On Thursday, a Silicon Valley jury ordered Oracle to pay Hewlett Packard Enterprise $3 billion in damages in a trial revolving around now-defunct Itanium technology. The Redwood City-based company pledged to appeal the verdict.
HP argued in the trial that Oracle’s breaching of a contract led to the decline of a profitable line of business computers. In 2011, Oracle single-handedly decided to cease the development of a database and other software designed to power Itanium chip-based computer systems. Itanium is part of Intel’s line of microprocessors, but a less popular one.
HP which is focused on developing hardware such as servers and laptops said in the trial that Oracle revealed its intentions to hurt its business when it hired former HP chief executive Mark Hurd in 2011. In the meantime, Oracle entered the server business by purchasing Sun Microsystems Inc.
John Schultz of HP Enterprise argued that Oracle’s refusal to provide further support to HP’s Itanium-based server systems in the spring of 2011 led to serious damages to both the company and its customers.
Oracle chairman Larry Ellison denied allegations. He replied that his company’s actions were a response to Intel’s decision to stop providing support to Itanium. Intel said in the trial that this wasn’t the case.
Industry analysts believe that the $3 billion verdict should be “eye-opening.” On the other hand, the trial is not expected to harm Oracle’s reputation or shares as the company is currently valued at about $170 billion. Furthermore, HP Enterprise could see a lot less money than requested in court after the appeals.
Reportedly, Oracle got back in the Itanium support business after another court ruled it to do so. Oracle executive VP and general counsel Dorian Daley recently told reporters that the company’s 2011 decision echoed the future of Itanium-based platforms.
Daley noted that two lawsuit have proven that the microprocessor was nearing the end of its life cycle, while HP was perfectly aware of the situation but kept it hidden from customers and shareholders.
The latest trial, which began in May, represents the second huge courtroom loss in Oracle’s history. In late May, another California jury ruled that Google hasn’t infringed Oracle’s copyright on Java code as it had used it under the “fair use” policy. Oracle is preparing to appeal that verdict too.
Image Source: Wikimedia