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HP, Oracle rivalry escalates with demand letter

Wed, 06/08/2011 - 3:05pm
The Associated Press

The rift between tech heavyweights Hewlett-Packard Co. and Oracle Corp. escalated Wednesday after HP sent Oracle a "formal legal demand" asking that the company reverse its decision to stop developing software that works with Intel Corp.'s Itanium chip.

Oracle announced in March that it will stop developing software for Itanium, which is used in servers made by HP, because of declining interest in the microprocessor. In a statement, HP said in a statement that Oracle's decision "violates legally binding commitments Oracle has made to HP and the more than 140,000 shared HP-Oracle customers."

"Further, we believe that this is an unlawful attempt to force customers from HP Itanium platforms to Oracle's own platforms," said HP, which has been one of Itanium's biggest supporters. The company declined to release the letter and Oracle declined to comment.

The rivalry between Oracle and HP has escalated since Oracle bought Sun Microsystems last year. Sun, like HP, makes servers, and until the $7.3 billion acquisition, Oracle had focused on business software.

In March, HP accused Oracle of spreading "disinformation" about interest in Itanium and called Oracle's decision "clearly an attempt to force customers into purchasing Sun servers in a desperate move to slow their declining market share."

The companies have also sparred over the ouster of former HP CEO Mark Hurd. Hurd, a friend of Oracle CEO Larry Ellison, was hired by Oracle after he left HP.

Shares of Palo Alto, Calif.-based HP fell 13 cents to $35.23 in after-hours trading. The stock had closed down 21 cents at $35.36 .

Shares of Oracle, based in Redwood City, Calif., slid 1 cent to $31.24. The stock had closed down 59 cents at $31.25.

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