HP-Oracle Itanium Settlement Talks Fail, Trial Resumes

Executives at Hewlett-Packard and Oracle failed to settle their differences for a second time, in the legal bust up over Intel’s Itanium platform.

The trial between the two has now resumed this week in a California courthouse.

Settlement Talks

A two-day recess in the trial was called to allow for HP and Oracle officials to try to settle their differences, according to a report by Reuters. Quoting an unnamed source, the news site said that Santa Clara County Superior Court Judge James Kleinberg, who is running the trial, had urged the two companies to meet with Judge Brian Walsh for another round of settlement talks.

Walsh reportedly had overseen similar talks in May, which also failed to create an agreement.

With no settlement reached, the trial, which began 4 June, resumed 13 June. At issue is whether Oracle violated a contract with HP when officials last year announced that the enterprise software giant would no longer support Intel’s Itanium chips platform, which powers HP’s high-end Integrity and NonStop server lines. HP and Oracle share about 140,000 customers, many of whom run Oracle’s enterprise applications – including database software – on HP’s Itanium-based servers.

The crux of the disagreement is an agreement that was reached in 2010, after HP filed suit following Oracle’s hiring of ex-HP CEO Mark Hurd as president. HP claims that in the written settlement of the lawsuit, Oracle agreed to continue supporting technologies used by joint customers, including the high-end Itanium-based systems. However, Oracle executives claim that the paragraph at issue in the settlement is not a binding contract.

Oracle officials said they ended software development for Itanium after being told by Intel engineers that the chip giant was planning to shut down Itanium development. Both HP and Intel disputed the claim, saying that Itanium road maps run through much of the rest of the decade.

Hurtful Move

HP officials argued that Oracle’s move was made in hopes of harming HP’s high-end server business and convincing joint HP and Oracle customers to migrate their workloads to the SPARC/Solaris systems, which Oracle inherited when it bought Sun Microsystems in 2010. Oracle executives accused HP of lying to customers and the industry about the future of Itanium, saying HP paid Intel more that $488 million to keep the platform alive.

HP, which has seen its Business Critical Systems (BCS) group take a revenue hit since the Oracle decision, wants the courts to order Oracle to continue supporting Itanium and pay $4 billion (£2.6bn) in damages. The BCS group saw its revenue drop 23 percent in the first quarter. HP executives blame the drop on the Oracle case, though analysts – while agreeing that Oracle’s move has hurt HP – also have noted that sales of Unix-based systems industry-wide have fallen.

Some businesses using HP’s Itanium-based systems have said they are looking around at alternatives, particularly in light of the upcoming release later this year or early next of Oracle’s 12c database, which will be the first not to support Itanium. Oracle is not the only major software maker to abandon Itanium; its decision followed similar ones by Microsoft and Red Hat.

During testimony 13 June, jurors reportedly heard from Timothy Aylott, a software executive with HP who spoke about Oracle’s work in the past to migrate its software to HP-UX, HP’s Unix variant. They also heard from Martin Fink, senior vice president of HP’s BSC unit, who testified on the importance of Oracle’s software to HP’s high-end Itanium systems. Fink reportedly is expected to continue testifying 14 June.

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