Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Oracle to Court: HP Was Sneaky When We Made That Deal

Last year, software company Oracle and IT giant Hewlett-Packard settled a lawsuit stemming from Oracle’s hiring of Mark Hurd, a former HP CEO who resigned suddenly amid what might charitably be called a kerfuffle only to land at Oracle a month later. As part of the agreement, there was some language reaffirming a long-standing partnership under which Oracle would continue making software that runs on hardware using Intel’s Itanium chip.

What Oracle didn’t know at the time it negotiated the settlement to the Hurd Affair — it says in a new court filing today — is that HP was about to hire Léo Apotheker as its new CEO and Ray Lane, the former Oracle COO and president, as its new chairman. Had it known, it wouldn’t have agreed to anything of the kind. To that end, Oracle says, HP obtained its agreement from Oracle by way of fraud.

The whole Itanium thing is a very long story, but today’s filing shows it’s really not about Oracle supporting the chip or not. Yes, the terms of a contractual agreement that may or may not have been in force is the issue at hand, but Oracle’s filing makes clear that the issues are more about not wanting to do business with Apotheker and its right to walk away from what it considered an informal business arrangement.

That’s just part of a rather juicy counter-complaint filed by Oracle’s lawyers today in HP’s lawsuit over Oracle’s decision to walk away from Itanium-friendly versions of its software. (The 20-page filing is embedded below via Scribd.) But here’s the money quote:

Oracle would not have signed on to any settlement of the Hurd litigation had it known this information, and certainly the last thing it would have ever agreed to do was “reaffirm” a partnership that on the HP side would be led by Messrs. Apotheker and Lane. To the extent HP obtained the rights it claims in this suit, it did so by fraud.

So why is HP fighting so hard on this issue, especially given the fact that very few people buy Itanium-based systems in the first place? Oracle’s theory: Because it’s profitable.

HP is one of the last hardware or software companies in the world that remains seriously committed to Itanium, and it does so solely because Itanium support agreements likely account for a large percentage of its profits. Likely even Intel would end-of-life the Itanium platform of its own accord and focus on its x86 architecture; almost certainly, Intel continues to develop Itanium chips only at HP’s behest.

HP and Oracle concluded their settlement on Sept. 20, a mere 10 days before Apotheker was named as HP’s CEO.

Of course you know Apotheker and Oracle have something of a checkered history. Apotheker used to be co-CEO of SAP, which was caught stealing Oracle source code and was ultimately forced by a court to pay a few billion dollars in damages.

Lane on the other hand, as a former Oracle president infamously pushed out by CEO Larry Ellison, has been a frequent Oracle critic over the years. Suddenly, two of Ellison’s least-favorite people were at HP’s helm. Who needed these partnerships anyway, Oracle argues.

HP, Oracle says, sought to induce it into what it calls “an apparently perpetual and cost-free software development commitment for the Intel Itanium platform” while concealing “that it was days away from hiring a new board chairman, Ray Lane, and new CEO, Léo Apotheker, who HP knew Oracle distrusted so completely — and justifiably — that partnership would be impossible.

Well, there you go. Asked to comment on Oracle’s claims, an HP spokeswoman sent the following statement:

Rather than focusing on what is right for our joint customers, Oracle is relying on invented excuses to cover up its blatant disregard for its legal obligations. HP is resolved to enforcing Oracle’s commitments to HP and our shared customers and will continue to take actions to protect its customers’ best interests.

And here’s the filing.


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