HP Calls On Partners To Chip In To Oracle-Itanium Slur

Hewlett-Packard executives reportedly are looking to their channel partners to pressure Oracle into reversing its decision to end software development for Intel’s Itanium chip platform.

During a March 29 keynote address at HP’s Americas Partner Conference 2011 in Las Vegas, Dave Donatelli, executive vice president and general manager of HP’s Enterprise Servers, Storage and Networking business, urged attendees to contact Oracle directly, suggesting that officials at the software giant could be convinced to change their mind, according to a report in CRN.

Oracle Hurting Its Customers

“We’re asking you to rally around and ask Oracle to reverse this decision,” Donatelli told the HP partners, many of whom also work with Oracle. “Call or write – they’ve changed their minds in the past on issues, and we’re asking you to rally to make this happen.”

Oracle announced March 22 that it was ending software development for Intel’s Itanium platform, saying that after speaking with several Intel managers, it became apparent that the chip giant was phasing out Itanium and would concentrate more on its lucrative x86 processors.

The announcement was quickly disputed by both Intel and HP, the primary consumer of Itanium chips and a rival of Oracle’s in the high-end RISC hardware market. Intel executives, led by president and CEO Paul Otellini, said that Intel already has the next two generations of Itanium chips – code-named “Poulson” and “Kittson” – in development, and a product roadmap that stretches out at least 10 years. For their part, HP officials said it will continue to invest in the Itanium platform for its Integrity and NonStop processors, and blasted Oracle’s move as an anti-competitive ploy by the company to prop up the struggling SPARC hardware business that it inherited when Oracle bought Sun Microsystems last year for $7.4 billion (£4.59 billion).

The ones being hurt the most are customers, Donatelli said in a statement the day after Oracle’s announcement. He reiterated that claim during his pitch to HP partners at the Las Vegas event.

“In a high market share area, this is a shameless attempt to force customers to spend a lot of money to move to a platform over time that gives customers no benefits,” Donatelli said, according to CRN. “Oracle made this decision to slow Sun SPARC market losses.”

An Oracle spokesperson fired back, saying it was Oracle that was looking out for customers by letting them know well in advance of the company’s decision and promising to continue support for Oracle software running on Itanium systems.

“HP is well aware that Intel’s future direction is focused on x86 and that plans to replace Itanium with x86 are already in place,” the Oracle spokesperson said in the March 23 statement. “HP is knowingly withholding this information from our joint Itanium customers. While new versions of Oracle software will not run on Itanium, we will support existing Oracle/Itanium customers on existing Oracle products.”

Implications For HP

There are several implications for HP. Analysts estimates say that at least half the Itanium-based Superdomes HP sells run Oracle database software. In addition, HP last year jumped into the number two spot behind IBM in the Unix server market, leapfrogging Oracle with a 26 percent share. The move could bolster Oracle’s flagging hardware business. While, overall, the company saw a 37 percent jump in revenue in the last quarter, its Sun-based hardware business missed analyst expectations.

Despite Oracle’s arguments to the contrary, analysts have said that the company’s Itanium decision is an obvious attempt to strengthen its SPARC hardware business while hurting HP’s Unix server unit.

“Oracle made a measured decision to discontinue development for Itanium processors to reduce a competitive threat to its own SPARC-based hardware in the enterprise server and high-performance computing market,” Stuart Williams, an analyst with Technology Business Research, said in a note March 24. “HP–producer of the Integrity line of Itanium-based servers–is the immediate target, while Intel–producer of the chip that was supposed to replace the x86 architecture–is a secondary target. Oracle is trying to force HP and Intel to remain producers of lower-margin X86-based systems by reducing competition for its SPARC line of hardware; however, IBM’s Power-based servers remain the strongest alternative to SPARC.”