Oracle said it will support HP's Itanium hardware going forward and put its software on a similar release schedule used for IBM's Power system, but what's unclear is how much damage has already been done.
HP recently won a court battle with Oracle over Itanium support. Oracle said in March 2011 that Intel would stop supporting Itanium. HP and Intel both denied it and Oracle wound up in court.
On the surface, HP looks like it landed a nice victory against Oracle, which released a statement Wednesday indicating it would support Itanium going forward. Oracle said:
Previously, Oracle announced that it would stop developing new versions of its software on Itanium microprocessors. For example, that meant version 12c of the Oracle database due out in early 2013 would not be available on Itanium. However, a judge recently ruled that Oracle has a contract to continue porting its software to Itanium computers for as long as HP sells Itanium computers. Therefore, Oracle will continue building the latest versions of its database and other software covered by the judge's ruling to HP Itanium computers. Oracle software on HP's Itanium computers will be released on approximately the same schedule as Oracle software on IBM's Power systems.
For HP's current Itanium customers, the Oracle news is welcome.
However, HP will need new customers to use the Itanium systems if it's going to grow the business---and collect the maintenance revenue that goes with it. Oracle may have lost its court battle with HP---yet another lawsuit setback---but the company has spread a lot of fear, uncertainty and doubt (FUD) on its rival. Meanwhile, IBM has pounced on HP's Itanium business courtesy of Oracle's moves. If you search on Itanium on Google you get an IBM ad first:
Here's a history of the damage that Oracle inflicted on HP's Itanium systems.
On Aug. 22, HP CFO Cathie Lesjak said on the company's third quarter earnings call:
Overall, Business Critical Systems revenue declined 16% year over year. Within BCS, non-stop server revenue grew double digits, but BCS's performance continued to be impacted by Itanium revenue declines, even with the first ruling in the Oracle Itanium case going in our favor.
On May 23, HP CEO Meg Whitman said:
Business critical systems, not surprisingly, still facing challenges from the Oracle Itanium issue, but more important is how we're moving forward. Our Odyssey solution is an innovative mission-critical x86 platform that will offer customers a transition to open standards-based architectures.
On Feb. 22, Lesjak said:
Overall, Business Critical Systems revenue declined 27% year-over-year. Within BCS, our Mission Critical x86 and Nonstop products grew double digits, but not by enough to counteract the impact of continuing Itanium challenges. With respect to our Itanium portfolio, we are working diligently to enforce the commitments that Oracle has made to our customers and to HP.
On Nov. 21, 2011, Lesjak noted:
Revenue in business critical systems declined 23% year over year primarily due to a decline in our Itanium-based servers. Our ability to close deals has been impacted by Oracle's Itanium decision.
On Aug. 18, 2011, former HP CEO Leo Apotheker said:
We must address some of the technical challenges facing our business. In Business Critical Systems, we firmly believe that HP Itanium-based server platform is by far the best in the industry and we have fully committed to its future. In fact, it is the strength of this platform that is likely behind Oracle's approach to drive customers away from HP technology. We are doing everything we can, including pursuing legal actions, to protect our customers and our business against Oracle's anti-customer behavior.
Add it up and Oracle has waged a nearly 18-month FUD war on HP's business critical systems. IT buyers may quietly support HP and shake their heads at Oracle, but the reality is that the least risk is to stay out of the scrum.
On the bright side, a survey of ZDNet and TechRepublic users indicates that HP is often the primary server vendor in their companies. The worrisome point for HP is that IBM and Dell show up as the company that would be evaluated if IT buyers were to switch primary vendors. HP often gets consideration too.
Here's a snippet of our ZDNet and TechRepublic survey conducted in August.
Perhaps HP regains its Itanium mojo, but it's going to take time and rest assured rivals will try and draft off of Oracle's Itanium messaging. As Whitman noted a few months ago, HP is eyeing its hyperscale servers for growth as well as efforts such as Odyssey and Moonshot, which focuses on microservers. HP's victory over Oracle has stopped the Itanium bleeding, but it'll take a lot of discounting, marketing and sales focus to allay any future concerns.