Oracle 2015 Annual Report Download - page 45

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Table of Contents
• our acquisitions have increased our software support contract base, as well as the portfolio of products available to be licensed and supported.
Hardware Business
Our hardware business is comprised of two operating segments: (1) hardware products and (2) hardware support. Our hardware business represented 13% of our
total revenues in fiscal 2016, and 14% of our total revenues in each of fiscal 2015 and 2014. We expect our hardware business to have lower operating margins as a
percentage of revenues than our cloud and on-premise software business due to the incremental costs we incur to produce and distribute these products and to
provide support services, including direct materials and labor costs. We expect to make investments in research and development to improve existing hardware
products and services and to develop new hardware products and services.
Hardware Products: We provide a broad selection of hardware and related services, including Oracle Engineered Systems, servers, storage, networking,
workstations and related devices, industry-specific hardware, virtualization software, operating systems, and management software to support diverse IT
environments, including cloud computing environments. We engineer our hardware products with virtualization and management capabilities to enable the rapid
deployment and efficient management of cloud and on-premise IT infrastructures. Our hardware products support many of the world’s largest cloud infrastructures,
including the Oracle Cloud.
Our hardware products are designed to be easier to deploy, manage and maintain for our customers and to improve computing performance relative to our
competitors’ offerings. We design our hardware products to seamlessly connect cloud and on-premise IT environments to further enable interoperability,
interchangeability and extendibility and to work in customer environments that may include other Oracle or non-Oracle hardware or software components. Our
flexible and open approach provides Oracle customers with a broad range of choices in how they deploy our hardware products, which we believe is a priority for
our customers.
Oracle Engineered Systems are core to our hardware offerings and are important elements of our data center and cloud computing offerings including the Oracle
Cloud. These pre-integrated products are designed to integrate multiple Oracle technology components to work together to deliver improved performance,
availability, security and operational efficiency relative to our competitors’ products; to be upgraded effectively and efficiently; and to simplify maintenance cycles
by providing a single solution for software patching. Oracle Engineered Systems are tested before they are shipped to customers and delivered ready-to-run,
enabling customers to shorten deployment time to production. We offer certain of our Oracle Engineered Systems technologies through flexible deployment
options including as a cloud service and for on-premise IT environments.
We offer a wide range of server products using our SPARC microprocessor. Our SPARC servers run the Oracle Solaris operating system and are designed to be
differentiated by their reliability, security, and scalability. Our mid-size and large servers are designed to offer better performance and lower total cost of ownership
than competitive UNIX systems for business critical applications, for customers having more computationally intensive needs, and as platforms for building cloud
computing IT environments. Our SPARC servers are also a core component of the Oracle SuperCluster, one of our Oracle Engineered Systems.
We also offer enterprise x86 servers. These x86 servers are based on microprocessors from Intel Corporation and are compatible with Oracle Solaris, Oracle Linux,
Microsoft Windows and other operating systems. Our x86 servers are also a core component of many of our Oracle Engineered Systems including the Oracle
Exadata Database Machine, Oracle Exalogic Elastic Cloud, Oracle Exalytics In-Memory Machine and the Oracle Big Data Appliance.
Our storage products are engineered for the cloud and designed to securely store, manage, protect, archive, backup and recover customers’ mission critical data
assets. Our storage products consist of disk, flash, tape, virtual tape and hardware-related software including file systems software, back-up and archive software,
hierarchical storage management software and networking for mainframe and heterogeneous systems environments. We also offer certain of our storage offerings
as a cloud service.
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