clearly showing a long and sustained future for Itanium.”

An Intel spokesman had no comment, saying it is not a party to the lawsuit.

Update: So let me try to curate these documents a bit. They cover a time period beginning in August 2007, and go through to April 2011. In the first, (Ex. 6) Fink writes to another HP exec and says, “Intel dropped a bomb on us last night” during a meeting that included talk of “canceling Poulsen,” a future version of the Itanium chip that was on internal road maps. Poulson, for the record, is Intel’s code name for a 32 nanometer version of Itanium that was to be released sometime this year. The response: “Call Pat G,” referring to Pat Gelsinger, the once very senior Intel executive who was at one time widely considered to be a possible successor to current CEO Paul Otellini, but is now the COO at EMC, and likely to be its next CEO. Fink’s response: “I did, spent an hour … This was a high tension call.” Intel was worried that an HP server was being built using a competitor’s chip, presumably one from Advanced Micro Devices.

From there, skip forward to Exhibit 43. The email to Fink from Scott Stallard, now a retired HP exec, details a discussion with Intel’s Tom Kilroy, then VP of its enterprise business. The message to Intel: “Don’t possibly signal to the world” the end of the Itanium road map.

The next document is notes from a meeting between Intel and HP led by Otellini and then-HP CEO Mark Hurd in September of 2007. According to those notes, Intel’s Kilroy concedes that the then-current core used to build the Itanium chip has reached its end of life, and that there are two paths forward, one expensive, the other painful — a “crash landing.” Otellini then says that Intel can’t continue to lose money on the product. Hurd goes on to say that HP had by that time sold a combined $9 billion worth of Itanium-based servers, and that it “would be hard to walk away from those customers.”

Otellini then says, according to the notes, that “we need to address the inevitable on the future of Itanium.” Both sides then agree that over the next several years they’d like to glide toward using Intel’s more plentiful and more mainstream Xeon server chips, and essentially keep Itanium alive until 2013. Intel then proposed a new business model that would turn Intel essentially into a contractor for HP. Its goal would be not so much to make money on the Itanium business, but to stop losing money on it. Hurd agrees to take a serious look at the numbers.

Next in line is Exhibit 55, in which Stallard outlines the November 2007 Intel proposal to HP. The key point: HP would pay Intel $488 million over five years to keep building Itanium chips. It includes provisions for an annual “true up,” where Intel gets paid for any difference between its costs and what HP has already paid it for that year. Stallard writes: “So you ask, why should that be that we are forced to true up Intel to break-even? lt is because Tom [Kilroy] says Paul [Otellini] has been consistent on one thing all along, that if we do any other scenario than Tukvale (e.g. shut down the business early) then “Intel can’t lose any (more) money on this thing.’”

Next is Exhibit 15, a PowerPoint deck outlining the strategic rationale for HP to consider buying Sun Microsystems. Key phrase: HP-UX, its version of Unix developed specifically for Itanium servers, “is on a death march” because of Itanium’s inevitable demise. The slide also shows HP’s worries concerning a scenario in which IBM acquires Sun. The key phrase there: Such a deal “Isolates and exposes HP-UX as 3rd tier player, accelerates our decline (product/service) as customers look to consolidate vendors.”

We all know what happened instead: Oracle acquired Sun in 2010 and, in a stroke, took over its server business, giving Oracle an obvious motivation to cut its support for Itanium and hurt its new rival HP in the process. I’ve hit a few high points here, but I think you can get the gist from a careful reading of the documents below.

Update: I’ve re-uploaded the exhibits to Scribd in more logical order, so you don’t have to skip around. Sorry if that was confusing before.

Oracle Itanium Exhibits Chronological

New documents in the case came public yesterday, essentially spelling out Judge James Kleinberg’s ruling from May 1 in turning back Oracle’s motion for summary judgement. It’s not a terribly big deal, because both sides asked for summary judgement and failed to get it, as happens nearly all of the time in cases that get this far.

One key piece of their dispute arises from the fact that when they settled another lawsuit in 2010, stemming from Oracle’s hiring of former HP CEO Mark Hurd, there was, as HP argues, a provision included requiring Oracle to continue making software that supports servers running Intel’s exotic Itanium chip. A good deal of the fighting between the companies at trial is going to revolve around this point, and whether or not that agreement is enforceable or even exists. What that provision called for, essentially, was for Oracle to continue supporting Itanium as it had previously.

A key paragraph in the judge’s ruling:

“In the Court’s view, it is not unreasonable to interpret the Reaffirmation Provision as imposing a prospective obligation on Oracle to continue to offer products for HP’s platforms; the plain language is readily susceptible to that interpretation. If the prior, existing obligation before [Mark] Hurd’s hiring involved a clear and consistent practice in which Oracle offered its product suite on all HP platforms without written porting agreements or payments, then the Court sees no inherent contradiction in ‘reaffirming’ that this arrangement will continue going forward.”

Both sides in this case never miss an opportunity to poke each other in the eye with public statements. HP struck first last night:

“HP is pleased that the Court ruled that the language in the HP/Oracle agreement can be interpreted to require Oracle to continue porting its software products to the HP Integrity platform, as Oracle did for years before the agreement. As the ruling states, Oracle’s interpretation would make the agreement ‘illusory’ and ‘should be rejected.’ We look forward to trial, where the details of Oracle’s deliberate, anti-customer business strategy to drive hardware sales from Itanium to inferior Sun servers will be revealed.”

But it’s important to remember that HP lost its motion for summary judgement, too. Also, didn’t HP convince the judge that the Itanium provision of the Hurd settlement agreement means exactly what it thinks it does? At least that’s how Oracle attorney Dan Wall saw it, in a statement sent to AllThingsD this morning.

“HP cannot be happy with this decision. The Court did not accept HP’s interpretation of the Hurd settlement agreement; in fact, it rejected out of hand the most recent version of HP’s argument, which equated the contract with terms HP proposed, but Oracle rejected. HP’s lawsuit, like Itanium itself, is living on borrowed time and will never succeed.”

Anyway, the 29-page judge’s opinion that kicked off this latest pretrial PR salvo is below:

endorse_80790_203163_A

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.

(Image is of this T-shirt)

HP sued Oracle over what it says is an agreement to continue to create software that will run on HP systems running Intel’s Itanium chip, an agreement that HP argues was struck as part of the settlement that ended a suit stemming from former HP CEO Mark Hurd’s joining Oracle in 2010. Oracle, for its part, has argued that Intel plans to phase out the Itanium chip, a specialized server chip that never saw any real success in the marketplace, in order to focus more on its mainstream Xeon line of server chips and has only been producing them because HP has been paying it to do so.

The pair lobbed dueling filings at each other yesterday. In Oracle’s filing, which is the first of the pair embedded below, its lawyers accuse HP of trying to have the court write the contract it says it never agreed to in the first place: “HP has now been forced to admit that the fuzzy, feel-good language in the Reaffirmation Provision would fail as a porting contract on its own — unless the Court supplies numerous detailed terms inferred from the parties’ course of dealing.”

In the second of the two filings embedded below, HP makes the point that Hurd, once HP’s CEO and now Oracle’s co-president, had previously worked with Intel on Itanium-related matters. The key quote from the introduction:

“When asked point blank at his deposition whether it was misleading for HP not to publicly disclose the ICA [Itanium Collaboration Agreement], Oracle’s Co-President stated definitively: “No.” Thus, to prevail on its false advertising claims, Oracle must establish that its own Co-President was responsible for a fraudulent scheme while he was the CEO at HP, and that Mr. Hurd perjured himself at deposition. Although, and somewhat incredibly, Oracle recently stated on the record in response to this Court’s question that Mr. Hurd was part and parcel of this alleged scheme and pattern of lying, Oracle has no evidence to support this claim against Mr. Hurd. In any case, the fact that Oracle is even going down this path against its current Co-President reveals the absurdity of its entire claim.

Here, you can read them in the original, Oracle’s first:

Oracle Reply Msa 1599529

And now HP’s filing:

HP Reply in Support of Cross Claim MSJ

The results beat the consensus view of analysts who had expected Intel to report per-share earnings of 50 cents on sales of $12.84 billion.

The company also said it expects to see sales in the range of $13.1 billion and $13.7 billion and gross margin of about 62 percent in the quarter ended June. This compares with a street consensus of 55 cents a share at $13.43 billion in sales.

Intel’s statement is below. The company will hold a conference call shortly to discuss the results with analysts.

SANTA CLARA, Calif.–(BUSINESS WIRE)–

Intel Corporation today reported quarterly revenue of $12.9 billion, operating income of $3.8 billion, net income of $2.7 billion and EPS of $0.53. The company generated approximately $3.0 billion in cash from operations, paid dividends of $1.0 billion and used $1.5 billion to repurchase stock.

“The first quarter was a solid start to what’s expected to be another growth year for Intel,” said Paul Otellini, Intel president and CEO. “In the second quarter we’ll see the first Intel-based smartphones in the market, ship products based on 22nm tri-gate technology in high volume, and accelerate the ramp of our best server product ever, providing a tremendous foundation for growth in 2012 and beyond.”

Business Outlook

Intel’s Business Outlook does not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed after April 17.

Q2 2012 (GAAP, unless otherwise stated)

Revenue: $13.6 billion, plus or minus $500 million.
Gross margin percentage: 62 percent and 63 percent Non-GAAP (excluding amortization of acquisition-related intangibles), both plus or minus a couple of percentage points.
R&D plus MG&A spending: approximately $4.6 billion.
Amortization of acquisition-related intangibles: approximately $80 million.
Impact of equity investments and interest and other: loss of approximately $20 million.
Depreciation: approximately $1.6 billion.

Full-Year 2012 (GAAP, unless otherwise stated)

Gross margin percentage: 64 percent and 65 percent Non-GAAP (excluding amortization of acquisition-related intangibles), both plus or minus a few percentage points, unchanged.
Spending (R&D plus MG&A): $18.3 billion, plus or minus $200 million, unchanged.
Amortization of acquisition-related intangibles: approximately $300 million, unchanged.
Depreciation: $6.4 billion, plus or minus $100 million, down $100 million from prior expectations.
Tax Rate: approximately 28 percent down from prior expectations of 29 percent.
Full-year capital spending: $12.5 billion, plus or minus $400 million, unchanged.

For additional information regarding Intel’s results and Business Outlook, please see the CFO commentary at: www.intc.com/results.cfm.

It’s also the first of several chip stocks to report in the coming days. Sterne Agee analyst Vijay Rakesh summarized a few to watch in a research note to clients today.

Generally, he says to expect semiconductor companies to report results that range from in line with expectations to slightly up, and the outlook for the June quarter should improve.

One reason for that: PC sales estimates came in higher than expected from both Gartner and IDC last week. “We believe improving shipments were primarily a result of restocking rather than end-market demand. We believe both AMD and Intel should deliver in line to modestly better” results for the quarter ended March, he writes. Of the two, he says, AMD could deliver more upside on its results when it reports earnings on April 19 because its consensus estimates are low. Analysts expect it to report earnings of 9 cents a share on $1.56 billion in sales.

Intel, its strength already established, has higher expectations more consistent with its recent performance. The consensus of analysts calls for it to report 50 cents of per-share earnings on $12.84 billion in sales.

A supply chain disruption in hard drives that for a few months messed with the PC industry is coming to an end. But sales of Ultrabooks aren’t impressing anyone, Rakesh says. “Ultrabook sell-through is weak primarily on higher retail pricing versus mainstream notebooks. There are only 15 Ultrabooks on Best Buy versus 280 Notebooks listed,” he writes.

In the server space, Intel’s Romley chip is ramping up to full capacity, but he expects the competition from AMD to increase in coming months. One reason: AMD’s acquisition earlier this year of micro-server vendor SeaMicro.

One more chip company he likes among those reporting this week: Qualcomm. Rakesh says it has strong tailwinds, including Apple’s expected iPhone5, the latest iPad and wins with phones and tablets at Samsung.

We all know how that turned out. Dell first conquered the PC market, and the ultracompetitive environment it created drove several companies out of the market: IBM sold its PC business to Lenovo; Gateway sold itself to Acer; Hewlett-Packard acquired Compaq. Other lesser players are all but forgotten.

It’s as if Dell was a victim of the hyperefficient world it created. HP is now the world’s biggest PC maker, followed by China’s Lenovo, with Dell in third place on a global basis, as of last quarter.

PCs — consumer and business PCs — still amount to about half of Dell’s business. But there’s another way to look at Dell, and that’s from the point of view of its enterprise business. I learned this in a recent conversation with Steve Felice, Dell’s chief commercial officer. I also learned that the consumer PC business, for which Dell is still widely known in the U.S., amounts to about one-fifth of its business, while its enterprise lines of business, including commercial PCs, amount to 50 percent.

It’s all part of the long-term transformation that has been underway at Dell for a few years now. The company recently did three acquisitions in as many days, the most significant of which was for Wyse Technology.

That caught my attention. But first I wanted Felice’s reaction to the findings of a J.P. Morgan survey of 100 CIOs, saying that the release of Microsoft’s Windows 8 wouldn’t be much of a catalyst for PC buying at large companies.

(We had a pretty good talk, so, arbitrarily, I left in an eighth question from our exchange.)

AllThingsD: Steve, there’s a survey out from J.P. Morgan recently that says that CIOs from large companies don’t see Windows 8 as the sort of thing that would get them buying PCs again. That, to me, could be interpreted as bad news for Dell. Is it?

Felice: I don’t think so. Operating system changes have never been a catalyst, at least not in the corporate world. Consumers and small businesses take off with it right away. Corporations have rollout schedules, and they stick to them. Some of them are just starting to deploy Windows 7. They do their three-year roll-out schedules, and when it’s time they’ll go to Windows 8. About 55 percent of our business are the larger mid-sized and up public companies. The other 45 percent are small businesses and consumer. We’ll see some buying within that 45 percent. On the others, they will go on their normal schedule.

On the enterprise side, I was just with a bunch of CIOs here, and there are some very common themes about why I think they are going to spend some money. And it’s really to continue a transformation of their own infrastructure, to take advantage of virtualization and cloud computing and bigger pipes to transport information. There is a pretty common theme that there is more opportunity to get more out of assets. There is more optimism around moving away from legacy architectures and into open systems. The whole concept of being more “open to open” is there. We view that as good, because we’re the pure play when it comes to moving to open architectures.

What are the CIOs you talk to worried about these days?

Security. It’s easily in the top three concerns. We think we added to our portfolio two of the best assets out there. One is intended to tell you how to figure out what’s going on in their world. That’s what SecureWorks, a company we acquired recently, does. It analyzes your infrastructure and tells you where your threats are coming from and how to prevent them. And then we just announced the acquisition of SonicWall. They built a nice unified threat-management platform. From my viewpoint, it helps enable the movement to open. Some people are afraid to leave the proprietary world because they think it’s more secure.

Where are you on mobile? I read that you just killed a smartphone model. Where is Dell going on the mobile front?

I would characterize the last couple of years as us experimenting with what form factors and operating environments will work. The good thing is that we’ve never overextended ourselves in mobile, yet we’ve launched a lot of products, and we’ve learned a lot from them. We’ve launched tablets — 5-inch, 7-inch, 10-inch. We’ve launched them in emerging markets first, we’ve launched them in developed markets first. We’ve launched smartphones around the world. So we have an active smartphone that we just launched in China, and one in Japan. We just end-of-lifed one in the U.S., which is what I think you’re referring to. We have a road map of other products that are coming up. We are predominantly a commercial-oriented business that has some consumer business, but the lines are blurring.

What we’ve learned is to look at the consumer from the commercial side, not the other way around. Some companies who have done well in mobility are all about consumers and entertainment. And looking at the consumer as an individual, without any regard to how they might interact on the professional side of their life. Executives of any company I talk to say these devices are driving them crazy. They don’t know what’s happening to their information, how they get it back, nor how to interact with the other devices that people are bringing into the workplace. Or how to support them and control them. No one is dealing with that. So, generally, you’re going to see Dell think more broadly about the mobile ecosystem. When you next see devices from Dell, you’ll see us thinking more about the security of them, the end-to-end aspects of managing them, from the data center to the end user.

And yet what I’m hearing from a lot of companies is that they’re just adopting iPads, mainly because the bosses have them and love them. This is how Apple is penetrating the enterprise. How is Dell going to compete with that?

It’s unique, no question. And so it’s got some infatuation aspects to it. But then I talk to these customers, and because there isn’t a lot of alternatives, what they’re tolerating is pretty interesting. They say they have one of those products. Then the problems start coming out. First, the office applications don’t work very well, and they have trouble reading PowerPoint decks. And then they can’t wirelessly print easily, and some days they’re not able to get on the network at the office. And I look at that and say, they’re tolerating a lot because they like the form factor. Our conclusion is that there need to be some alternatives.

We’ve got the Dell XPS 13 Ultrabook, and we take it around and show it to customers, and invariably the decision-maker wants one. And then he says that if he had this, he never would have bothered with the tablet. So we took a consumer-oriented product and put pro support on it, and showed that to CIOs and said that if their executive team used it, they’d get the same support as they would on their Latitude product. So when it breaks, someone will come to the office and fix it, and you don’t have to go stand in line at the Apple store. Then we put image management on it. If you want a corporate image that has to be managed, we’ll do that. Institutions want thin and light devices, but they also want the options to secure and support them. The other thing that is happening, with ARM, you’ll get even more form factors.

Well, let’s talk about the PC, then. People keep talking about the decline of the PC. The research houses keep predicting market declines, and sometimes they materialize and sometimes they don’t. But even so, the numbers — at least globally — are flat to slightly up. Yet when you drill down to different regions, you see very different stories, with different countries growing like crazy. How does Dell see this right now?

This is a weighted math problem. The lowest growth rates are in the developed world, which will remain more of a replacement cycle world. The U.S. is like that because PC penetration is very high. Then you go to India and China, where it’s very low. What’s happening is that the emerging markets, where combined, they will be bigger than the developed world. And they are still growing rapidly, so the math is going to reverse itself. You’ll still see low-single-digit growth rates in the developed world, but healthy growth rates in emerging markets — but the emerging markets will be bigger. We still see double-digit growth in China. Look at Indonesia, there’s 300 million people just starting to buy PCs. As these countries industrialize and get more mature, they just need basic computing.

And how do those markets develop?

It comes back to the first thing I talked about. These countries don’t have the legacy baggage. They’ll grow, they’ll industrialize, they’ll need more infrastructure. And what will they buy? They’ll buy standard servers, storage, and open systems. This is happening in China, and its why we’re No. 1 in servers there.

Do you think people still associate Dell with the PC and don’t give it enough credit for its greater focus on the enterprise?

I’d have to say yes. Some of that is our own doing. We have this very large direct model, and we have a tendency to talk to customers one on one. So we tend not to do a lot of brand advertising. So our consumer advertising is more visible. If you ask people randomly what portion of our business is consumer, they’d say it’s more than half, but in fact it’s only about 20 percent. And if you ask people what portion of our business is servers and storage, they don’t know, but it’s more than 50 percent.

If you combine consumer and commercial PCs, how much is that?

About half is PC, and that’s global. But I think with all the acquisitions we’ve done, and a lot more customer testimonials we’re doing, the perception is changing. We’ve done some targeted testing of campaigns where we say, ‘Do you know that Dell does this?’ The perception of Dell as an enterprise provider skyrocketed. Brazil is an interesting case, because we entered the server and storage market there before the PC market. That’s because the only way to really be successful in Brazil with PCs is to have your own manufacturing there, because of the stiff tariffs. So in Brazil, Dell is thought of as an enterprise company. You’ll see more of a commitment this year to do more brand-oriented advertising around the enterprise.

HP shares surged by more than 7 percent, or $1.69, today to $25.10, mainly on a positive report on the state of its personal computer business from the market research firms Gartner and IDC.

As I noted yesterday, HP saw its share of the global market grow fractionally, according to the reckoning of Gartner, at the expense of Dell, Acer and Asus, while China-based rival Lenovo grew even more. IDC saw similar results, and both research houses were surprised to see the overall market grow in the first quarter of the year where a market decline had been expected.

That was enough to give HP shares a long-awaited jolt. So far in 2012, HP shares have fallen a little less than 3 percent, but that comes on top of the ridiculous 40 percent drop they suffered during 2011.

Much of that decline was suffered on Aug. 19, 2011, a day after the company, under then-CEO Léo Apotheker, missed its quarterly forecasts, spent $12 billion to acquire the British software firm Autonomy and floated an ill-advised plan to spin off the very PC operations that gave investors a rare moment to cheer. Looking back now, it does make for some irony, no?

To be sure, HP’s share price has had a better than average week. On days when the Dow was mostly in the red, HP has been one of the few stocks on the board showing green all week.

And frankly an uptick in the PC business, while welcome indeed, isn’t exactly going to fix HP in any fundamental way. At least not yet. PC sales were 31 percent of overall sales in 2011, and declined slightly over the prior year. And while that made HP’s Personal Systems Group the biggest business unit at HP last year — and now combined with printers it’s even bigger — profits both in PCs and in printers are seriously under attack.

The hope lies in the enterprise and in services, and maybe in the cloud. Profit margins in the enterprise business and in the services group were roughly twice what they were in PCs. HP also made a big announcement on the cloud computing front earlier this week that would seem to put it on course to compete with the likes of Amazon in providing computing capacity in a similar for-hire fashion as the Web retailer does with its Web Services unit.

It’s hard to know how profitable that business is for Amazon because it doesn’t disclose its operational size and profit margins and lumps that operation into its $1.4 billion category labeled “other.” However it’s worth noting — as HP surely has — that Amazon’s “other” category grew by 73 percent in 2011 and nearly tripled in size from 2009. There may be a real light at the end of that tunnel yet, but there’s lot’s of work to do.

One early customer is Rob Legato, the visual effects supervisor who won an Academy Award for his work on the Martin Scorsese-directed hit motion picture “Hugo.” Legato will be talking about ioFX with Fusion-io chief scientist and Apple co-founder Steve Wozniak at a conference in Las Vegas next week.

Fusion does some cool stuff with flash memory. Here’s the part where I roll out the old metaphor that has served me so well: In pretty much any computer, you can think of the processor as a fast-moving, highly efficient, type-A personality, constantly in a hurry, and always waiting impatiently for the rest of the system to give it more work to do. The slowpoke in the deal is the hard drive, which, though it’s already spinning at a super fast rate, just can’t get data to the processor fast enough. So the processor sits around, tapping its foot and looking at its watch, waiting for the other parts of the system that feed it data to work to keep up.

In high-performance computing, where there’s more data to be crunched than in most average computing situations, this is sort of a big deal. You want the processor to be as busy as possible — mainly because the systems are so expensive, and you want to get your money’s worth out of them — but also because jobs get done faster.

So Fusion-io’s stock in trade is a series of insert cards that bring flash memory right up next to the processor. The flash chips grab great big armloads of data and hold on to it, handing it off to the processor in a way that keeps it happy and busy and not impatiently waiting — at least not so much.

We’ve seen the technology brought to bear at places like Credit Suisse, which added Fusion’s flash cards to its trading systems. And its technology is also used in data centers belonging to Facebook and Apple.

On top of that, Fusion has relationships with all the big server vendors: Hewlett-Packard, IBM, Dell and SuperMicro all sell systems with Fusion-io on board.

Workstations are essentially heavily tricked-out PCs that are used primarily in two professions: Animation and special-effects work for movies and TV and computer-assisted design and modeling, used by folks who design buildings and cars and planes and pretty much anything else you can think of. They have the same problem that servers have — agitated processors constantly waiting for the rest of the system to catch up with them.

At this point, none of the workstation vendors are offering the card as an option, but if you’ve got a professional workstation — like, say, an Apple Mac Pro, which has three PCI Express slots — you might add one of these cards and speed up your work. In the meantime, the company is working with workstation vendors to get the ioFX insert cards certified. My guess is there will be more than a few visual artists who won’t bother to wait.

Fusion-io shares are up almost 11 percent — or $2.64 — to $27.30, as of 11 am ET; not so much on this news — workstations are kind of a low-volume market — but on an analyst report from Piper Jaffray suggesting that Cisco Systems may be close to a deal to add Fusion-io’s flash technology to its Unified Computing System platform.

The report goes on to suggest that Cisco could, over the next three or four quarters, become one of Fusion’s bigger customers, along with Facebook and Apple, and could account for more than 10 percent of Fusion’s business — which could, in turn, lead to a doubling of revenue this year. For the record, sales were $197.2 million in Fusion’s fiscal 2011. Do the math.

Obviously, that’s not the part that surprises me. But here is the bit that did: When you add up all those expenses over a server’s lifetime, labor costs amount to about 70 percent of the total, according to IBM. If you had asked me, I would have guessed the cost of power would outweigh the cost of ongoing labor. Silly me.

I talked with IBM’s Steve Mills about this earlier this week. He’s Big Blue’s senior vice president and group executive for Software and Systems. It’s not uncommon, he says, for a company to take weeks or even a month between a server’s arrival and its deployment.

IBM today announced a hardware system it calls PureSystems that can cut that deployment time to hours and reduce the lifetime labor cost associated with the server by about one-third.

Basically what IBM is doing here is bringing to bear its expertise in services. Having done so well running IT services for a few thousand different companies, it has learned a thing or two about efficiency.

And it makes perfect sense when you consider that much of IBM’s $107 billion in revenue is derived from its services business. Now it’s taking some of that learning and applying it to its hardware and software business, which accounts for about 40 percent of sales.

The key feature, Mills told me, is something called the Flex Systems Manager, which is some IBM-made software that automates a lot of the set-up and maintenance work that traditionally has to be done more or less manually by one or a team of IT managers. “The purpose of the code is to do discovery. … Can I locate every piece of hardware in the frame? What are the rules for configuring it? Can I locate all the software I need and what are the rules for configuring that?” Mills told me.

All that data has been gathered into a single screen that makes the relevant information available at a glance. Mills says the system can be up and running within four hours of arriving at a company’s loading dock. That’s a bold claim.

It’s all based around patterns that IBM has seen over and over again for different types of deployments and configuration options. See them often enough and you can develop software scripts that take a great deal of the manual labor out of the process.

Sometimes companies have their own unique or wonky business processes that even someone as experienced as IBM hasn’t seen before. If that’s the case, a company can craft its own pattern and translate that into software that can automate a process that’s unique to its business or internal rules.

IBM has also teamed up with 125 independent software vendors or ISVs to develop their own patterns that clients can quickly download in order to get up and running. (IBM put out a video on that, which I’ve taken the liberty of embedding below.)

It’s also pretty diverse from a computing standpoint. IBM being IBM, the system has different hardware options, including processors from Intel or its own Power line of chips. There are also three OS options: Windows, Linux and AIX, IBM’s proprietary flavor of Unix. There’s also a wide choice of virtual machine managers: VMWare, KVM, Microsoft’s HyperV and IBM’s own PowerVM.

In the end, the point is to allow a company’s employees to spend more time working on their key lines of business and less time making the computers run properly, which is at its most basic level the IT shop’s highest mission.

It’s not so much about any shifts in sentiment or intention for spending among large companies, it’s just that the dollar is currently strong against other currencies, so U.S.-domiciled companies are in a weaker position when selling to customers in other countries. When accounting for that discrepancy, Gartner says it expects overall growth in spending of 2.5 percent, but on a constant currency basis, the digits would be transposed for a healthier 5.2 percent.

Spending by governments will likely contract, thanks in no small part to the austerity measures being put in place in the euro zone.

The highest rate of growth will be in the telecommunications equipment sector, which will grow by nearly 7 percent, Gartner says. A lot of that is thanks to mobile going to mobile, but also to speeding up networks. See the rest of the segments and their expected rates of growth in the table I screengrabbed from the press release, below:

Earlier this week, Gartner singled out IT spending in emerging economies, which it said will amount to an impressive trillion and change by itself. And last week we got a glance at the sentiment from 100 CIOs at large enterprises, courtesy of J.P. Morgan, indicating that growth is likely to tick upward this year. Up is good.

Well, today we heard from another bank, and its opinions about Intel’s Romley chip and what it means for data center spending couldn’t be more different. Chris Whitmore, an analyst with Deutsche Bank Market Research, published a note to clients today, arguing that Romley will indeed spur a new round of spending in corporate data centers, and that it will have an equally strong secondary effect on the fortunes of enterprise storage companies, specifically EMC and NetApp.

One of the things that Romley will encourage, Whitmore writes, is a growth in the density of virtual machines running in each server. (Remember that, more often than not, a physical server is virtualized or subdivided into many virtual servers, allowing each machine to act like several machines.) More virtual machines allows you to consolidate your physical machines and add more in the same footprint if you want, which in turn means more computing work getting done overall. Whitmore estimates that, in general, data centers will boost their workloads by 20 to 25 percent by the end of next year.

Roughly 26 percent of Romley chip purchases will be used in these virtualized environments, Whitmore estimates. And that tends to spur demand for storage to support the virtual machines. In fact, the growth of terabytes worth of storage products shipped mirrors closely the unit growth of servers. (See the graphic, below, which I screen-grabbed from the report; click to see it bigger.) In short, it’s good news for NetApp and EMC. Whitmore says both are taking share from other vendors, including IBM, Hewlett-Packard and Dell, with sales growing at north of 20 percent a year — a growth rate that’s higher than that of the overall market, which grew 14 percent last year. He rates shares of both EMC and NetApp a “buy,” with price targets of $35 and $60, respectively.

Great news for EMC and NetApp, but what does it mean for Intel? Whitmore says to expect a mixed bag. Companies wanting to boost their use of virtual machines will be buyers. Companies that aren’t into virtualization so much, maybe not. “We believe our estimate of x86 servers shipped into virtual environments growing from 21 percent in 2011 to 26 percent in 2013 could prove conservative,” Whitmore writes. “As a result, although we expect Romley to have a relatively muted impact on overall server unit demand, we do expect it to drive another leg of virtual machine growth.”

She was in New York yesterday for a lunch with a few journalists, primarily to talk about Intel’s latest generation of Xeon processors for servers. Before they were officially released, these chips were known primarily by their code name, Romley, and often still are when analysts and others talk about them, because the code names are easier to remember than the product names, which, for the record in this case, is Xeon Processor E5-2600.

The Romley generation of chips builds on the foundation of Intel’s previous generation of server chips, known by its code name, Nehalem. The main benefit, which Bryant and other Intel execs and customers explain in lengthy detail in this video from the product’s launch in San Francisco three weeks ago, is that the chip is 80 percent faster at certain computing jobs, according to independent tests. At the same time, it is 50 percent more energy efficient.

Executives who operate data centers generally worry about two things: The raw number-crunching power they can squeeze out of the chips in their densely packed racks of servers, and the cost of the power required to keep them running and also keep them cool. So the introduction of a chip that can get more work done in a shorter amount of time while using half as much power is, at first glance, a pretty compelling moment to consider an upgrade.

And yet, that doesn’t seem to be the case. In a survey of 100 CIOs of large enterprises conducted by the investment bank J.P. Morgan, 91 said that they didn’t see Intel’s Romley chips as much of a catalyst for upgrades in their data center. Most seemed happy with the Nehalem-generation chips they had just purchased in servers during the past two to four years.

I was eager to share this result with Bryant to see what she said, and was too rude to wait until the salad course had arrived. For a moment, she was surprised — 91 percent is a pretty large percentage, after all. But the surprise didn’t last more than a few seconds.

Off the top of her head, Bryant rattled off the following, which I’m paraphrasing. On a recent visit with a customer who happens to be one of the 100 largest companies in the world — she wasn’t at liberty to identify it — Intel found an interesting result.

A check of the company’s data centers found that 36 percent — a little more than a third — of its servers were using chips that were more than four years old, meaning that they dated back to the dim mists of the days before Nehalem.

Those servers, it turned out, were responsible for consuming 65 percent — nearly two thirds — of its power supply. And how much computing muscle was the company getting for all this power? Precious little: The servers in question provided only 4 percent of the computing power of its infrastructure. To sum up: A third of the data center footprint was eating up two-thirds of the power budget, but providing less than one-twentieth of the overall computing capacity. Those older chips just aren’t pulling their weight.

“This is is extremely typical of what we’re seeing,” Bryant told me. Even so, she conceded that a customer running a larger percentage of more-recent chips — Nehalem and its newer variants — in its infrastructure might not see the sufficient bang for the buck of an upgrade that anyone running a lot of servers with older chips probably would.

I have to admit it was a pretty good answer.

It comes in the form of a survey of 100 CIOs by the investment bank J.P. Morgan. The firm finds that, on average, CIOs say they’re going to boost their IT spending by 2.7 percent this year, up from 2.4 percent in 2011. That may not seem like a big change, but here’s why its important: It’s the first time in a few years that the same survey has detected a directional change in sentiment. CIOs are at long last saying they intend to boost their spending on IT, rather than trimming it back and back and back as they have for the last several years. “In our prior CIO survey in September 2011, the directional movement indicated a reduction in planned spending growth, as at that time CIOs were starting to pare back on spending during more uncertain macroeconomic conditions,” the firm says in its report, which was shared exclusively with AllThingsD.

The optimism is a bit more pronounced when you see it expressed in the graphic below, which I grabbed from raw survey results. More than two-thirds of the CIOs surveyed said they planned to boost their overall IT spend this year, most of them by a modest 1-5 percent, but some by more than 10 percent. Last year, the figure was 58 percent, but it usually swings up by only 3 or 4 percentage points, analyst Mark Moskowitz told me.

“The overall tone we got in our conversations with these CIOs was more optimistic than it has been in a while,” Moskowitz said. “They have the green light to start projects that are going to take several quarters to get done. Most aren’t willing to do that when they’re worried their overall business is going to roll over.” A lot of that has to do with more confidence in the overall macroeconomic environment.

And where will that growth be? And, perhaps more importantly, where won’t it be? Software, storage and security are looking like big spending priorities among the CIOs surveyed. Business intelligence tools and getting mobile devices integrated are also high on the list — there’s that ongoing trend toward “bring your own device” (BYOD), rearing its persistent head once again.

Employee-purchased iPhones, iPads and Android devices are supplanting company-assigned BlackBerrys. “BYOD is real,” Moskowitz says. “And you have to assume that Apple is going to be the one that benefits the most from it.”

Other winners include EMC and NetApp, as they play strongly in networked storage. Server virtualization — making one physical server act like dozens of servers, using software to subdivide its resources — also has a lot of room to grow, the survey finds. That’s good news for VMware.

Losers? There are few. Intel’s new Romley chip isn’t going to be as big a deal in spurring spending on new servers: In fact,91 percent of CIOs surveyed said they don’t expect Intel’s new chip to drive new spending in the data center. Intel’s last big upgrade, Nehalem, did change the game, Moskowitz says. The trouble is, most of the companies using Nehalem-generation chips in their servers are happy with them, and are unlikely to bother with the expense of an upgrade, for now.

Nor is Windows 8 going to cause a new round of PC buying, as both Hewlett-Packard and Dell are hoping. “A new version of Windows hasn’t caused a PC upgrade cycle since 1995,” Moskowitz told me. Asked directly if Windows 8 was expected to drive a major PC upgrade cycle, 78 percent of the CIOs in the survey said no. In fact, at least 30 of the CIOs in the survey said they were still working on deploying Windows 7. Ouch. Perhaps it’s too much to ask for things to be looking up for everyone all at once.

(Image is a movie poster for the 1935 British film starring Cicely Courtneidge, but the title song in this case is, well, awful. What I really wanted was an image of Fred Astaire dancing with Joan Fontaine to the underappreciated George and Ira Gershwin tune of the same name, from the 1937 film “A Damsel in Distress,” but I could find nothing suitable. So — loving Gershwin tunes as I do — just for fun, I’ve embedded both Astaire and Billie Holiday singing the tune, below, courtesy of Grooveshark. Yes, I’ll admit, sometimes I have a little too much fun in this job.)

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:

HP Summary Motion

Oracle Summary Motion