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HPE demands $3bn from Oracle over dropped Itanium database support

The long-running dispute finally enters the courts, but whose fault is it really that organisations are buying fewer high-end HPE servers? Moreover, why are two big players beating each other up over a fast-disappearing market?

A long-standing legal battle between tech giants Oracle and Hewlett Packard Enterprise (HPE) has finally entered the courts, with HPE demanding $3bn in damages from Oracle following a decision to drop support for the Oracle 12 database on HP Integrity Itanium-based servers running the HP-UX operating system (OS).

Oracle is likely to argue that the Itanium chip, used in HPE Integrity servers, represents legacy technology.

Karen Dunn, partner at Boies, Schiller and Flexner, LLP, representing Oracle, said: “Even though HP has all of the Oracle software, it is asking for $3bn because of a press release that told the truth. However, technology doesn’t die because of a press release, it dies because better technology leaves it behind.”

On 31 May 2016, HPE asked the court to admit out-of-court statements from its customers concerning their reasons for curtailing purchases of Itanium servers.

In a whitepaper published in 2014, HP described its HP-UX platform as having “the most preferred status for deployment of mission-critical Oracle database workloads around the world”.

HPE said it was committed to supporting the 140,000 customers who run Oracle software on HP servers, and to its long-term, mission-critical server roadmap.

Broken contractual obligations

HP is likely to try to show the court that Oracle actively damaged its Itanium server sales, and also broke the terms of its commercial agreement to support the database software on Itanium systems.

In a statement, HPE said: “After five years of litigation, including three years of unnecessary delay caused by Oracle’s meritless appeal, HP is pleased that the trial of this dispute is finally underway.

“We believe the evidence shows that Oracle breached a clear contractual obligation to HP and acted in bad faith, with the intention of driving hardware sales from HP’s Itanium to Oracle’s Sun servers,” the company added.

“Oracle needs to be held accountable for its actions, which caused billions of dollars in damages to HP and significant uncertainty for our customers,” it said.

Death of proprietary Unix

However, there’s little doubt that proprietary Unix server hardware is a shrinking market, with many organisations buying lower-cost commodity systems.

In March 2016, reporting on a global server market assessed for 2015, Gartner highlighted a decline in HPE server shipments.

At the time it said: “The primary decline in HPE’s server shipments can be attributed to a global weakness in Windows-based x86 servers, while the decline in revenue was driven mostly by a drop in Risc/Itanium Unix server sales for the period.”

The latest Gartner figures show that HPE shipped 118 million Itanium servers in the first quarter of 2016, compared with 158 million for the same period in 2015. Oracle shipped almost twice as many of its rival Sparc-powered servers for the same period (223 million).

More choice for companies

Previously, expensive Unix-based Risc-powered proprietary server hardware represented the performance benchmark for databases. With new approaches to databases – in-memory appliances such as SAP Hana and Oracle’s own Exadata machine – organisations looking to extract the best performance from the relational database have far more choice.

Server makers often submit a hardware and database setup to the Transaction Processing Council, to benchmark their servers against rival configurations. The TPC-H benchmark results for 10,000GB systems put HP Integrity as the highest performer.

This $1.8m system, submitted to TPC in 2016, uses Intel Xeon processors rather than Itanium chips, and runs SQL Server 2014 Enterprise Edition.

The equivalent Oracle system, running Oracle Database 11g R2 Enterprise Edition w/Partitioning on an Oracle Sparc T5-4 Server is similarly priced. This configuration from 2013 delivered half the performance of the HPE setup.

Relational is yesterday’s tech

And while Gartner’s figures show that Oracle has clearly gained ground in the Unix/Risc server market, a number of industry experts see NoSQL as a more agile approach to building a database system.

As the TPC benchmarks show, the bigger the server, the faster the relational database can perform queries.

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NoSQL company Couchbase describes this as “scaling vertically”. Architecturally, relational databases require servers with fast processors, fast input and output bandwidth and high-performance enterprise disc arrays.

NoSQL is a scale-out architecture, which uses clusters of relatively low-powered servers each with cheap local disc storage. “Using more storage in exchange for better application performance and the ability to easily distribute workloads across machines is now the best choice for many applications,” according to Couchbase.

Such systems can be pre-configured, according to a Forrester paper, Big data Hadoop-optimised systems, Q2 2016. In the report, Noel Yuhanna and Mike Gualtieri discuss how the major manufacturers are building pre-configured systems for Hadoop, the software infrastructure that supports NoSQL databases.

Unlike generic hardware infrastructure, Hadoop-optimised systems are pre-configured systems that integrate hardware and software components, delivering optimal performance and support to various big data workloads, the analysts note.

Such systems make it easier for organisations to build new database architectures, avoiding having to buy certified hardware and software configurations from the likes of Oracle and HPE. 

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