Oracle To Pay HPE $3 Billion In Damages For Dropping Itanium Support

In what can be considered another legal setback for Oracle, a jury has ordered the firm to pay Hewlett-Packard Enterprise (HPE) $3 billion in damages for its decision to stop developing database software for HP's Itanium-based servers in 2011. Oracle plans to appeal the verdict, but for now it's on the hook for a significant sum over a contract dispute.

What this all boils down to is whether or not Oracle had a legal obligation to continue supporting Itanium after Intel indicated that its end of life was near as it began focusing more on its x86 microprocessors. Oracle feels strongly that it had no such commitment, while HP successfully argued the opposite, adding that its servers would be obsolete without Oracle's support.

Intel Itanium
Intel Itanium 9300 "Tukwila" (Source: Flickr - Konstantin Zamkov)

"HP is gratified by the jury's verdict, which affirms what HP has always known and the evidence overwhelmingly showed," John Schultz, executive vice president and general counsel of HPE, told Reuters in an email. As far as Schultz is concerned, what Oracle did "was a clear breach of contract."

The courts have so far agreed, with Santa Clara Superior Court Judge James Kleinberg ruling in Oracle's favor in 2012 and the jury now coming up with a damages award.

"Five years ago, Oracle made a software development announcement which accurately reflected the future of the Itanium microprocessor. Two trials have now demonstrated clearly that the Itanium chip was nearing end of life, HP knew it, and was actively hiding that fact from its customers. Oracle never believed it had a contract to continue to port our software to Itanium indefinitely and we do not believe so today; nevertheless, Oracle has been providing all its latest software for the Itanium systems since the original ruling while HP and Intel stopped developing systems years ago. Further, it is very clear that any contractual obligations were reciprocal and HP breached its own obligations. Now that both trials have concluded, we intend to appeal both today's ruling and the prior ruling from Judge Kleinberg," Dorian Daley, executive vice president and general counsel for Oracle said in a statement.

Oracle and HPE have a contentious history. In addition to a legal dispute over the aforementioned contract, HPE sued Oracle in 2010 less than 24 hours after Oracle named ousted HP CEO Mark Hurd as co-president, claming a breach of contract.