Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Read the $4 Billion Paragraph That Oracle and HP Are Fighting Over

Oracle and Hewlett-Packard are continuing their fight over the Itanium chip in a California courtroom today. One document is central to that dispute, and for the first time we can see what it says, though it takes some historical unpacking to make sense of it.

Remember that the fight between the two companies had its genesis in a settlement that arose from a lawsuit HP filed after Oracle hired former HP CEO Mark Hurd as co-president. In that settlement agreement — which ended HP’s suit over Hurd — is a paragraph that is at the core of the current dispute.

Here it is:

Reaffirmation of the Oracle-HP Partnership. Oracle and HP reaffirm their commitment to their longstanding strategic relationship and their mutual desire to continue to support their mutual customers. Oracle will continue to offer its product suite on HP platforms, and 1-IP will continue to support Oracle products (including Oracle Enterprise Linux and Oracle VM) on its hardware in a manner consistent with that partnership as it existed prior to Oracle’s hiring of Hurd.

This is the $4 billion paragraph that HP has sued Oracle to enforce. The agreement has been public for a while, but it bears a rereading as the case continues today. HP contends that this constitutes an enforceable agreement that requires Oracle to continue to port its software to HP’s Itanium-based server platforms, something Oracle said in March of 2011 that it no longer wants to do.

In the document drop embedded below, you’ll see what I think is the final version of the document, along with various drafts of the settlement document drawn up by Oracle and HP lawyers, and some of the emails related to it.

Oracle basically contends that its typical porting agreements are substantially more complicated documents, and has included a porting agreement struck with HP in 2006. If nothing else, you can see how verbose and detailed typical porting agreements tend to be.

Anyhow, as I understand it, it is upon the enforceability of that paragraph that much of the case will turn. If the judge agrees that it amounts to a contract and Oracle has to honor it, then a jury will come in and determine whether or not Oracle has violated it, and, if so, how much money HP should get for its trouble. HP has argued that the right figure is about $4 billion; according to Bloomberg News, it based that estimate on an extrapolation of its losses in its Itanium business out to the year 2020. As HP CEO Meg Whitman conceded in an extensive interview with AllThingsD yesterday, this ongoing mess over Itanium is hurting HP big time.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik