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As part of the ongoing lawsuit about whether or not Oracle had committed itself to supporting its software on Hewlett-Packard's Itanium-based servers, the software giant did a core dump of very interesting documents that show what many of us suspected: that HP did indeed mull acquiring the Sparc/Solaris business and that HP did in fact have a skunkworks that was porting the HP-UX variant of Unix to the x86 processor from Itanium.

It looks like at one point HP was also working on a big fat SMP server to run that HP-UX variant, and based on the Opteron processor from Advanced Micro Devices.

As is the case with any heated issue, there are many different sides to the Itanium story – at least three in this particular case, with HP and Intel's side being just two points of view and Oracle's being the third. You can also bet on it that Oracle was very careful about what documents it presented in its effort to show that HP and Intel were not exactly pleased about the way the whole Itanium thing had turned out and were arguing about who should pay what in the ongoing development and manufacturing of Itanium chips.

For those of us who enjoy the intense competition in the Unix server space, the two most important documents that Oracle outed relate to Project Blackbird (PDF), which was a rationalization for buying Sun Microsystems back in February 2009, and Project Redwood (PDF), a four-prong battle plan that HP cooked up in March 2010 – two months after Oracle completed the acquisition of Sun.

The Project Blackbird analysis reveals where HP's Business Critical Systems business was at this important juncture. Scenario A more or less conforms to the current reality except that it did not predict that Oracle would upset the Itanium applecart in March 2011 when it decided to cease development and support for its database, middleware, and application software on future Itanium hardware.

HP is for all intents and purposes the only Itanium server seller and its HP-UX Unix is entirely dependent on Itanium processors. In Scenario A, HP continues to develop Itanium systems with Intel and drives $30.8bn in revenues from Integrity and Superdome machines from fiscal years 2009 through 2014 (inclusive), with $1.4bn in research and development costs and a net profit of $12.8bn. This includes all hardware, software, and services revenues in any way tied to an Itanium system.

In Scenario B, Itanium development stops with the quad-core "Tukwila" Itanium 9300 processors and revenue over those six years drops to $22.8bn, while HP does $500m in R&D, and brings $9.2bn to the bottom line. If you do the math, the margins are a bit higher in Scenario A, but not by much.

HP-UX 'on a death march'

The interesting thing is that, either way, this BCS business is in decline, just like the Unix business at Oracle is in decline. It is worth noting that even IBM knows it cannot sustain growth in the Unix space much longer and is trying hard to expand the Power Systems franchise into areas where X86-Linux play well.

HP liked the synergies between HP-UX on Itanium and Solaris on x86, and added that Solaris was the leading Unix in the United States with HP-UX being the leader elsewhere. There could have even been some play with the Zettabyte File System running on ProLiant servers to make "industry standard" storage arrays.

The most damning page in this presentation – it is not clear who gave it – lays it out plainly enough, with page 6 saying that "HP-UX is on a death march due to inevitable Itanium trajectory" and adding that 45 per cent of the revenue and 60 per cent of the gross margins in HP's Technology Services group come from HP-UX systems and "we do not have a go-forward."

The Project Blackbird presentation goes on to say that x86 is "on a credible trajectory to fulfill all aspects of RISC within 5 years," that HP is not going to own its own "software IP stack" on which to "build value" as hardware gets commoditized, unlike rivals Cisco Systems, Microsoft, VMware, and NetApp. (HP forgot to mention IBM, which has lots of software stacks, not just one.) Buying the Sparc/Solaris business from Sun (or perhaps all of it, it is not clear what bits HP was looking at) would give HP a Unix on x86 iron with strong ISV support and would make it "a two horse race in the enterprise: Solaris and Windows (which both run best on our platforms)" and HP would move Sparc blades into the BladeSystem c7000 chassis much as it has done with Integrity and Superdome 2 machines, and has promised to do with this year's Project Odyssey.

HP was also contemplating the fact that it could use Solaris in switching products and added that Cisco has dependencies on Solaris (this may not be news to you, but it is to me), and worried about what would happen if IBM got its hands on Sun. HP was worried that Big Blue would consolidate all of its efforts onto a single operating system (presumably Solaris, but maybe AIX) and use the Transitive QuickTransit emulator that it bought back in November 2008 to emulate all other apps running on all other platforms. HP said such a deal would saves its x86 server business "from disaster," give IBM storage cred and control of Java, and isolate HP-UX.

That last bit pretty much describes what Oracle has done by buying Sun and then dropping the iceberg in front of Itanic.

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