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Court Rejects Oracle's Attempt to Use Fraud Claim to Undo Contract With HP

Unsealed Court Filings Highlight Oracle's Anticustomer Business Strategy (January 30, 2012)

PALO ALTO, CA -- (Marketwire) -- 01/30/12 -- HP (NYSE: HPQ) issued the following statement in response to today's ruling in the ongoing litigation with Oracle relating to the Intel® Itanium® platform:

"HP is pleased that the Superior Court of the State of California, Santa Clara County, has rejected Oracle's attempt to use a fraud claim to undo its contract with HP. We look forward to seeing the facts made public that demonstrate how Oracle's March 2011 announcement to no longer develop software for Itanium servers was part of a calculated business strategy to drive hardware sales from Itanium to inferior Sun servers. This further demonstrates the fact that Oracle breached its contractual commitment to HP and ignored its repeated promises of support to our shared customers."

Here are the facts:

  • The Santa Clara Court has rejected Oracle's attempt to use a fraud claim to undo its contract with HP. The rejected fraud claim was another attempt by Oracle to get out of the contract it entered into with HP, wherein it committed to continue to offer its product suite on HP's server platforms.

  • Oracle's internal documents(1) make clear that its March 2011 announcement that it would no longer develop software for Itanium servers was implemented as part of a business strategy to leverage Oracle's dominance in database software to try to force Itanium customers to purchase Sun servers.

    • The tactics employed by Oracle in support of this purpose included pricing misconduct, withholding of benchmarking scores for HP servers running Oracle software, and abusing customers on support issues.

    • Oracle used false statement about Itanium's future viability, urging its sales teams to create fear, uncertainty and doubt in the minds of customers about the risks of not migrating off Itanium.

    • Oracle strong-armed customers into replacing their existing Itanium servers by limiting support, including bug fixes and patches for software defects. Customers were left without options to address bugs and other defects in their Oracle software.

  • Customers have voiced their dissatisfaction, recognizing the unfairness of Oracle's actions and the utter disregard Oracle was showing for the best interest of its own customers.(1)

    • A common theme among discovered emails is that customers viewed Oracle's business strategy to discontinue development on Itanium as self-serving and anticustomer.

    • For example, one public sector customer highlighted the significant financial impact that Oracle's decision to not develop on Itanium would have on cash-strapped government entities and other public-sector customers who could not afford to switch platforms at Oracle's whim.

  • With the unsealing of court filings, the public can see the undisputed facts of Intel's Itanium roadmap clearly showing a long and sustained future for Itanium. This further undercuts Oracle's rationale for its decision. Both Intel and HP have committed support for Itanium that extends through the end of this decade.

  • HP and Intel's contractual business relationship regarding Itanium development and supply is not a secret. The companies have a contract for the continued development of Itanium, and have had one since 2004. This does not provide Oracle with the basis for any claim of fraud or false advertising.

  • Oracle is in breach of its contractual commitments to HP, and it has failed to honor its promises to customers. Oracle should be addressing and rectifying this conduct rather than making up false claims against HP.

About HP
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world's largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP is available at http://www.hp.com.


(1) "Hewlett-Packard Company's November 22, 2011 Case Management Conference Statement," Case No.: 1-11-CV-203163, Superior Court of the State of California for the County of Santa Clara.

Intel and Itanium are trademarks of Intel Corporation in the U.S. and other countries.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements of the plans, strategies and objectives of management for future operations, including execution of restructuring and integration plans; any statements concerning expected development, performance or market share relating to products and services; any statements regarding anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include macroeconomic and geopolitical trends and events; the competitive pressures faced by HP's businesses; the development and transition of new products and services (and the enhancement of existing products and services) to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its customers, suppliers and partners; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; expectations and assumptions relating to the execution and timing of restructuring and integration plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2011 and HP's other filings with the Securities and Exchange Commission. HP assumes no obligation and does not intend to update these forward-looking statements.

© 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.

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