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Oracle-HP ruling shows risk of IT vendor partnerships

Business terms need to be spelled out in detail, analysts say

By Stephen Lawson
August 2, 2012 10:31 PM ET

IDG News Service - The strongly worded order by a California judge saying Oracle has to keep porting its software to Hewlett-Packard's Itanium-based servers is not the end of the nasty legal battle between the two companies, but it could have an effect on the broader IT industry.

Oracle has to keep porting its database and other software to servers based on HP's Itanium HP-UX platform for as long as those servers remain on sale, Judge James Kleinberg of the Santa Clara County Superior Court wrote in a proposed ruling on Wednesday. Oracle said it would appeal the decision, and it has 15 days to do so.

The judge's decision concludes the first part of the trial, which was limited to determining whether the two companies had a contract and what its terms were. Assuming the decision becomes final, the case will move on to a second phase in which a jury will determine whether Oracle breached that contract and what damages it should pay HP. The next court date will be a case management hearing on Aug. 22.

But Kleinberg's order on Wednesday signaled that the so-called Hurd Agreement, which the companies negotiated after former HP CEO Mark Hurd left the company and joined Oracle, will be taken seriously as a legal commitment. Oracle co-President Safra Catz had dismissed the first part of the document, in which the companies said they would keep working together just like before the fight over Hurd, as a non-binding "public hug."

The judge saw things otherwise. He interpreted the Hurd Agreement as a contract, pointing to a key sentence in the first paragraph: "Oracle will continue to offer its product suite on HP platforms ... in a manner consistent with that partnership as it existed prior to Oracle's hiring of Hurd."

"The sentence can only be reasonably interpreted as requiring Oracle to continue offering its product suite on HP's Itanium platforms," Kleinberg wrote. He then said Oracle must continue porting all products that it made available for Itanium at the time of the deal, on Sept. 20, 2010, until HP discontinued the chip platform. That would include all new releases, versions and updates, he wrote.

The lengthy, dramatic and often personal conflict between HP and Oracle is not quite like any other relationship in the IT industry. The companies were close partners for years until Oracle acquired Sun Microsystems at the beginning of 2010, which sent the database software giant into hardware competition with HP. After Hurd left HP in August of that year and joined Oracle as co-president in September, things went farther downhill.

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