HP Server Sales Hurt By Oracle's End of Itanium Support

By CIOinsight  |  Posted 08-22-2011 Print Email
HP saw revenues in its high-end server business fall 9 percent in the recent quarter, and officials blame Oracle's decision to end support for Intel's Itanium platform.

Amid all of Hewlett-Packard's talk Aug. 18 of spinning off the PC business and getting rid of the webOS-based smartphones and tablets, company executives also mentioned another issue they're trying to address: the negative impact Oracle's decision to no longer support Intel's Itanium platform is having on HP's high-end server sales.

According to HP officials, its Business Critical Systems unit saw a 9 percent year-over-year revenue drop during the fiscal third quarter, to $459 million. It represented a 16 percent drop from the company's second fiscal quarter. The BSC unit includes HP's high-end Integrity and NonStop servers, which are powered by Intel's Itanium processors.

During a conference call with analysts and reporters to discuss the quarterly financial results, both CEO Leo Apotheker and Cathie Lesjak, executive vice president and CFO, put much the blame on the poor BSC unit numbers on Oracle, which in March announced it would no longer develop software for the Itanium platform.

Oracle officials said they made the decision after talking with Intel engineers and determining that the giant chip maker planned to start shutting it down in the near future to focus its high-end server chip efforts on Xeon. The statement drew a sharp rebuke from Intel officials, who said they have roadmaps for Itanium going out through the rest of the decade.

HP officials accused Oracle making the move to force customers to choose between HP and Oracle s SPARC hardware, which it inherited when it bought Sun Microsystems. HP and Oracle share about 140,000 customers, with most running Oracle software on HP systems. HP sued Oracle in June, accusing the software vendor of violating an agreement between the companies to support products used by joint customers.

Apotheker and Lesjak again hammered away at Oracle for its Itanium decision, accusing Oracle of risking the businesses of customers in a blatant push to hurt HP's server business and prop up its own.

"We firmly believe that HP's Itanium-based server platform is by far the best in the industry, and we have fully committed to its future," Apotheker said. "In fact, it is the strength of this platform that is likely behind Oracle's approach to drive customers away from HP technology."

Lesjak said HP will continue to press the lawsuit against Oracle.


Submit a Comment

Loading Comments...