Latest volleys in HP v. Oracle …

Would Oracle CEO Larry Ellison seriously contemplate a hostile takeover of Hewlett-Packard?

Oracle and HP escalated their feud in the courts of law and public opinion this week, after a judge made several rulings in a dispute between the two tech giants over Oracle’s decision to stop making new software for HP’s high-end servers that use Intel’s Itanium chips.

HP fired first on Monday, trumpeting the fact that a Santa Clara County judge had thrown out Oracle’s claim that HP somehow committed “fraud” when it was negotiating a settlement with former HP CEO Mark Hurd, after HP sued Hurd for going to work for Oracle.

Oracle had argued that HP obtained the settlement agreement under false pretenses because HP had not revealed that it planned to hire two of Oracle’s arch-enemies, former SAP chief Leo Apotheker and former Oracle president Ray Lane, as HP’s CEO and board chairman, respectively.

Judge James Kleinberg agreed with HP that this did not constitute fraud. He also denied Oracle’s motion to keep sealed an HP document that contains some examples of Oracle’s hardball efforts to go after HP’s customers by portraying Itanium as a product line that’s nearing its end of life.

Oracle fired back by noting that the judge also agreed with Oracle’s motion to unseal its cross-complaint against HP, which offers up some details of what Oracle contends was an HP effort to hide Intel’s intentions regarding Itanium’s future.

As an example, Oracle maintains that HP negotiated a secret agreement in 2008 to pay Intel a whopping $440 million to keep making Itanium for another three generations of chips, and an additional $250 million under a later agreement, in order to make customers think that HP’s servers had a long-term viable future. HP has not confirmed the numbers but says in court papers that it’s no secret that it agreed to contribute to the chip’s development costs.

And then there’s another point that neither company mentioned in its press releases. In his order, Judge Kleinberg also denied HP’s motion to keep secret some details of the confidential agreement that HP negotiated with Hurd after he went to work for Oracle.

That agreement contained an 18-month “standstill” provision, during which Oracle agreed not to launch a hostile takeover bid for HP, according to the judge. Kleinberg said HP apparently feared that Hurd’s intimate knowledge of HP’s business would give Oracle an unfair advantage should it attempt such a bid.

HP may have sought the standstill agreement out of an abundance of caution; a spokesman declined comment. Oracle spokeswoman Deborah Hellinger said: “We viewed HP’s insistence on a standstill as hilarious, so we gave it to them.”

The case continues in Santa Clara County Superior Court.

Brandon Bailey writes about enterprise IT and other tech subjects. Contact him at bbailey@mercurynews.com or 408-920-5022.

 

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  • george vendelin

    Michael Hurd should serve jail time for a complete lack of ethics.

 
 
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