Comments on: Whatever happened to Oracle’s server business?

By: norengo

norengo — Fri, 15 Mar 2013 19:53:30 +0000

Typical Oracle attitude. Phil, clearly an Oracle employee, wants us to believe that Oracle quarterly revenue = Sun hardware revenue. The reality is that Oracle’s hardware business is down the toilet and they should now be considered a niche vendor. Sorry Phil, but the real numbers don’t lie in spite of your valiant efforts to “prove” the contrary.

By: Barb Darrow

Barb Darrow — Thu, 14 Mar 2013 15:32:09 +0000

Q2FY12 from Oracle: Both GAAP and non-GAAP hardware systems products revenues were down 14% to $953 million

Q3FY12: Both GAAP and non-GAAP hardware systems products revenues were down 16% to $869 million.

By: Barb Darrow

Barb Darrow — Thu, 14 Mar 2013 15:27:56 +0000

this story was about Oracle, not iBM. Oracle’s entry into the server business when it bought Sun is recent news. IBM has been in the hardware business, well since it started decades ago The fact that Oracle execs said they could do better w/ hardware than other hardware copanies make them newsworthy. Oracle revs overall are up. Oracle revs from hardware are down. and down quarter after quarter as i put in the piece. true revenue does not equal profit but the fact that hardware rev keeps falling is newsworthy
In the first release you mention Q1F12 :

“Both GAAP and non-GAAP hardware systems products revenues were down 5% to $1.0 billion. ”

Oracle’s words, not mine.

thanks for your comment

By: Phil Dunn

Phil Dunn — Thu, 14 Mar 2013 10:44:22 +0000

Your perception of Oracle lock-in is completely false and misleading as there are very few Oracle products that have any lock-in at all, especially compared to its main competitor IBM, where they truly have many lock-in technologies especially related to tie-ins to its servicing arm. Oracles engineered systems can be easily migrated on to and off from without Oracles involvement and practically every Oracle technology is based on open standards and can run across many other vendors products.

As for discounting, have you seen IBM discounting up to 90% on its Power systems and HP giving away its Itanium servers to stay alive and relevant. Until you have some substantiations on your claims, they dont hold any water.

By: Phil Dunn

Phil Dunn — Thu, 14 Mar 2013 10:37:16 +0000

Figures don’t lie but liars do Figure. IDC and Gartner are not getting the full picture as I am sure non of the vendors are sharing their true revenue and unit #’s so its all a guessing game by IDC and Gartner.

Look at Oracle’s financial statements as a company and you’ll see that its quarterly revenues continue to grow. Hardware is a part of Oracles business now as the focus is on “Oracle Hardware Software Complete”:

Oracle Revenue:
Q1FY12-Total revenues were $8.4 billion, up 12%
http://www.oracle.com/us/corporate/press/495333
Q2FY12-Total revenues were $8.8 billion, up 2%
http://www.oracle.com/us/corporate/press/1430963
Q3FY12-Total revenues were $9.0 billion, up 3%
http://www.oracle.com/us/corporate/press/1561468
Q4FY12-Total revenues were $10.9 billion, up 1%
Oracle Corporation – Q4FY12 Earnings Press Release and Financials
FY12–Total revenues were $37.1 billion, up 4%

Look at IBM’s last 4 Qtrs of Financial statements and question how is it that IBM’s Power systems business is down so much?

IBM reports 2012 first-quarter results
“Revenue: $24.7 billion, flat”
“Revenues from Power Systems were flat compared with the 2011 period”
http://www.ibm.com/investor/1q12/press.phtml

IBM reports 2012 second-quarter results
“Revenue: $25.8 billion, down 3 percent”
“Revenues from Power Systems were down 7 percent compared with the 2011 period”
http://www.ibm.com/investor/2q12/press.phtml

IBM reports 2012 third-quarter results
IBM total revenues for 3rd Qtr of 2012 of $24.7 billion were down 5%
“Revenues from Power Systems were down 2 percent compared with the 2011 period”
http://www.ibm.com/investor/3q12/press.phtml

IBM REPORTS 2012 FOURTH-QUARTER AND FULL-YEAR RESULTS
“Revenue of $29.3 billion, down 1 percent”
“Revenues from Power Systems decreased 19 percent compared with the 2011 period”
http://www.ibm.com/investor/4q12/press.phtml

By: Barb Darrow

Barb Darrow — Fri, 08 Mar 2013 16:04:34 +0000

that’s what they keep saying. But i also hear the discounting is huge — they have to cut prices to move these machines. I think the real end game is support/service long term and many ORCL customers know that and don’t like the idea of that expensive lock in.

By: Vinod Shintre

Vinod Shintre — Fri, 08 Mar 2013 11:41:58 +0000

server who?

By: santosh

santosh — Thu, 07 Mar 2013 21:22:12 +0000

Sun’s acquisitions is value add to oracle and i am sure customers will make benefit out of it. Oracle has one of the world’s powerful hardware!

By: Wellington James

Wellington James — Thu, 07 Mar 2013 21:16:48 +0000

Remember business is not about what you make, but what you keep.
Although revenues are less on the hardware business, margins on the engineered systems are very good. I personally have not done the math to see which way the profits from that line of business is trending. Don’t assume just because the revenue is down, that the profits are as well.

By: Barb Darrow

Barb Darrow — Thu, 07 Mar 2013 17:50:43 +0000

I think Oracle really thought it could wring software-like margins out of hardware. Just don’t see that happening esp. in this new era, as you note. Plus software margins are in jeopardy as well.