Sunday, April 22, 2012

Oracle Executives Regret Sun Acquisition

Oracle Sun logoAccording to a filing by HP in a dispute with Oracle over the porting of its software to the Itanium platform, HP stated that Oracle had gone with an aggressive strategy against HP's Itanium servers after sales of competing Sun's Sparc servers have dropped considerably. In addition to that, HP stated that Oracle executives believed that the 2010 acquisition of Sun Microsystems was a mistake.

Oracle announced back in 2011 that it would not support HP's Itanium platform on future products, which marked the latest move by the company that made running software on the HP platform more expensive. HP also 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 decided not to support servers running the Itanium processors due to the fact that the processors were nearing the end of their life. When Oracle made this move, HP decided to sue because HP uses the chip in its high-end servers. Oracle CEO Larry Ellison made the decision not to port the software, a decision that was only shared with a few Oracle executives. Not even Oracle's Senior Vice President of Database Development was consulted on the issue.

Last month HP filed for a pretrial ruling that Oracle is contractually required to offer future versions of its software on the Itanium platform and claimed that an agreement between Intel and HP ensured that the Itanium was not an end-of-life processor. Oracle, on the other hand, stated that HP fraudulently induced it to enter into the agreement, stating that the company withheld information that it was secretly paying Intel $88 million per year to artificially continue the Itanium processor's life span.

The most recent filing points out that Intel had refuted Oracle's claims regarding the supposed end-of-life of the Itanium platform. A testimony from the Intel Executive in charge also made it clear that, "far from being near its demise, Itanium had just gained new vitality when Oracle made its announcement."

Oracle's internal sales communications shows the real reason the company decided to drop support for Itanium. The sales force was exhorted to take full advantage of the Itanium announcement according to the new filing, which quoted a sales executive from Oracle saying that, "we are the ones dictating IT/Itanium obsolescence."

According to a statement from HP, "This new information that has come up during the discovery period further underscores Oracle's behavior as 'anti-customer'. 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." Deborah Hellinger, spokeswoman for Oracle, declined to comment on the filing.

Source: Computer World - HP: Oracle executives believed Sun acquisition was a mistake

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