Oracle 2011 Annual Report Download - page 15

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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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