Oracle told to pay Hewlett Packard $3 billion in Itanium chip dispute

California, United States Updated: Jul 01, 2016, 06:57 AM(IST)

Oracle general counsel Dorian Daley?said, 'two trials have now demonstrated that the Itanium chip was nearing end of life, HPE knew it, and was actively hiding that fact from its customers.' Photograph:( Getty )

A California jury on Thursday ordered business software giant Oracle to pay Hewlett Packard Enterprise (HPE) $3 billion for backing off a promise to support data servers powered by Itanium chips.

Oracle said it had acted properly in the situation and that it planned to appeal to a higher court.

"Two trials have now demonstrated clearly that the Itanium chip was nearing end of life, HP knew it, and was actively hiding that fact from its customers," Oracle general counsel Dorian Daley said in a released statement.

"Five years ago, Oracle made a software development announcement which accurately reflected the future of the Itanium microprocessor."

Hewlett Packard Enterprise argued that Oracle breached a contract when it decided in 2011 to stop offering products running on HP servers powered by Itanium chips made by Intel.

Oracle contended it never believed it had a contract to indefinitely make its software work on Itanium servers, noting that HP and Intel stopped developing the systems years ago.

An initial trial four years ago ended with a state court judge ruling that there had been a contract. The jury decision on Thursday in a California state court in Silicon Valley focused on damages in the case.

Daley said that Oracle has been making its software available on Itanium servers since that judge`s ruling.

HPE general counsel John Schultz was quoted in media reports as saying that it was a "clear breach of contract" for Oracle to stop future software development for Itanium servers and that serious damage was done to HP and its customers.

HP has since been split off its enterprise division. 

HPE maintained at trial that Oracle was out to get customers to switch to servers from Sun Microsystems, which Oracle bought in 2010 in a move that added hardware to its software offerings.

HPE did not initially respond to an AFP request for comment.

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