HP: Oracle executives believed Sun acquisition was a mistake

IDG News Service - Oracle decided on an aggressive strategy against Hewlett-Packard's Itanium servers after sales of competing Sun's Sparc servers had been in a free fall, and Oracle's executives stated internally that the company's 2010 acquisition of Sun Microsystems was a mistake, HP said in a filing Monday in its dispute with Oracle over the porting of its software to the Itanium platform.

Oracle's March 2011 announcement not to support the Itanium platform on future versions of its products was the latest in moves by Oracle which among other things made it more expensive to run its software on the HP platform, according to the filing.

HP submitted the filing to the Superior Court of the State of California, Santa Clara County, in opposition to Oracle's motion for summary adjudication.

Oracle said it decided not to support servers running Intel's Itanium processors on new versions of its products including its database, as the processors were nearing end of life. HP, which uses the chip in its high-end servers, sued Oracle in June.

The decision not to port the software to Itanium was made by Oracle CEO Larry Ellison and shared with only a few Oracle executives, according to HP's filing. Oracle's senior vice president of database development was not consulted about the decision and is said to have testified that his group had not even considered ceasing software development on Itanium because it "was still, in our opinion, a platform that a significant number of customers were using, and so we didn't think there was a business reason to consider not supporting it."

HP filed last month for a pretrial ruling that Oracle is contractually required to offer future versions of its software on the Itanium platform, claiming that an agreement between HP and Intel ensured that the Itanium was not an end-of-life processor.

Oracle previously alleged that HP had fraudulently induced it to enter into the agreement, as it withheld information that it was secretly paying Intel US$88 million a year to artificially continue the Itanium processor's life span.

The details of how HP delivered its products, including its arrangements with Intel, are irrelevant and cannot support a claim for fraudulent non-disclosure or false advertising under either federal or state law, HP said in its motion last month.

The filing on Monday points out that Intel had refuted Oracle's claims regarding Itanium's supposed end-of-life, and testimony from the Intel executive in charge made clear that, "far from being near its demise, Itanium had just gained new vitality when Oracle made its announcement."

The real reason for Oracle's decision to discontinue support for Itanium is found in the company's internal sales communications, as the sales force was exhorted to take full advantage of the Itanium announcement, according to this week's filing which quoted a sales executive from Oracle as saying that " we are the ones dictating IT/Itanium obsolescence."

Oracle spokeswoman Deborah Hellinger declined to comment on the filing. The information brought to light during the discovery period further underscores Oracle's behavior as "anti-customer", HP said in a statement. "It reinforces the fact that Oracle breached its contractual agreement with HP in a bad faith attempt to drive hardware sales from Itanium to Sun servers."

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com