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HP and Intel in secret Itanium processor pact, claims Oracle

Oracle filing described as a "desperate delay tactic" by Hewlett-Packard

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HP has secretly contracted with Intel to keep making Itanium processors so that HP can maintain the appearance that "a dead microprocessor is still alive", and make money from its locked-in Itanium customer base and take business away from Oracle's Sun servers, Oracle said in a court filing at the end of last week.

The market has never been told that Itanium lives on because HP is paying Intel to keep it going, Oracle said. Intel's independent business judgement would have killed off Itanium years ago, it added.

HP however described the filing as a "desperate delay tactic designed to extend the paralysing uncertainty in the marketplace" that it said was created when Oracle announced in March, 2011, in a breach of contract, that "it would no longer support HP's Itanium platform".

HP has made statements to the marketplace to the effect that Intel's commitment to Itanium is its own, based on its normal calculations for investing in processors that it believes have a future, Oracle said in a filing before the Superior Court of the State of California for the County of Santa Clara.

Intel maintains distance

A public redacted version of the filing was made available to The Wall Street Journal's AllThingsD blog. Intel said it is not a party to the lawsuit, and therefore does not have any comment on it. "Intel does not comment on commercial agreements that we may or may not have with our customers," the chip giant said.

Oracle also claimed that HP had kept secret from the market, but revealed in a filing two days previously, that HP and Intel have a contractual commitment that Itanium will continue through the next two generations of microprocessors.

HP's strategy behind its "false statements" about Intel's support for Itanium was to take away business from Oracle Sun, and "reap lucrative revenues from the locked-in Itanium customer base using HP's HP-UX operating system on Itanium servers", as the company gets few service contracts on operating systems like Linux that run on x86 processors, Oracle said.

Oracle acquired Sun Microsystems last year.

Oracle: HP tricked us

HP filed a suit in June over Oracle's decision to stop developing software for the Itanium processor, the chip used in HP's high-end servers, claiming that Oracle's decision violates "legally binding commitments" that it made to HP and the companies' 140,000 joint customers.

Oracle said at the time that HP tricked it into signing an agreement last September to continue its support for Itanium, even though HP knew of an Intel plan to discontinue Itanium. HP already knew all about Intel's plans to discontinue Itanium, and HP was concerned about what would happen when Oracle found out about that plan, Oracle said in a statement in June.

As Oracle well knows, HP and Intel have a contractual commitment to continue to sell mission-critical Itanium processors to customers through the next two generations of microprocessors, thus ensuring the availability of Itanium through at least the end of the decade, HP said in a statement.

"The fact remains that Oracle's decision to cut off support for Itanium was an illicit business strategy it conjured to try to force Itanium customers into buying Sun servers - and destroy choice in the marketplace," HP said.



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