August 30, 2011 6:56 pm

Oracle hits back at HP in legal dispute

Oracle has filed a sharp legal riposte against Hewlett-Packard in a dispute over a longstanding technology partnership, marking the latest deterioration in relations between the US technology companies.

A series of flashpoints and repeated public mud-slinging between the giant tech suppliers over the past 18 months has turned what was once a close business alliance into one of the most fractious relationships in Silicon Valley.

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The disintegration of the former alliance between the two has also threatened to leave big companies and governments in the lurch by raising doubts about the future of an important technology platform, according to HP and to representatives of users who run systems based on the technology.

The latest outbreak of enmity concerns the future of IT systems based on Itanium chips, processors made by Intel for computers that carry out the most demanding tasks for big corporate and government customers. HP first introduced systems based on Itanium a decade ago and remains the biggest supporter of the technology.

In March, Oracle said it would stop developing future versions of its software to run on Itanium, a move likely to weaken the attractiveness of the technology to customers. HP shot back, accusing Oracle of backing out of a partnership between the two companies and in June filed a lawsuit alleging breach of contract.

On Tuesday, Oracle struck out at HP with a series of claims including fraud and defamation and accusing it of “incessant Oracle-bashing”.

In its counter-suit, Oracle described the Itanium partnership as an informal one and said it had “always retained complete discretion to support whichever HP technologies it chose”.

Relations between the two companies began to deteriorate early in 2010 after Oracle bought Sun Microsystems, making it a direct competitor to HP in server hardware.

Things turned worse a year ago after Oracle hired Mark Hurd, who had been ousted as head of HP over sexual harassment allegations, as a co-president, prompting a lawsuit from his former employer.

In settling the dispute over Mr Hurd, Oracle and HP also agreed to extend their previous business partnerships – an agreement that HP has now called on to back its argument that Oracle should continue to support Itanium.

Disputing the strength of that agreement, Oracle also accused HP of fraud for promising a continuing partnership when it was about to bring in Ray Lane and Leo Apotheker as, respectively, its new chairman and chief executive – executives “who HP knew Oracle distrusted so completely – justifiably – that ‘partnership’ would be impossible.”

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