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Oracle Attacks HP’s Integrity Server Base by Dropping Support for Itanium

TBR Reaction to Oracle’s Itanium Announcement
Jessica Breen, SBQ Analyst
March 24, 2011
Oracle Axed Support for Itanium Processors to Disrupt HP’s Integrity Server and Reinforce the Opportunity for SPARC Servers
On March 23, 2011 Oracle announced its intent to discontinue support for Intel’s Itanium processor following purported discussions with Intel suggesting Intel was terminating the processor. In a statement, Intel disputes Oracle’s claims and says Intel will continue to develop and deliver Itanium processors with a roadmap that extends for more than 10 years. Oracle justified its decision citing announcements of competitors Red Hat and Microsoft to also discontinue support for Itanium processors, and cited HP CEO, Leo Apotheker, neglected to mention support for Itanium in his discussion of HP’s strategic roadmap. 
TBR believes Oracle made a measured decision to drop support for Itanium processors because this processor directly competes with SPARC hardware. IBM remains the strongest alternative to SPARC with its Power-based servers.  Oracle de-emphasized commodity hardware, but continues to provide strong software support for the x86. Oracle will try to shift customers to SPARC servers as it is the core product in Oracle’s high-margin hardware strategy. 
HP-UX customers will feel the hit as HP-UX runs specifically on Itanium processors. HP announced that it would continue to support Itanium; however, the move places customers in a precarious position with Oracle software as they may not be able to upgrade. The Itanium disruption will allow Oracle to gain hardware customers among existing software subscribers; however, the aggressive move will also enable competitors IBM to provide alternative options to customers who are unhappy with Oracle’s tactics. Ultimately, TBR believes the disruptive Itanium tactic will only drive a partial transition from Itanium to SPARC as competitors capitalize on an opportunity to poach unhappy customers.
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Sources include:
Intel -
HP Press Release
Oracle -

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.