Bloomberg News

Hewlett-Packard Offers Alternative to Oracle-Shunned Chips

November 25, 2011

(Updates shares in final paragraph.)

Nov. 23 (Bloomberg) -- Hewlett-Packard Co. is giving customers an alternative to machines that use Intel Corp.’s Itanium chips, a family of products that’s losing popularity after Oracle Corp. stopped developing related software.

Customers that use Hewlett-Packard software with Itanium- based servers will get to run their programs on Intel’s more popular Xeon chips in coming years, Palo Alto, California-based Hewlett-Packard said in a statement. Customers will also be able to move those applications to Microsoft Corp.’s Windows and Red Hat Inc.’s Linux operating systems.

Businesses are seeking alternatives after Oracle, the largest maker of database software, said in March it would stop developing software for Itanium chips, which are used in some Hewlett-Packard servers. Hewlett-Packard sued Oracle over the decision on June 15, alleging breach of contract, escalating tensions that flared after Oracle hired former Hewlett-Packard Chief Executive Officer Mark Hurd as a co-president.

Oracle’s move helped slice revenue at Hewlett-Packard’s “business critical systems,” which includes high-end servers, by 23 percent to $535 million in the quarter that ended Oct. 31, the company reported yesterday.

Users of Hewlett-Packard’s Integrity and certain other machines -- the ones that use Itanium -- will be able to run Itanium and Xeon blade servers side by side in the same computer chassis in about two years, said Martin Fink, a senior vice president for business critical systems at Hewlett-Packard.

No ‘Forced Migrations’

The systems, used to power ATM and telephone networks, include features that let them recover from system failures and run for long periods without downtime.

Hewlett-Packard is also working with Microsoft and an industry group responsible for developing the open-source Linux software to make those operating systems work better with Integrity, Fink said. Over time, customers could choose to move applications and databases, including ones made by Oracle, to the Xeon blades, he said. Hewlett-Packard will continue to support and develop new features for Itanium-based computers.

“This is not about forced migrations or forced transitions,” Fink said. “The beauty of this is one infrastructure that runs all of your hardware and system needs.”

Deborah Hellinger, a spokeswoman for Redwood City, California-based Oracle, declined to comment.

Hewlett-Packard fell 1.4 percent to $26.29 at 9:30 a.m. in New York. The stock had tumbled 37 percent this year before today.

--Editors: Tom Giles, Jillian Ward

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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