Can This Tech Giant Do Anything Right?
Whatever Hewlett-Packard (NYS: HPQ) does these days, controversy isn't far away. The world's largest computer systems builder poked a big stick at two hornets' nests in the past few days.
The company continues to accuse Oracle (NAS: ORCL) of anticompetitive behavior as it encourages European antitrust authorities to examine the database giant's business practices. HP claims that Oracle is using its software-side muscle to force HP out of the server hardware business. The complaints center on Oracle's decision to stop supportingIntel (NAS: INTC) Itanium chips in upcoming releases of its flagship database products. HP co-developed the chip line and remains pretty much the only customer for Itanium chips, so it's easy to accuse Oracle of boosting its Sun systems sales by shutting out an important competitor.
In a recent court filing, Oracle took some pop-culture swings at HP's Itanium strategy: "Intel's independent business judgment would have killed off Itanium years ago. But HP has secretly contracted with Intel to keep churning out Itaniums so that HP can maintain the appearance that a dead microprocessor is still alive. The whole thing is a remake of Weekend at Bernie's."
You don't often see that kind of language in bone-dry legal filings. Some of Oracle's lawyers are clearly enjoying this case. I am not a lawyer, but I can't imagine legal pros being this glib in anything but a slam-dunk, open-and-shut case. Don't expect HP's complaints to gain much traction. In fact, HP seems to be giving up, offering to move Itanium customers to Xeon-powered servers running Microsoft (NAS: MSFT) Windows or Red Hat (NYS: RHT) Linux rather than HP's own HP-UX Unix software.
In related HP news, networking titan Cisco Systems (NAS: CSCO) is getting tired of HP suing ex-Hewlett employees seeking employment at Cisco. One HP engineer left his post to seek greener pastures at Cisco, only to have an "emergency lawsuit" filed to keep him from taking the opportunity. And that's just one example of a disturbingly common trend, according to Cisco. "Trade secrets are protected by intellectual property laws, not by non-compete agreements and vague theories that a new job would 'inevitably' cause an employee to use trade secrets of his or her former employer," says Cisco's top lawyer Mark Chandler. I couldn't agree more.
Everything HP touches doesn't exactly turn into poison and mud, but a series of questionable board-level decisions has left the company often looking silly. Short of a total overhaul of the board and concomitant executive refresh, I don't see the once-mighty tech titan ever returning to its former glory. I've got skin it this game thanks to a big red thumb in Hewlett-Packard in our CAPS system. Follow HP and the rest of my CAPScalls right here.
At the time thisarticle was published Fool contributorAnders Bylundholds no position in any of the companies mentioned. The Motley Fool owns shares of Microsoft, Cisco Systems, Intel, and Oracle. The Fool has also bought calls on Intel and created a bull call spread position on Cisco.Motley Fool newsletter serviceshave recommended buying shares of Cisco, Microsoft, and Intel. Furthermore, we have recommended creating bull call spread positions in Intel and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. We have adisclosure policy.
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