Big news: AMD-Intel, HP-3Com, Oracle-Sun

It’s been a week of big headlines in the technology field. The biggest story was the legal settlement reached between Advanced Micro Devices and Intel. These processor archrivals agreed to wrap up their legal disputes on business practices and patent issues, with Intel paying $1.25 billion to AMD.

While Intel was spared further expense in an antitrust lawsuit that was scheduled to go to trial next year, its troubles over alleged anticompetitive behavior are not fully resolved. The company is appealing the fine of more than 1 billion euros imposed earlier this year by the European Commission, responding to complaints by AMD. Back home in the States, Intel is facing a formal inquiry by the Federal Trade Commission and a federal antitrust suit brought this month by Andrew Cuomo, the attorney general of New York State.

AMD and Intel previously reached a legal truce in 1995 over microcode issues and licensing of Intel processor designs. The latest settlement calls for the two companies to monitor Intel’s business practices on a quarterly basis to make sure terms of the deal are met.

What the lawyers can’t do anything about is how well AMD will compete in the future. Three years ago the company bought ATI Technologies, a designer of graphics processors, and predicted then it would bring out a “Fusion” line of processors melding computing and graphics functions in 2008 and 2009. Guess what? Those Fusion processors won’t start shipping until 2011. Product rollout delays are common in the semiconductor industry, but AMD has traditionally been snake bit by such woes — as has Intel, to a lesser extent.

Another big deal is Hewlett-Packard‘s plan to acquire 3Com, the networking equipment vendor, in its bid to challenge Cisco Systems for supremacy in the data center. HP already is a player in the networking equipment field with its ProCurve line. Adding the 3Com line would fill some gaps in the ProCurve portfolio and build a solid No. 2 player in the market. Brocade Communications Systems, which is seeking a corporate suitor, apparently was stood up by HP and now may entertain offers from Dell or IBM, possibly even Juniper Networks, which doesn’t want to get left behind by Cisco and the HP-3Combination.

Garnering fewer headlines but still important is the European Commission’s antitrust inquiry into the proposed acquisition of Sun Microsystems by Oracle. That deal passed muster with antitrust authorities in the US, yet hit a regulatory snag this fall in Brussels. The Europeans are worried about what the merger would mean for the future of MySQL, an open-source database server software project that was acquired last year by Sun Micro. The theory is that Oracle would squelch MySQL once it got its hands on Sun’s assets and intellectual property, throttling any potential competition to its own database server products. The truth is that MySQL has a miniscule share of the database server market; in the view of the US Department of Justice, the open-source software wouldn’t give Oracle a stranglehold on that market. More importantly, MySQL is supported by volunteer programmers around the world and is available for anyone to use and to modify under the open-source model. Sun Micro paid $1 billion for MySQL to get the technical consulting and implementation services business associated with the software. Whether they got a good deal or not is a matter for debate. If Oracle makes MySQL a line of business or casts it off, MySQL is going to be around in the future, just like Linux and other open-source software efforts. The issue seems to be whether or not the European Commission decides MySQL deserves extra protection as an open-source bulwark against the US hegemony in the worldwide software industry.

Competition — it’s driving a lot of news in high tech.

~Photo courtesy of Intel Corporation.