Will Oracle Leave H-P in the Dust?

Hewlett-Packard (NYSE:HPQ) is accusing Oracle (NASDAQ:ORCL) of violating a clear contract when it decided to no longer make new versions of its database software compatible with the former’s Itanium-based servers, a lawyer for HP said Monday in court as the two firms gave their opening statements.

Oracle countered that it had never agreed to give up its business flexibility in the “brief, breezy” contract language being cited by HP.

Last year, when Oracle decided to stop developing software for Itanium, it said Intel (NASDAQ:INTC) made it clear the chip was nearing the end of its life and was shifting its focus to its x86 microprocessor. But HP said it had an agreement with Oracle that support for Itanium would continue, and that the commitment was affirmed when it settled an earlier lawsuit over Oracle’s hiring of ousted HP CEO Mark Hurd. That settlement clearly bound Oracle to continue offering its “best products” to HP, said lawyer Jeffrey Thomas.

“It is impossible to offer best products going forward without porting new versions of those products,” Thomas said.

But Oracle attorney Dan Wall said the Hurd settlement was meant only to settle employment litigation HP had initiated against Oracle, and was not backed by the kind of negotiation needs to take place over a strategic business partnership. He added that Itanium is a declining product, and said HP is trying to “force Oracle to support a technology…[it] does not believe in.”

Santa Clara Superior Court Judge James Kleinberg will decide whether there is a contract between HP and Oracle, and its terms. The case will move forward from there if Kleinberg decides in HP’s favor, with a jury deciding whether Oracle was in fact in violation of said contract. The jury will also decide damages, if any.