Oracle 2012 Annual Report Download - page 19

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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 Public Sector solutions are designed to provide national
and local governments with the ability to improve service delivery to citizens, increase internal efficiency and
improve transparency. 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 43%, 42% and 49% of our total revenues in fiscal 2012, 2011
and 2010, respectively.
Hardware Systems Business
Our hardware systems business consists of two operating segments: hardware systems products and hardware
systems support.
Hardware Systems Products
We provide a complete selection of hardware systems and related services including servers, storage,
networking, virtualization software, operating systems, and management software to support diverse public and
private cloud computing environments. We engineer our hardware systems with virtualization and management
capabilities to enable the rapid deployment and efficient management of cloud infrastructures. Oracle’s hardware
systems support many of the world’s largest public and private clouds, and power Oracle’s own internal cloud
initiatives, including our software development private cloud and Oracle University’s self-service private cloud.
Our hardware products and services are designed to be “open,” or to work in customer environments that may
include other Oracle or non-Oracle hardware or software components. These products and services also help to
meet customers’ demands to manage growing amounts of data and business requirements to meet increasing
compliance and regulatory demands and to reduce energy, space and operational costs. 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 Oracle Engineered Systems.
Our Oracle Engineered Systems include Oracle Exadata Database Machine, Oracle Exalogic Elastic Cloud,
Oracle Exalytics In-Memory Machine, SPARC SuperCluster, Oracle Database Appliance and Oracle Big Data
Appliance. By combining our server and storage hardware with our software, our open, integrated products better
address customer and cloud computing requirements for performance, scalability, reliability, security, ease of
management and lower total cost of ownership. Our hardware systems products represented 10%, 12% and 6% of
our total revenues in fiscal 2012, 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
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