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9/8/2010
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Ellison Threatens To End Oracle-HP Alliance

Hurd lawsuit could kill longstanding technology partnership between the two companies.

Oracle's nasty legal battle with HP over Mark Hurd's future could impact a broad range of joint product, services, and marketing operations between the two companies—a development that may cause big headaches for customers while creating opportunities for rivals IBM and Microsoft.

Oracle announced earlier this week that it hired Hurd as president, following Hurd's departure from HP's top job in August amid allegations of sexual impropriety. At Oracle, Hurd would be in line for an annual base salary of $950,000 and a bonus of $10 million in the current fiscal year, documents show.

But on Tuesday, HP sued Oracle in California state court, claiming Hurd is still bound by confidentiality agreements that prohibit him from working at Oracle.

Ellison, within hours, called HP's suit "vindictive," and said the legal action makes it impossible for Oracle to continue working with HP under a broad technology alliance that's been in effect for the past several years.

"Oracle has long viewed HP as an important partner," said Ellison, in a statement. "By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees," Ellison said.

"The HP board is making it virtually impossible for Oracle and HP to cooperate and work together in the IT marketplace," said Ellison.

HP and Oracle have been working together on a number of fronts. Among other things, the companies maintain a joint technology center where Oracle database software is optimized for performance on HP-UX servers, and HP says it’s the leading Oracle applications infrastructure partner.

As recently as July, the two companies affirmed their alliance with the announcement that HP would certify Oracle Solaris, Oracle Enterprise Linux, and Oracle VM on its x86 systems.

"The combination of Oracle infrastructure software and HP ProLiant servers delivers outstanding performance, scalability, and virtualization capabilities on x86 servers," said HP vice president Paul Miller, in a statement issued at the time of the announcement. "Our joint customers can have complete confidence to grow their businesses while also controlling their costs," said Miller.

Those joint customers, including the state of Kentucky, for which Oracle and HP deployed a new tax system last year, may now have reason to worry, in light of Ellison's threat to end the partnership.

Meanwhile, industry rivals like Microsoft and IBM will no doubt move quickly to capitalize on any uncertainty created by the growing rift between two of the world's most important IT companies.

For Further Reading:

Global CIO: In Hurd's Wake, An Ugly Ending For Oracle's Charles Phillips

HP Sues Mark Hurd Over Oracle Competition

Hurd In, Phillips Out As Oracle President

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