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Oracle Grows Software Business, Moves Away from x86 Hardware

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Posted September 21, 2011 By Sean Michael Kerner     Feedback

Oracle CEO Larry Ellison says Oracle database already supports unstructured data and explains why he's moving away from x86.

Oracle (NASDAQ: ORCL) is continuing to grow its software business while moving away from commodity x86 hardware.

Oracle reported first quarter fiscal 2012 revenues of $8.4 billion, a 12 percent year-over-year increase. A key part of Oracle's quarterly growth was driven by a 17 percent year-over-year gain in software license updates and product support revenues, which were reported at $4.0 billion.

The revenue gains helped to fuel net income of $1.8 billion, up 36 percent from the year-ago quarter. Earnings per share (EPS) were $0.36, a 34 percent year-over-year gain. Moving forward, Oracle provided current quarter revenue guidance for growth in the range of five to nine percent.

Oracle is looking to further grow its revenues and income this year by moving away from the x86 hardware businesses and focusing on hardware that leverages Oracle's intellectual property.

"I don't care if our commodity x86 business goes to zero," Oracle CEO Larry Ellison said during the company's earnings call with analysts. "We don't make any money selling those things. We have no interest in selling other people's IP, and commodity x86 includes Intel IP and Microsoft IP."

Ellison said Oracle has an interest in selling systems that include Oracle's own IP, which includes the SPARC hardware architecture. He noted that in the current quarter, Oracle will be introducing four brand-new engineered systems products that combine Oracle software and hardware. One of those new systems will be a new SPARC Supercluster, and there are also plans for a Big Data system that will leverage the open source Hadoop project.

"Hadoop and all of the associated utilities with Hadoop, which uses the term Big Data for all of that, is going to be one of the feeder systems to the Oracle database," Ellison said. "So we think that as more and more data gets computerized, a lot of that data will find its way into an Oracle database and it allows our database business to grow at an accelerated rate."

Ellison also took time during the earnings call to explain Oracle's database approach for unstructured data. He said that Oracle's database has long supported both structured and unstructured data.

"We think we really don't want to have two separate databases, kind of an Autonomy-like unstructured database and Oracle-structured data," Ellison said. "We think that data should be integrated with a single database technology. That's always been our strategy for Oracle."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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