Oracle told to pay HPE $3 billion for ditching Itanium servers

published 1 July 2016

Oracle must pay Hewlett Packard Enterprise (HPE) $3 billion in damages after deciding to stop writing software for the firm's Itanium servers back in 2011.

While Oracle plans to appeal the ruling, HPE had argued the announcement led to customers stepping away from the technology, which was based on Itanium chips jointly developed by HP - HPE's predecessor - and Intel.

This damaged the business, HPE contended, adding that a contract between it and Oracle prevented Oracle from stopping writing software for the servers.

A court ruling in 2012 recognised there was a contract, and instructed Oracle to resume writing code.

But Oracle's general counsel, Dorian Daley, said in a statement emailed to IT Pro: "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."

Instead, Daley said: "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.

"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."

HPE's general counsel, John Schultz, told AFP the $3 billion damages issued reflected his organisation's view that "Oracle's decision to stop future software development on the Itanium server platform in March of 2011 was a clear breach of contract that caused serious damage to HP and our customers".

It is the second multi-billion dollar trial Oracle has lost recently, after failing to persuade a courtin May that Google should pay it $9 billion in damages for using Java in Android's code.

Google successfully argued that its use of Java constituted fair use, though Oracle plans to appeal this lawsuit.