California-based Oracle Corp. is placing its bets on its high-end servers, and the results are starting to show. A 12 percent increase in revenues of $8.4 billion was reported in the initial quarter, with gains of $1.8 billion.
Solid results in fresh software programs purchases and growth in in license updates and support services sales are greatly attributed with the boost, but double-digit sales gains for its high end servers also had an effect The numbers was just higher than expert projections of $8.35 billion.
The corporation has been shifting focus out of lower-end systems to higher end server systems along the lines of the Sun Sparc M4000 servers after a decline in hardware purchases after the buyout of Sun Microsystems in in 2010.
The Fight Of Falling Purchases
Since the buyout of Sun, Oracle's hardware revenues have been dropping. Hardware purchases in the 1st quarter were $1.03 billion, down 5 percent from the same quarter last year. There was, on the other hand, increase in the central Sparc servers product selection.
Oracle executives observed that high-end hardware systems, such as the Sun Sparc M5000, boosted in the double digits for the primary quarter, as x86 server revenue continued to decline, evidence that validates a change in focus to high-end systems. The executives said they were not worried about the drop in low-end hardware business and that the point of focus would continue on higher-end solutions.
Cause For Moving Sun Servers Point of focus
Upon purchasing Sun Microsystems, Oracle clarified it didn't plan to to compete in the area of low end server hardware but instead zero in on on high-end servers, like the Sun Sparc M4000 and Sun Sparc M5000 servers.
Aside from declining numbers for those systems, a big cause for Oracle to stop vying to compete for lower-end hardware business is that to have a payoff a robust sales volume is essential. With other hardware giants such as Dell and Hewlett-Packard currently contending in the low end system market, the likelihood of growing sales volume to large enough numbers to reach profits is largely diminished.
High-margin Sun Servers Being Focused On
Among the high end Sun servers Oracle is transitioning in the direction of are the M-series Sparc servers, including the M3000, M4000, M5000, M8000 and M9000. This chain of compliant Sun servers is designed for challenging enterprise applications. Oracle's other high quality server hardware include Exadata and Exalogic.
New Sparc servers are on the horizon, too, as part of the move away from low end servers, such as x86 servers, to higher end items. When announcing gains for the first quarter, Oracle additionally revealed more revamping of its high-end selection, including a new Sparc microprocessor and Sparc Supercluster server.
Oracle senior leadership have said they expect hardware purchases to continue to climb as the focus on top-quality systems is boosted, over time letting the company return to the profit margins it had prior to buying out Sun.
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