June 04, 2012

HP and Oracle, two one-time partners turned bitter rivals, are battling it out in court over Oracle's decision to end support for HP's Itanium-based servers - and it's likely to get very ugly.

The battle began after Oracle’s decision last year to stop developing software for HP’s high-end business computers using the Itanium chip from Intel Corp. HP is seeking up to $4 billion in damages, and the trial comes just days after Oracle lost a separate case against Google over smartphone technology.

Top executives from both Oracle and troubled technology firm HP, including Oracle CEO Larry Ellison and president Mark Hurd could take the stand.

In court last month, Santa Clara Superior Court Judge James Kleinberg compared the case to a divorce, saying "this case appears to be the end of a marriage" between the technology giants.

The lawsuit follows Oracle’s decision to stop developing software for use with Itanium last year, saying chip maker Intel made it clear that the chip was a dying platform and that it was turning its focus to its x86 microprocessor.

However HP argues that Oracle and HP had agreed that support for Itanium would continue, without which the HP equipment using the chip would become obsolete, Reuters reports.

Oracle says HP's claims cannot support its damages estimate, and has countersued HP for false advertising, claiming that HP failed to disclose the terms of its contract with Intel.

According to Marketwatch, the high-end Itanium servers can cost hundreds of thousands to a million dollars each and are used largely by companies and institutions doing a lot of heavy data crunching.

But the battle with Oracle is important for HP as it pushes to become a bigger player in the higher-margin areas of the corporate IT market, Meg Whitman, the new HP chief executive, said last week.

The ongoing raging battle between the two technology titans has at times turned personal.

Oracle chief Larry Ellison expressed outrage over HP’s decision to oust CEO Mark Hurd who left amid allegations of a sexual harassment complaint. Ellison then hired Hurd to be one of his Oracle co-presidents, which gave rise to a lawsuit from HP. They later reached a settlement.

HP later argued that the settlement in effect meant that Oracle couldn’t just abandon Itanium.

Santa Clara Superior Court Judge James Kleinberg will start off by deciding whether there is a contract between HP and Oracle, and its terms, HP spokesman Michael Thacker said.

According to Reuters, if Kleinberg decides in HP's favor, then a jury will decide whether Oracle violated the contract, and damages, Thacker said.

ABOUT THE AUTHOR
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in ...