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Oracle-HP trial will trace an ill-fated partnership

Stephen Lawson | June 4, 2012
After Oracle and Hewlett-Packard enjoyed a long and fruitful partnership in enterprise IT, it's hard to find anything that hasn't gone wrong with their relationship over the past two years.

That's when HP filed the suit being heard next week. It wants a court to declare that the so-called Hurd Agreement reached in September 2010 is a binding contract and that Oracle breached it by dropping Itanium development. HP also accused Oracle of libel and defamation, saying the company lied when it said that Intel was planning to kill Itanium. HP said Oracle was pulling development from Itanium in a bid to pull customers over to its own hardware, which came from the Sun acquisition.

Oracle countersued, saying HP had deceived it regarding the future of Itanium and hid the fact that the platform was on the way out. Oracle called the Hurd Agreement a mere "corporate hug," and said it deliberately did not negotiate a binding commitment to Itanium development. It wants the Hurd Agreement to be scrapped. Oracle also made a defamation charge of its own, saying that HP's allegations were false and hurt its reputation.

Oracle also said HP was guilty of fraud for holding back information while negotiating the Hurd Agreement. Among the facts Oracle says HP hid during the talks in 2010 was that the company was planning to hire two executives who would be dead-set against Oracle. Soon after the deal was signed, HP picked as its new CEO Leo Apotheker, who led German software maker SAP when a division of that company illegally downloaded information from Oracle's website. In addition, HP hired Ray Lane, a former Oracle executive who had clashed with Oracle Chairman Larry Ellison years earlier, as non-executive chairman. Lane is now executive chairman, while Meg Whitman has replaced Apotheker as CEO.

Both companies say they have their common customers' interests at heart and that the other side is hurting those users. But the dispute itself is probably hurting customers more than any verdict could hurt either company, Pund-IT's King said. While vendors want to push their own products, enterprise IT executives have their own agenda.

"What they're really looking for is predictability. Not only predictability of the systems that they use, but predictable behavior on the part of the trusted vendors that they work with," King said.

Now that the feud has gone this far, there may be no good outcome for anyone, he said.

"Even if a suit found for one company or the other -- or, in particular, if it found for HP -- you have to wonder about how valuable a relationship that Oracle was forced back into would really be for both companies."

 

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