HP executive fuming at Oracle dropping Itanium

SAN JOSE, CALIFORNIA– Hewlett-Packard enterprise chief Ann Livermore was “furious and appalled” when she saw Oracle’s announcement that it would end development for HP’s Itanium server chips, she said in a San Jose, California, court on Tuesday.

Oracle announced the decision in a press release issued March 22, 2011. HP later sued the company, saying the move had violated an agreement that HP and Oracle reached in the wake of Oracle’s hiring of former HP CEO Mark Hurd in September 2010.

Livermore was in Virginia, preparing for HP’s annual shareholder meeting, when she saw the press release on the Web, she said.

“It came out in the middle of the night. I saw it the next morning,” Livermore said. She immediately called Oracle co-President Safra Catz, with whom she had worked on the so-called Hurd Agreement and on other issues over the years of HP and Oracle’s partnership.

“I told her that I was furious. I asked her, ‘Do you know what you’ve done?'” Livermore said.

She said that in contrast to most of their conversations, Catz was unusually quiet and gave the impression of being uninformed.

Catz said, “I need to go talk to Larry about this,” according to Livermore, referring to Oracle CEO Larry Ellison.

On Livermore’s second day on the witness stand, her questioning by both HP’s and Oracle’s lawyers focused on a joint pledge in the Hurd Agreement that Oracle would keep making its products available for HP’s server platforms. Both were probing how that language got into the deal. In this first phase of the trial, Judge James Kleinberg will determine whether the Hurd Agreement constituted a contract and what its terms may be.

Livermore said the partnership pledge lacks details because she and Catz decided not to include them. Their intent was simply to reaffirm the good relationship the two companies had enjoyed before Oracle hired Hurd, she said.

“I agreed with her that we’d leave the specifics out,” Livermore said. “Once we tried to include specifics, we were bound to leave something out.” Complicating the matter, HP sent one draft of the agreement to Oracle with detailed terms, which Livermore said got through by mistake because she didn’t review it. That wording was then removed.

Catz has called the support pledge a “corporate hug” rather than a binding contract on Oracle to keep porting its database, middleware and applications to all future versions of Itanium. Livermore said it is a contract and became necessary because of the extraordinary events that disrupted the relationship between the companies: Oracle’s Sun acquisition and hiring of Hurd.

During cross-examination on Tuesday by Oracle attorney Dan Wall, Livermore said HP had not considered asking Oracle to sign a contract for porting its software to Itanium until the time of the Hurd Agreement because that wasn’t the Silicon Valley way. With a handful of exceptions, porting software to another company’s hardware platform is not done under written contracts unless money changes hands, she said.

“That had not been the way that Oracle and HP operated,” Livermore said.

Wall also grilled Livermore about HP’s Itanium partnership with Intel, which Oracle claims is nothing more than HP keeping the chip line on life support through cash infusions. Livermore said HP’s support for Itanium, in the form of $88 million per year to Intel, is a partnership investment in a product that’s important to HP.

At one point, Wall asked Livermore if she had ever heard use of the word “Itanic,” which critics have used to compare Itanium to the ill-fated luxury liner Titanic.

“Not by anyone I like or respect,” she said.

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