June 4, 2012

I Can’t Make You Love Me If You Don’t

Michael Harper for RedOrbit.com

The court room drama between Hewlett-Packard and Oracle has begun today, as the former is suing the latter for not abiding by a contract which was allegedly struck between the two parties. HP claims they had struck a deal with Oracle to develop software which would run on HP´s Itanium servers. HP´s Itanium is a high-performance Intel chip which never gained much traction in the marketplace. HP sued Oracle and today, their case was opened in San Jose, California, beginning with opening statements from lawyers. HP is now seeking a court-order to require Oracle to continue writing the software for the Itanium-based servers against their will. Adding insult to injury, HP is also hitting Oracle where it hurts, asking for nearly $500 million in damages, according to Bloomberg.

If HP is unable to convince the San Jose court to order Oracle to continue making the software, they say they are at least owed $4 billion in damages, accounting for projected losses through the year 2020, according to an unnamed Person Familiar With the Matter.

Oracle, who just lost their court battle with Google last week over the way their Android OS connects to the internet, decided to stop developing the Itanium chip last year when Intel announced they would stop making the chip, focusing instead on the x86 microprocessor.

HP is none too pleased with this decision, saying that without Oracle´s software, any Itanium-based equipment would become obsolete. Furthermore, HP is saying Oracle further affirmed this agreement during another lawsuit over Oracle´s hiring of Mark Hurd, who had previously been fired by none other than HP.

Just 6 months after Hurd made his way to Oracle in 2010, they announced their decision to cease development for the Itanium chip.

“It is impossible to offer best products going forward without porting new versions of those products,” said Jeffrey Thomas, HP´s lawyer.

Oracle is returning the favor, suing HP for false advertising, claiming the company failed to tell Intel, maker of the Itanium chip, about any partnership between HP and Oracle. Furthermore, Oracle is saying HP cannot support their damages estimate of $4 billion.

Before this case goes in front of a jury, Santa Clara Superior Court Judge James Kleinberg will first decide if there was, in fact, a contract between these two warring parties and, if so, what terms the two agreed to. For their part, Oracle is insisting no such contract exists, a sentiment expressed by CEO Larry Ellison last week at the All Things D conference.

Mark Hurd is the common denominator between these two parties, as he´s played for both teams. According to Bloomberg, he could potentially be called as a witness by both sides. In fact, HP has said they will call him out to testify about Oracle´s conduct before and after their Itanium announcement. Oracle, on the other hand, wants to call him out to testify about the relationship betwixt the two companies before and after he switched teams. Oracle may also call out their CEO to testify as well. While Intel and Oracle have refused to comment thus far on this case, HP told Bloomberg in an email, “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.”