Oracle 2010 Annual Report Download - page 17

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manufacturing, professional services, public sector, retail, travel, transportation and utilities. For example, we offer the banking and financial services sector a
suite of applications addressing cash management, trade, treasury, payments, lending, private wealth management, asset management, compliance, enterprise risk
and business analytics, among others. We offer the retail sector software solutions designed to provide unified and actionable data among store, merchandising
and financial operations. Our applications for consumer goods manufacturers are designed to provide them with the ability to build their brand against retail
private label programs by engaging directly with the consumer. Our ability to offer applications to address industry-specific complex processes provides us an
opportunity to expand our customers’ knowledge of our broader product offerings and address customer specific technology challenges.
Software License Updates and Product Support
We seek to protect and enhance our customers’ current investments in Oracle software by offering proactive and personalized support services, including our
Lifetime Support policy, and unspecified product enhancements and upgrades. Software license updates provide customers with rights to unspecified software
product upgrades and maintenance releases and patches released during the term of the support period. Product support includes internet and telephone access to
technical support personnel located in our global support centers, as well as internet access to technical content through “My Oracle Support.” Software license
updates and product support contracts are generally priced as a percentage of the net new software license fees. Substantially all of our customers purchase
software license updates and product support contracts when they acquire new software licenses and renew their software license updates and product support
contracts annually. Our software license updates and product support revenues represented 42%, 49% and 50% of our total revenues in fiscal 2011, 2010 and
2009, respectively.
Hardware Systems Business
As a result of our acquisition of Sun in January 2010, we entered into the hardware systems business. Our hardware systems business consists of two operating
segments: hardware systems products and hardware systems support.
Hardware Systems Products
Our customers demand a broad set of hardware systems solutions to manage growing amounts of data and computational requirements, to meet increasing
compliance and regulatory demands, and to reduce energy, space, and operational costs. To meet these demands, we have a wide variety of innovative hardware
systems offerings, including servers and storage products, networking components, operating systems and other hardware-related software. Our hardware
systems component products are designed to be “open,” or to work in customer environments that may include other Oracle or non-Oracle hardware or software
components. We have also engineered our hardware systems products to create performance and operational cost advantages for customers when our hardware
and software products are combined as engineered systems, as with Oracle Exadata and Oracle Exalogic Elastic Cloud. By combining our server and storage
hardware with our software, our open, integrated products better address customer requirements for performance, scalability, reliability, security, ease of
management, and lower total cost of ownership. Our hardware systems products represented 12% and 6% of our total revenues in fiscal 2011 and 2010,
respectively.
Servers
We offer a wide range of server systems using our SPARC microprocessor. Our SPARC servers are differentiated by their reliability, security and scalability; and
by the customer environments that they target (general purpose or specialized systems). Our midsize and large servers are designed to offer greater performance
and lower total cost of ownership than mainframe systems for business critical applications and for customers having more computationally intensive needs. Our
SPARC servers run the Oracle Solaris operating system and are designed for the most demanding mission critical enterprise environments at any scale. We have
a long-standing relationship with Fujitsu Limited for the development, manufacturing and marketing of certain of our SPARC server components and products.
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Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠