HP says Oracle Violated Contract, Seeks Billions

Story first reported from reuters.com

Oracle Corp violated a clear contract with Hewlett-Packard Co when it decided it would no longer make new versions of its database software compatible with HP's Itanium-based servers, a lawyer for HP said in court.

The two technology companies faced off on Monday for opening statements in a bitter lawsuit over Oracle's decision to end support for Itanium. An Oracle attorney, meanwhile, said Oracle never agreed to give up its business flexibility in the "brief, breezy" contract language cited by HP.

The trial, in which HP seeks up to $4 billion in damages, comes just days after Oracle lost a separate high-stakes case against Google Inc over smartphone technology.

Oracle decided to stop developing software for use with Itanium last year, saying Intel made it clear that 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, without which the equipment using the chip would become obsolete. HP said that commitment was affirmed when it settled an earlier lawsuit over Oracle's hiring of ousted HP chief executive Mark Hurd.

In court on Monday, HP lawyer Jeffrey Thomas said the Hurd settlement clearly bound Oracle to continue offering its "best products" to HP.

As a sign of the importance of the contract, top executives from both companies -- including Oracle President Safra Catz and then-HP enterprise chief Ann Livermore -- negotiated the deal, Thomas said.

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

However, Oracle attorney Dan Wall said the Hurd settlement language was merely designed to settle employment litigation that HP had initiated against Oracle. It was not backed by the kind of painstaking negotiation that takes place over a strategic business partnership, he said.

Itanium is a declining product, Wall said.

"HP is trying to force Oracle to support a technology, Itanium, that Oracle does not believe in," Wall said.

Instead of a jury, Santa Clara Superior Court Judge James Kleinberg will decide the first phase of the trial -- namely, whether there is a contract between HP and Oracle, and its terms.

If Kleinberg decides in HP's favor, then a jury will decide whether Oracle violated the contract, and damages.

In court last month, Kleinberg compared the case to a divorce, saying "this case appears to be the end of a marriage" between the technology giants.

Top officials from both Oracle and HP could take the stand, with HP's Livermore, who is now a board member, set to testify first.

Intel Corp is not a party in the lawsuit, although its CEO, Paul Otellini, might also testify.

The case in the Superior Court of the State of California, County of Santa Clara is Hewlett-Packard Company v. Oracle Corporation, No. 11-CV-203163.

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Judge: Oracle Obligated to Make Software for HP Servers

Story first reported from bizjournals.com

A judge in California has ruled that Oracle Corp. is obligated by contract to develop software for some flagship server systems sold by Hewlett-Packard Co.

The Wall Street Journal reported the ruling was an important victory for H-P, because its sales have been hurt by the possibility that future versions of Oracle's program would run on some of H-P's high-profile servers. Similar partnering issues have involved shipping software.

The ruling will allow further arguments on the case before a jury, in a case in which H-P is expected to ask for as much as $4 billion in damages from Oracle, the Journal reported.

Oracle said it will appeal Wednesday's ruling and will pursue its counterclaim that H-P misled Oracle, the Journal reported.

Hewlett-Packard is the parent company of Plano-based HP Enterprise Services.

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Will Web-scale Servers Find a Role in the Enterprise?

PC World

An emerging class of extremely low-power servers is helping Internet companies and hosting providers to slash their energy bills, and proponents say they could have a role in the enterprise as well.

The servers, offered by established players such as Dell and SGI as well as start-ups such as SeaMicro, cut power use by reducing server components to a minimum, aggregating fans and power supplies across several servers, and employing low-power processors normally used in netbooks and other mobile devices, such as Via's Nano processor and Intel's Atom chip.

Examples include Dell's "Fortuna" server, which crams 12 mini servers based on Via Nano processors into a 2U chassis. It's a fully functioning server with its own storage, memory, management controller and dual 1GbE cards, but each server consumes less than 30 watts of power at full load -- far less than a typical server of the same size. Dell developed the server with Web hosting companies in mind.

More radical is SeaMicro's SM10000, introduced in June, which crams 512 single-core Z530 Atom chips into a 10U system, or about a quarter of a standard server rack. SeaMicro's breakthrough is a custom ASIC that replaces most of the components on a typical server board, including storage and networking controllers, leaving just three chips: the processor, DRAM and ASIC.

"The big processors are like taking a spaceship to the grocery store for most problems today," says Andrew Feldman, SeaMicro's CEO. "What you really need is a Prius."

SeaMicro says the boxes provide equivalent performance at a fraction of the power of traditional rackmount servers, and in far less space. It can cram 2,048 Atom CPUs in a fully loaded rack that burns just 8 kilowatts.

The low-power processors are not powerful, but they are well suited to workloads that can be broken into many smaller, separate tasks that are executed independently, said John Abbott, chief analyst at The 451 Group. "That's what the big CPUs from Intel and AMD aren't good at; they have to be fully utilized or they're not being efficient."

Web-scale companies such as Yahoo and Microsoft use the low-power servers for jobs like dishing up search results or displaying status updates. They are also popular among hosting providers who want to offer customers a dedicated server at minimal cost.

Data mining and more

While those companies are the main target for these low-power servers today, proponents say they could be used in the future for certain tasks at large corporations. The example most often cited is large-scale data mining, where the servers can be used to uncover trends among terabytes of data such as financial transactions, customer records and weblogs.

"I'm not advising anybody to migrate enterprise workloads to these new platforms. That would be a disaster," says Forrest Norrod, who run's Dell's server division. "But when you are doing new development, new services, you've got to start considering these new cloud architectures because they are going to offer the lowest marginal cost to compute."

For data mining, tools such as Apache Hadoop, which is open source software inspired by Google's MapReduce, allow petabytes of data to be distributed across a cluster of commodity servers and then searched and analyzed at high speed. Aster Data and Greenplum, recently acquired by EMC, also offer tools for distributed data mining.

"The big Web guys use this technology to ingest their weblogs," says Mike Olsen, CEO of Cloudera, which makes a commercial supported version of Hadoop. "They want to watch their user behavior at a very fine, granular level -- what pages do they visit, how long do they spend there, where do they go next."

But some financial services companies are running Cloudera for similar tasks, Olsen says. He cites one customer, a large bank that has acquired dozens of smaller banks throughout the United States. Each has customer data locked in siloed applications for tracking credit cards, debit cards and home mortgages.

"You want to be able to analyze that data to do a risk assessment, which is critical, but there's no way to easily search across all that data where it resides or to identify multiple instances of the same guy," Olsen says.

The bank copied the data into a large Hadoop cluster where it can search for patterns in a way it was unable to do previously, he says. For example, it can look for customers that defaulted on loans and analyze their transaction history during the preceding months, to uncover patterns that might help identify customers likely to default in the future.

Another potential use case is running the middleware used to authenticate and connect mobile workers to back-end ERP and CRM systems. "When everyone with a smartphone logs onto your corporate network at 8 o' clock on Monday morning, there's a server-side app that has to secure and maintain each connection," Norrod says. "That area is exploding and it's ideal for this type of system."

High-performance computing applications are also fertile ground. Scientists at the University of Kentucky are using a cluster of Dell C6100 servers, which were designed to offer high compute density, to simulate and analyze the movement of molecules. Vince Kellen, the university's CIO, says the systems could also be used for simulations in drug design or mechanical engineering, or for processing large audio and video files. "It's potentially useful wherever a large file can be broken into many pieces and analyzed," he says.

For sure, there are obstacles to the adoption of such systems in the enterprise. Big Internet companies tend to have homogenous workloads and can fine-tune their data centers for a particular set of applications, says Andy Bechtolsheim, a systems designer who co-founded Sun Microsystems and now leads product development at Arista Networks. "They have in many ways a simpler problem than enterprise data centers," he says.

He believes that "the jury is still out" on whether servers based on low-power Atom and Arm-based processors are really more energy-efficient. "What matters is not absolute power consumption but rather power efficiency, i.e., power used per application throughput," Bechtolsheim says.

Applications that will run across such a distributed architecture must usually be custom written, and there are technical limitations to the types of workloads that can be moved to a cluster of low-power systems.

"The things that become a challenge are the input/output resources and the cache resources, which are not something that these systems are known for," says Bill Mannel, vice president of product marketing at SGI. "So as soon as you get in a situation where you need to move a lot of data in and out, that's when you see a fall-off."

But SeaMicro's Feldman argues that pressure to reduce costs is forcing companies to explore alternatives.

"Today's databases are punishingly expensive and historically they run on expensive servers," he says. "People are doing anything they can to avoid buying more of them, and that's where software like Hadoop comes in."

Spending Soars on Internet's Plumbing

The Wall Street Journal

Behind the recovery in business spending is a surge in purchases of the computers that form the backbone of the Internet, as companies scramble to meet growing demand for video and other Web-based services.

The need to reach customers and employees over the Web is driving furious demand for server systems, the machines that power corporate computer rooms.

Many companies are stocking up on new Dell servers, which typically cost a few thousand dollars apiece, to replace older machines with more energy efficient models or systems with more powerful processors.

Also, an increasing number of businesses are turning to outsourcing companies, which manage computer rooms for customers and in many cases are sharply stepping up purchases of servers to keep up with rising demand.

"We've been buying thousands of computers this year," says Doug Erwin, chief executive of ThePlanet.com Internet Services Inc., a Houston-based company that runs data centers to offer computing services. ThePlanet says it now owns about 50,000 Dell Inc. servers.

International Business Machines Corp., one of the biggest vendors of servers, said Tuesday that sales of industry-standard servers and IT services jumped 30% in the second quarter, after rising 36% in the first quarter.

The buying activity became apparent last week, when Intel Corp. said quarterly revenue from its unit selling server chips rose 42% from a year earlier, while shipments driven by Internet-related companies' purchases nearly tripled.

Growth in Web traffic isn't a new phenomenon, but computer purchasing to keep up with demand is accelerating because of improving economic conditions and technology that makes purchases of new computers pay off more quickly.

On Thursday, Internet giant Google Inc. reported $476 million in capital spending, including spending on servers and other hardware. That was more than triple the amount it spent a year earlier.

Unlike Google, many companies are side-stepping the costs of building their own computer rooms, opting to place servers they buy in "co-location" centers that maintain machines and offer Internet connections.

Rackspace Hosting Inc., a San Antonio, Texas, company that runs data centers, says it added 9,152 servers in 2009, plus about 3,000 more in the first quarter of this year. Savvis Inc., a competitor based in Town and Country, Mo., says it has purchased more than 80% more servers over the last 12 months.

"All I see all day is trucks coming up to our loading docks dropping off servers," says George Slessman, chief executive of i/o Data Centers LLC, a Phoenix-based company. He says the number of customers that have installed servers in its computer rooms has risen from 140 at the beginning of 2009 to nearly 400 now.

The market research firm IDC puts spending on cloud-computing, a term that includes delivering computing capacity over the Internet, at $16.5 billion in 2009, and projects spending in the field will increase 27% a year through 2014—with the number of servers deployed in cloud applications expected to triple to 1.35 million over that period.

Forrest Norrod, Dell's vice president and general manager of server platforms, says the company has seen "triple-digit increases" in its cloud-related business year over year. "The cloud side is growing faster than the rest" of the server market, Mr. Norrod says.

There are several reasons. Companies keep stepping up the use of the Web to reach customers and adding features like video streams that require more computing power and faster network connections.

Such operations generate huge volumes of data, which have forced companies to buy more-powerful servers to help analyze the information, says Mike Long, chief executive of Arrow Electronics Inc., which sells servers and distributes chips and other components.

Meanwhile, companies that stocked up on servers over the past decade have struggled to find space, electrical power, colocation in Maryland, and labor to keep them running. Technology suppliers like Intel and rival Advanced Micro Devices Inc. have reacted by designing chips that offer lower power consumption as well as greater performance. They argue that switching to new servers with such chips can save enough on power and labor costs to pay for upgrades in a few months.

Intel, for example, has overhauled its Xeon line of servers chips to include a model with the equivalent of eight electronic brains on one piece of silicon. The company estimates that a server with four such chips offers a 20-fold performance increase over an existing server with four single-processor chips; that means one new machine can take the place of 20.

Even before factoring in models based on Intel's newest Xeon chips, pricing for some server vendors is on the rise; the average price of Xeon-based servers sold by Hewlett-Packard Co., for example, rose nearly 12% to $3,993 from the second quarter of 2009 to the first quarter of 2010, market researcher Gartner estimates.

Customers have responded, in many cases paying up for servers with high-end chips that command higher prices. Mr. Erwin of ThePlanet says it moved swiftly this year to Intel's new technology, saving his company money on power and labor costs and providing greater performance to offer customers at a higher price.

Zach Nelson, chief executive officer of Web-based software provider NetSuite Inc., plans to use H-P servers with Intel's most-powerful chips in a new data center in Boston. "It maximizes our customer experience and reduces our cost," he says.

Other companies are adding different systems for different computing chores. Susan Shimamura, the vice president of operations at IAC/InterActiveCorp's Ask.com, says the company has traditionally bought only low-end Dell server systems for its Web search function. While continuing that practice, it recently decided to also buy higher-end machines for databases that analyze how people use Ask, she says.

Big-name server makers are not the only beneficiaries. To offer cloud-style services, Rackspace prefers little-known suppliers for attractively priced "white-label" servers "straight from the factory in Taiwan," says Lanham Napier, its chief executive.

Just how long the server-buying boom will last is unclear, amid economic jitters and the fact that cloud companies tend to buy servers in advance signing up customers.

"It's the build-it-and-they-will-come model," says Bryan Doerr, chief technology officer of Savvis.

But companies pursuing cloud computing say demand is so strong that they aren't worried about adding too much capacity. "This is a major tectonic movement," says Manuel D. Medina, chief executive of Terremark Worldwide Inc., which says its cloud business has been growing 30% sequentially each quarter. "There's zero chance of a bubble."

Dell buys Scalent, Gains Virtualization Power

Bloomberg Business Week

 

Dell is purchasing Scalent, a provider of server-virtualization management software, Dell announced on Thursday. Terms of the deal were not disclosed.

Dell plans to roll Scalent's infrastructure management software into its own Advanced Infrastructure Manager (AIM) data-center software package.

Scalent's Infrastructure Manager software package provides the ability to manage both physical and virtual servers without making any physical changes to the network. It could work with both VMware and Microsoft Hyper-V hypervisors. The company pitched its software for managing rapid and dynamic deployments of servers, and also as a disaster recovery tool.

Like Scalent's software, Dell's AIM allows an administrator to allocate compute, storage and virtual application workloads from a single console.

The computer giant in Round Rock, Texas, is no stranger to Scalent's software. In September 2009, Scalent signed an original equipment manufacturer (OEM) agreement with Dell, for Dell to offer Scalent's Infrastructure Manager software under its own name.

Dell expects to complete the purchase of Scalent, a privately held company, by the end of this month.

Scalent, founded in 2003, is based in Palo Alto, California. In addition to selling its software through Dell, the company has served as an OEM provider to EMC and Unisys.

AMD Introduces New Server Chip For Data Centers

Story from Wall Street & Technology

Just in time for Earth Day, AMD is introducing its Opteron EE chip, intended for companies that have large, power-constrained data centers.

"The financial services customers we work with were among the major contributors of feedback that resulted in the development of this processor, especially New York City financial services customers who have limited power availability," Gina Longoria, senior product manager in the server and workstation division at AMD. "They really need to watch their power consumption, which makes power-efficient computing very important to them." She says many New York City customers are adding facilities staff as a part of their IT decision-making team because the need to stay within a power envelope has become so critical.

The quad-core Opteron EE chip draws an average of 40 watts of power. It runs at 2.1 and 2.3 GHz speeds and includes the virtualization and power management features of other Opteron chips, including Smart Fetch, Power Cap and CoolCore. Smart Fetch lets IT managers move data in inactive cores to L3 caches that draw less power. The Power Cap feature lets IT managers set limits on server processor power consumption based on known workload peaks and valleys.The CoolCore feature lets managers turn off the memory controller and L3 cache when they're not needed.

The new chip is capable of uniquely services colocation centers in many major U.S. markets, including:

Atlanta Colocation
Chicago Colocation
Los Angeles Colocation
New York Colocation

Independent consultant Neal Nelson says he recently ran a benchmark test pitting a server loaded with AMD Opteron HE processors against a server running Intel Xeon low-power chips. He says the AMD processors used 13 to 21 percent less power while delivering better throughput than Intel's. Presumably, the lower-wattage EE version of the Opteron would fare even better in such a test.

Longoria says all of AMD's OEM partners have expressed interest in this new processor. She expects the Opteron EE to used in custom solutions for large data centers.