SiliconBeat

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.

Chip industry watchers have been eagerly awaiting news about the progress of Intel’s graphics-oriented chip, dubbed Larrabee, which has been under development for what seems like ages.

Intel executives hope Larrabee will help them compete with the highly popular graphic chips offered by Nvidia and Advanced Micro Devices.

But when Intel gave a little demonstration of its chip last week during the Santa Clara company’s annual San Francisco event for people working on Intel-related products, the reaction among some analysts was less than awestruck.

“The 3D graphics were underwhelming” compared with those offered by Nvidia’s and AMD’s chips, wrote Global Crown Research in a note to its clients.

In its own note, Raymond James called Intel’s unveiling of Larrabee “surprisingly pedestrian” and noted that “the sad demo tells us the project is in trouble.”

Ouch!

Earlier this year, Intel announced that it would let employees exchange options that were underwater. Since then, the announcement has apparently caused quite a split among employees who love it or hate it. So in a filing today, Richard Taylor, of Intel’s HR department, sought to address the hubbub:

“Before addressing specific questions, I’d like to share some general thoughts. It appears that some employees have already decided the program has no value to them; others have decided the opposite and are vocal in their support. I have a simple request of all of you - don’t be lemmings (i.e., don’t blindly follow others)! By all means read all opinions voiced, but don’t be swayed by them. Opinions offered are just that; opinions. They reflect personal views based on an individual’s experiences.

Let’s rewind a bit and see what’s going on here.

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After gobbling up several software companies recently, Intel announced in June that it was plunking down $884 million for the Alameda software firm Wind River Systems.

But that hardly satisfied the Santa Clara chip giant’s software appetite.

So over the past few weeks, Intel has picked up two more software businesses - Rapidmind of Waterloo, Ontario and Cilk of Lexington, MA, according to information posted on an Intel blog.

The two latest acquisitions bring Intel skill in the arcane art of parallel programming, which involves writing software for so-called multiple-core chips featuring more than one central processing unit.

There’s more evidence the chip industry is slowly climbing out of the recessionary muck where it’s been mired for months.

The latest good news comes from research firm IDC, which reported this week that worldwide shipments of personal computer microprocessor rose 10.1 percent from the first quarter of the year to the second.

Microprocessor shipments for the second quarter were up 12.5 percent for Intel, while those for Advanced Micro Devices rose 1.8 percent.

But don’t get too giddy just yet. IDC says the sales increases is mostly due to computer makers restocking their inventory, rather than consumers ramping up demand for PCs. Until more people start buying computers, experts warn, the chip industry will likely remain bogged down for a while.  .

Intel offered up some good news yesterday with its second-quarter earnings yesterday, reporting signs of an uptick in consumer demand for PCs. But executives tempered their optimism by saying they’re not counting on so-called “enterprise” or business customers to increase their buying significantly in 2009.

CEO Paul Otellini said he sees an eventual upside from the fact that many companies have not replaced their employees’ desktop or laptop PCs for three or four years.

 “At some point, those need to be refreshed,” he said, adding that businesses may decide to buy new computers after Microsoft releases its new Windows 7 operating system. But he said he doesn’t expect to see those sales pick up before 2010.

On another somewhat upbeat note, Otellini touted the development of new ultra-low voltage processors for the consumer market, which he said are designed to help PC makers create a new segment of ultra-thin but full-function notebooks. These are aimed at consumers who want portability but also want to do more than access Web-based services on a netbook.

Intel just gained ground on its longtime-microprocessor rival, Advanced Micro Devices, in the world of high-performance computers.

The latest edition of the TOP500 list, a widely watched compilation of the 500 most powerful computer systems, found Intel’s chips were in 399, or nearly 80 percent, of the supercomputers.

That’s an increase from six months ago when the Santa Clara company’s chips were in 379 or about 76 percent of the top computers.

AMD’s chips were in 43 supercomputers (about 8.6 percent), which was down from 59 six months ago.

Get ready for some gut-busting laughs, thanks to those crazy guys and gals over at Intel.

The Santa Clara computer-chip giant has signed on as a sponsor of “The Tonight Show with comedian Conan O’Brien.” According to the company, “this partnership leverages O’Brien’s unique ability to humorously convey to his viewers Intel’s unique personality, cutting-edge technology and futuristic innovations.”

Wait. Stop yukking. We haven’t gotten to the punch line yet.

While the chipmaker is passionate about technology, it notes in a press release, “there is also a funny, quirky side to Intel people - and we want to share that.”

Grab some chips and dip, set up the TV trays and turn on the tube to the silly side of Silicon Valley. Imagine what fun Conan could have with Intel’s 8-MB smart caches, SSE4 instruction sets and processor prefetching algorithms. Sounds like a real knee-slappin good time.

The New York Times is reporting on its tech blog that Sun Microsystems has cancelled a long-running, but star-crossed, effort to develop a high-performance computer chip that the company once considered a key element of its turnaround strategy.

The report comes just weeks before Sun’s stockholders are scheduled to vote on a deal for the company to be acquired by Oracle, the business software giant, for $7.4 billion. A Sun spokeswoman declined comment on the report, which the Times attributed to unnamed sources.

Sun has been working on the chip, code-named “Rock,” for more than five years. The company is better known for making servers and software, although it’s had some success in recent years with other high-performance chips of its own design.

But much of the computer server industry, meanwhile, has shifted to machines built with lower-cost commodity chips from companies like Intel and AMD. Sun was hoping the Rock would help it move ahead at the high-performance end of the market, where it competes with bigger rivals such as IBM and Hewlett-Packard.

The Rock had 16 processor cores and was designed for high-end servers that would be used to crunch huge amounts of data quickly. But it reportedly suffered from development glitches that forced Sun to postpone its debut from 2008 to later this year.

Silicon Valley chip competitors, Intel and Advanced Micro Devices, sure don’t seem to see eye to eye on much.

The companies have been squabbling for years over AMD’s claim that Intel has monopolized the microprocessor market. And they don’t share the same view about the economic state of the semiconductor industry.

Last month, Intel CEO Paul Otellini declared that the personal-computer sales slump had “bottomed out.”

But in an interview this week with Dow Jones Newswires, AMD CEO Dirk Meyer said not so fast.

“It’s still too early to definitely say we’ve hit bottom,” Meyer advised. “You can only point to the bottom once you’ve passed it, and I can’t say we’re past it.”

Will these two chip-makers every get on the same page? .