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HP's Livermore recalls close partnership with Oracle, now soured

The former head of HP's enterprise business says she talked regularly with Oracle co-President Safra Catz

By Stephen Lawson
June 5, 2012 12:12 PM ET

IDG News Service - Former Hewlett-Packard enterprise business chief Ann Livermore recalled a close working relationship with Oracle co-President Safra Catz, and the moves by Oracle that eventually eroded the companies' partnership, in a Silicon Valley courthouse on Monday.

Livermore and Catz were the top-level executives in charge of HP and Oracle's cooperation in developing and selling enterprise hardware and software, said Livermore, who ran HP's enterprise business from 2004 until 2011. She testified in a http://www.infoworld.com/d/the-industry-standard/oracle-hp-trial-will-trace-ill-fated-partnership-194671 over HP's Itanium server platform, as Catz looked on. Livermore is scheduled to continue her testimony on Tuesday.

Livermore and Catz might have talked on the phone once per quarter or several times in one week, depending on what the two companies were working on, Livermore said. Among other things, they would discuss what was going well or not so well at either business. "We had quite candid and open conversations," Livermore said. She is still a member of HP's board.

The companies' work together has generated billions in revenue, Livermore estimated. While HP produced millions of enterprise servers, Oracle wrote the software that ran on most of them. In particular, Livermore estimated that 84 percent of HP's Itanium-based servers run Oracle's database software. HP developed Itanium with Intel to run mission-critical applications such as databases, and that chip is still at the heart of the servers from HP's Business Critical Systems (BCS) division.

But Oracle's acquisition of server maker Sun Microsystems, announced in 2009, and its hiring of former HP CEO Mark Hurd right after he was fired from HP in September 2010, eventually spoiled the companies' relationship.

When Oracle announced it would buy out the struggling Sun, Livermore said she and HP were concerned about how it would affect the competitive environment. But it also gave Oracle a hardware portfolio under its roof. "We also weren't sure how Sun would act, moving forward, in terms of making their software available on our platforms," Livermore said.

She raised those concerns several times with Catz, who said after the acquisition closed in January 2010, "give us a few months," Livermore said. On April 16, the two met at Oracle's headquarters and then went into a larger meeting with nine executives from HP and 10 from Oracle, aiming to figure out how the companies would work together as new competitors as well as partners.

Catz assured Livermore that Oracle would remain first and foremost a software vendor, would continue to provide software to HP and other third-party hardware makers, and would not give its software sales channels incentives to sell Oracle servers, Livermore said.

"I believed what she said," Livermore told the court. "Our concerns were definitely reduced."

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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