Skip to main content

Oracle to pay HP $3 billion over Itanium chip software

Oracle has been ordered to pay HP $3 billion after losing a lawsuit with the company regarding developing software for its Itanium servers.

During the lawsuit, HP claimed that Oracle had violated a contract by continuing to develop support software for its Itanium chip. The trial ran for one month in a California state court in San Jose ending with HP being granted the original amount it claimed at the beginning of the case.

In 2001, HP developed the Itanium chip in partnership with Intel. Oracle and HP then signed a contract that would see it writing software for the company's servers. However it decided to back out of the deal when the high-end servers failed to live up to their initially high expectations.

HP believed that Oracle's decision to pull out of the agreement affected its business and led its customers to distance themselves from the Itanium platform. In 2012, a Santa Clara Superior Court ordered the software developer to resume working with HP to support its Itanium line of chips. HP argued that it had already been affected by Oracle's actions and this led to the case between the two companies.

The general counsel of HP Enterprise (HPE), John Schultz defended the jury's verdict, saying: “HP is gratified by the jury's verdict, which affirms what HP has always known and the evidence overwhelmingly showed.” He also made the point that Oracle's decision to abandon making software for Itanium “was a clear breach of contract.”

Oracle responded to the outcome of the case, saying: “Oracle never believed it had a contract to continue to port our software to Itanium indefinitely and we do not believe so today... 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.”

The company's general counsel, Dorian Daley still believes that Itanium was on its way out, saying: “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.

Image Credit: Ken Wolter / Shutterstock

Anthony Spadafora
After living and working in South Korea for seven years, Anthony now resides in Houston, Texas where he writes about a variety of technology topics for ITProPortal.