Thank you. Thank you for coming. 2013 Financial Analyst Meeting. Very excited to have you all here. I would be remiss if I did not pass up on the opportunity with the lead-in video here to just, again, I think at least internally, we're living in the glory of this moment in that we've seen what is truly the most remarkable comeback in all of sporting history. Just phenomenal. One of the key elements of the team will be in a little bit later this afternoon to speak with you all about that. Hoping. He'll be here. I don't think you can stop him from being here. Let's see. Some basic housekeeping things. If you haven't already gotten lunch, outside. If you don't know where the restroom is, down the hall. If you don't know how to use Wi-Fi, go to another meeting.
Careful not to trip, in all seriousness, though. We've got a lot of electrical in here. We try to help you out with power and availability. Make sure you don't kill yourself or make a fool out of yourself, so careful coming in and out. The doors. The doors, you'll notice, there's some chairs at the back. Over here, you've got doors. We'd like you to use the egress to come in and out. As a courtesy, when you open up the big doors, a lot of light comes in. Makes it hard to see some of the screens, so let's try to use that door. You also should have received an email which points you to the survey. As you'll see when we get to the agenda, we try to make the event better for you each and every year.
Some of the feedback you provided last year resulted in some of the changes in the format this year. I encourage you've got it, go online, complete as you go. It just makes it a little simpler. This is always my favorite slide. I don't write it, but I certainly get to read it. As a reminder, today's discussion will include forward-looking statements, including predictions, expectations, estimates, or other information that might be considered forward-looking. While these statements are forward-looking and they represent our current judgment on what the future may hold, they're also subject to risks and uncertainties that may cause actual results to differ materially from the statements being made today. Throughout today's discussion, we will attempt to present some important factors relating to our business, which may potentially affect those forward-looking statements.
As a reminder, we're not obligating ourselves to revise or publicly release the results of any revision of these forward-looking statements in light of new information or future events, and we would encourage you to review our most recent reports on forms 10-K and 10-Q, and any applicable amendments for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. I also would like to make sure that as we go through the presentations, in particular the technology discussions with Thomas and team, that they're being presented today for informational purposes. Finally, we will be using, shortly here, in the financial discussion, we'll be talking about some non-GAAP measures.
Just want to make sure you understand what goes behind some of those. Thank you for your indulgence. You're going to see some of our presenters present these first two safe harbor slides. When they get to that part of the presentation, they may make reference to what Ken discussed earlier. This is what they're talking about. Let's turn to the agenda. I'll, and shortly here, just spend a few minutes just walking you through some of the financial highlights. Many of you understand Oracle, so I'll be brief. We'll just drive home a couple key takeaways from the financials we would want you to be thinking about. Safra would like to come on up and just share a few thoughts with you. What we'll do is we'll get into the technology. Namely, a lot of discussion today about engineered systems in cloud.
Thomas will start with a development overview. Juan Loaiza will come up, speak about our engineered system strategy. Andy Mendelsohn will follow, talk about in-memory software. Thomas will come back up on stage talking about platform and infrastructure services at Oracle. We'll get into the applications. Steve Miranda, Chris Leone, Thomas will all be talking about ERP, HCM, and customer experience. Time permitting, we'll get some questions from Thomas. That should take us up to right around 2:00 P.M. We'll have a little bit of a break. Give you a chance to take a breather, get some food, soda, use the restroom, whatever. We'll come back. After the break, our Chief Communications Officer, Bob Evans, who's here today, will be leading a panel discussion with three of our customers. I made references earlier to surveys and your feedback.
One of the things that always comes back, would love to hear more here from the voice of the customer. The voice of the customer will be here today. Bob's going to be leading a panel discussion talking about how some of our prime customers at Praxair, UBS, and the University of Pittsburgh Medical Center, how they're using Oracle technology to better run their business so they can focus on running the business, and the technology being taken care of with their efforts and Oracle. That'll take us to about 3:00 P.M. We'll take another short break. We've got a couple breaks today, spreading it out a little bit. What we'll do, if you've been following the America's Cup, we'll be going around marker number 4, heading for the finish line. As we do that, Safra and Mark will basically take a Q&A session.
It's free-form. This is your opportunity to ask the questions that you really would like to have addressed. This is it. We know you enjoy this part of the program. Lastly, Larry will come on in, and we'll talk about that. As a personal suggestion, those of you asking questions of Larry, whoever starts off first, he'll decide who he wants to call on. I would just encourage you somewhere, segue in America's Cup into the question. Because if you don't, he's going to talk about the America's Cup. I have no doubt. It's a phenomenal event. I actually, if I have to give my little coaching here, there's a lot of Oracle as part of Team Oracle in terms of the technology.
Think about a question that kind of wraps the two together because they do work together. Okay. Let's turn to some financial highlights now. Obviously, there's a lot going on at Oracle from both the technology and the financial perspective. The breadth and depth of our technology is without peer. Safra, Thomas, and the others will be talking with you about that. My job is basically to distill down our financials and our business model into a couple key takeaways for you. To start, Oracle is the world's largest enterprise software company. Notice I say the word software. Yes, we have a hardware business, and yes, we have a services business. But at the core, Oracle is a software company. That software revenue has grown very steadily over the last 10 years. Last fiscal year, constant currency growth of 7%.
Most recent quarter, constant currency growth of 8%, and most of that organic. That software revenue turns out to be very important for us as a company, because software drives earnings for Oracle. Nearly 90% of our company margin is driven by software. It's our business model that makes that happen. When we sell software licenses, we sell software support as virtually all, underscore the word all, customers attach a support contract to their software licenses. When we talk about software support, you can think of this being like subscription revenue. Subscription revenue in a very large installed base that gets bigger and bigger and bigger every year as those customers renew those support subscriptions. Here you can see how the installed base has grown dramatically.
Essentially almost quadruple the size of what it was 10 years ago, and software support now makes over half the revenue of the company. That turns out to be very important because software support, in turn, drives most of the margin and profit for software, which in turn drives the earnings for the company. Of course, you see that running through our financials. Operating margins up 1,100 basis points in 10 years. Actually, it's 1,100 basis points in seven and a half years, because along the way, we picked up a hardware business that essentially was running at zero operating margin. In two and a half years, we essentially are back at record levels, and we continue to see very strong margin in our business. Growing revenue, expanding margins have done very well for our ability to generate cash.
Just this last quarter, we generated over $6 billion of free cash flow. To help put that in perspective, that's more than double the free cash flow that we generated 10 years ago, and we've done it in one quarter. Coming at it a different way. We're essentially now on par in generating free cash flow with IBM, when just five years ago, we were generating half the free cash flow of IBM. The strength and the technology of our business model have resulted in a remarkable ability to generate cash, as I mentioned. We've taken that cash, and we've reinvested it back in our business through R&D to develop new products. We've also acquired nearly 100 companies, and we've returned $39 billion to shareholders in the forms of dividends and buybacks.
More recently, as we look into capital allocation, you can see there's been a dramatic increase in that capital allocation and return of cash to shareholders. The dividend has been recently doubled. Over the last four quarters, we've reduced the share count by more than 4% or 5%, excuse me. You see all these elements coming together in our earnings per share growth. Earnings per share over the last 10 years up at a 20% CAGR. In wrapping up, the elements that have enabled us to be successful in earnings growth in the past, namely a growing software business, expanding margins, and share repurchases, have generated very good earnings per share growth, and we see a very bright future for that same EPS growth over time. With that, I'll turn it over to Oracle President and Chief Financial Officer, Safra Catz.
Thanks everyone, and thanks for coming today and sharing this week with us and the exciting win we had yesterday. I usually put up a bunch of slides and talk about our margins and our cash flows and our durable, unique nature of our business model. We talk about the fact that we acquired a hardware company, and we still deliver margins in excess of really all of our competitors. We talk about our ability to deliver EPS growth, both organically and with the use of our cash. It dawned on me that you actually already know a lot of that, because that's why you're here. That's why you're shareholders of Oracle and one of the reasons you've been with us.
What I thought I'd do today, though, is actually, and I wrote it down so that I make sure I hit all the points, because I assume they're obvious. I actually assume that you all recognize that the things we've been working on for over 30 years, which is performance, scalability, and security. What we have spent literally $ billions building and continue to invest $ billions into every year. I actually took as for granted to some extent, that that is actually more important today than at any time in history. As the changes come, that Larry's vision actually saw years ago, that the heavy compute model would be-- we didn't call it cloud, he didn't call it cloud, but would be in very, very scaled performant data centers. The users would have simple devices and yet be able to access immense amount of capabilities.
Those days are actually here, and they come and they get bigger and bigger every day. They actually work towards us because no time has it been more important to have the massive scale that is necessary, the intense performance, and the security. We believe that all roads actually lead to us, that the secular changes are great for us. You know what confirms that feeling every single time? It's not our own internal meetings or anything. It is our customers. It is one customer after another. As you all know, I run day-to-day operations, so I don't get out much. I'm not in sales. I don't meet that many customers on a daily basis. In Oracle OpenWorld, they let me out, and I get to actually talk to our customers who make our products fly, who actually finally get use out of our products.
Do you know what some customers told me? Exadata saved their job. For the Oracle transformation they did with fill in the blank, JD Edwards, E-Business Suite, Fusion, changed their company. We have massive industrial companies come here with not 100 people, but 300 people they send here because they know how critical our technology is to them, and they want to be. You know how many customers tell me? They actually want to be first to using some of our products. That's what's going on. Every single year, the enormous scale and ability to handle massive amounts of data securely are more important. Larry said it a long time ago, I just actually saw it on a video I'd never seen, which is this is the information age, not the data age, but the information age.
What actually in many ways makes it even harder these days is there is such enormous volumes of data, yet businesses now have to stay on top of it. It's our products that make that possible. Our products allow them both the ability to handle these enormous amounts of data, but also the analytics and the tools. Okay. Every year, I've been working with Oracle actually since the '80s. I've been actually employed at Oracle since 1999. Every once in a while, a period comes when folks believe that's it. Database is maxed out. It's going to slow down. There are secular changes, Oracle will be left in the dust. I've now heard it probably half a dozen times. Each time we look in it, we continue on, we persevere, and we focus on meeting our customers' needs.
We came out with engineered systems, I want to talk with you a little bit about that because our entire intention with engineered systems is to package solutions for our customers so that they become the best way to implement our systems, our software. Our design goal was not 10% better than what IBM has or Dell has, not 50% better. Our actual design goal was 10 times better. I've been watching, as I hope some of you have, watching the America's Cup. The way we work at Oracle is to try to always do the unexpected, the impossible, and to break with conventional wisdom. Delivering software as part of an engineered system has really created an entirely new area that business is doing very well for us.
I cannot tell you how many customers walked up to me, not even ones I had meetings with, telling me they have two Exadatas, they're getting four more. They tried it, they're going forward because they said it was compelling. That's our goal. Our goal is not to be a little bit better or a little bit different. Our goal is to be way better because the demands of technology are bigger today than at any other time. I have to tell you, it is our moment. We know it is. Whatever the economy brings us, we will ultimately gain share. For the past 30 years, we've been working, each time we have a new secular competitor, we have outlived and outgrown all of them in every single sector.
With that, I want to turn to cloud, because the way we approach cloud is, frankly, somewhat different than all of our competitors. What we think is that in cloud, a customer still should have choice. I was asked, actually, at one of these big industrial meetings, what's the best practice for cloud? Do you go all cloud, or do you go half and half, or do you stay on-premise? You know what the answer to that is? The answer to that is, it depends on what the customer wants. Only our product line gives them the flexibility so that they can run the exact same code base on-premise, in a private cloud, or in the public cloud. By the way, after they've made that choice, they can change their mind. They can start off in the cloud and bring it on-premise, or vice versa.
Only we can do that. 2, there's this concept or word term called cloud services, cloud services, I almost don't even understand it. It's like jumbo shrimp. The whole idea behind cloud is to minimize services, to make it as simple as possible, as quickly up and running. Yet only we actually have the capability to deliver a fully integrated cloud services, whether it's HR or ERP or CRM. Again, a competitor you would think would be trying to do that is SAP, yet all we hear about is HANA, not a single word about bringing their entire base into the cloud. For us, we think all of these things bode very well for us. Finally, I want to cover big data, the Internet of Things. I've gotten the question, is big data the end of Oracle?
I've stood up here and I've tried to explain to you that big data is great for Oracle. There has historically been no bigger data than what we handle every year. When our competitors come up and they say they can handle 1 million blah, whatever it is, per day or per week or per month, we can handle whatever it is per second. The more data, the more actionable intelligence our customers want to get. To get that, they use Oracle. No matter how they collect it, if they want to use Hadoop, we want to make sure that Hadoop brings it in. Ultimately, the more data there is, the more Oracle they buy. Mobile, how do we play in mobile? Again, all those devices inevitably reach back into systems running Oracle.
These are the Internet of Things, big data, social, mobile, all of these things ultimately result in enormous volumes of data that have to be handled securely, with high performance, and handle massive size, which requires scalability. For all of these things, we continue to invest. I think what you'll see is that very similar to what happened with the sailing team the past couple of weeks. There's a moment where everybody thinks, "Oh, yeah, they're finished. It's over." Not so clear now. Thank you for coming. We hope you get a chance to spend as much of the day with us as possible. Thomas and his whole team are going to actually go over individual products and segments so that you can see how all of these play into our strengths.
We are, as you can tell, very confident about our ability to get further and further in front of our competitors. To any competitors that may be in front of us in any particular area now, they should be careful because we have a history of winning at the end. Thank you. Thanks very much, and I'll see you later.
Thank you. At this point, we'd like to shift the conversation into one of technology. With that, let me introduce Executive Vice President, Thomas Kurian.
Good morning. It's my pleasure to be with you. I'm going to give you an overview of our product strategy, and then we're going to give you an update on some key areas of product where I'm sure all of you have questions. I'm going to start with the safe harbor. Our product strategy. We're focused on three important things. To deliver engineered systems, which combine hardware with our software to deliver breakthrough performance, scalability, and availability innovations. Second, to continue to deliver the best-in-class database, middleware leading business applications with brand-new capabilities which drive new options and drive additional revenue for Oracle. Third is to take Oracle's best-in-class infrastructure software, our platform technology database and middleware, as well as a complete suite of business applications, and deliver it to customers through the Oracle Public Cloud.
These three allow us to then use our scale, our install base, and our product breadth to upsell and cross-sell solutions to customers. Our strategy, if you look at it, involves taking these three software systems, database, middleware, applications, and vertically engineering them on engineered systems to deliver really great performance, reliability, and availability advantages, as well as to make sure every piece of this stack is best in class, and open, and works in a multi-vendor environment, allowing customers choice. Okay? We are a leader in many, many, many market segments. Even if you look at Gartner's Magic Quadrants, we lead in over 90 product categories, and we entered 13 new product categories this year. Okay? This year was a busy year for our software team. We delivered a number of new product releases, and we are going into a very strong product cycle.
We are a leader in database. We introduced Oracle Database 12c with a number of important new options, the in-memory database, the multi-tenant database, advances in compression, much more new capabilities in Oracle GoldenGate and Oracle Active Data Guard, et cetera. Second, we also introduced Oracle Fusion Middleware 12c, there's a lot of new capabilities in Oracle Fusion Middleware 12c. Support for mobile solutions, extending identity management, which is our leading security suite, up to the cloud, and also to mobile technology, support for a back end to support the Internet of Things, et cetera. Then finally, in applications, we introduced in every major product line at Oracle OpenWorld, we announced a major new release. Oracle E-Business Suite 12.2, PeopleSoft 9.2, JD Edwards 9.1.2, a new version of Oracle Hyperion, a new innovation pack for Siebel, as well as new industry and edge applications.
We are going into a very strong product cycle with lots of new product capabilities. Now, today, though, we're going to focus on five topics because they're top of mind for you. The first is engineered systems and the view that we have on the growth of that business and the new products we're introducing there. Second, we'll talk about in-memory database and what the fundamental differentiator is between our in-memory database and others. Third, we're going to do the cloud, we're going to talk about our platform and infrastructure services, the ERP solutions we offer in the cloud, human capital management, and customer experience or CRM. With that, I'd like to invite my colleague, Juan Loaiza, to come up and talk through the strategy we have and the new products we're delivering in engineered systems. Juan, welcome.
Okay. Thanks a lot, Thomas. I'm going to do a very brief presentation. I think about 10 minutes is what I have on engineered systems. I could talk for hours. I have been talking for hours all week, actually. Let's start with our safe harbor. This is very important. Please read all that very quickly. Then if you haven't had enough of that, read it again. Now we go on. Let's see. Okay. Our strategy is really, we want to win across the board in engineered systems. We think they're going to be good for data warehousing, transaction processing, for applications, for in-memory, for analytics. We're going after the whole market with engineered systems. That's a very basic strategy. It's pretty simple. We think we can win across the market. We have a number of engineered systems today.
Our first engineered system is Exadata Database Machine. That's probably our lead engineered system. It's been in the market the longest. It is doing extremely well in the market. We have Exalogic, which covers middleware, bespoke applications, web applications. Exalytics analytic platform. I think Mark had mentioned we'd had an unbelievable quarter last quarter with Exalytics. We introduced Big Data Appliance a little over a year ago for Hadoop. That's been extended to also be a platform for our own NoSQL database. We have SuperCluster, which is SPARC-based, which handles multiple application workloads. That's been updated to our new SPARC chip. We also introduced a couple of, I think, three new engineered systems this year, which I'm going to talk a little bit about. Before I go on and talk in detail about these, let me say, really the key thing about engineered systems, it's a software-led effort.
It's a software-led architecture. We show pictures of machines. We have lots of hardware. We have great hardware. The key thing that differentiates us from a lot of the other players in the market is it is a software-led effort. The database team leads the database machine effort. The middleware team leads the middleware machine effort. That's both on the product side and on the sales side. For example, a database machine is sold primarily by our database sales force. They are the ones that can articulate the value prop of it. That really makes it different because the software team owns the product and is responsible for making it succeed. That means they're incented to adapt their product to run best on these platforms. For example, in the database machine, we have written a lot of software.
We have a large team that's been going now for about eight or nine years, writing software that exclusively runs on our database machine that makes it a better platform for running our database software. I'll talk a little bit about that in a minute. Key value props, faster time to value. I just talked to one of the big banks today. They said they get an Exadata in two weeks, it's in production in a mission-critical application. Two weeks' time from the time it hits the dock to the time it's running mission-critical applications. Extreme performance, we've talked about that. We have any number of case studies for that. Much lower TCO, much lower risk. Deploying an engineered system is a much lower risk option for a customer. It comes completely locked down, engineered. We've taken care of all the problems.
We've made it very highly available, very robust. It also provides one-stop support. We have special support offerings around our engineered systems. There's a lot of benefits to our engineered systems. Let's go on. I'm not going to go into the details of this, but I want to emphasize there is a lot of software in the engineered systems. That is really the key. That's what sets us apart from everybody else that sells systems in the market. These are engineered, meaning there's a ton of software that is specifically written. It runs our industry-leading software products that Thomas mentioned. You can't do this unless you have a big installed base and customers are using your software to begin with. You can sell them an engineered system. You can add the extra differentiators for running that software on the engineered system. That's very different.
It's not something that you can replicate in another company. You have to have the Oracle Database that's installed in every company in the world. You have to have WebLogic that's installed in every company in the world. You start with that and build on that. That's not something that somebody else can waltz in and do. The other thing I want to mention is we've gone on a journey with our engineered systems. We started out, for example, Exadata, we started for data warehousing, OLTP, consolidation. The next big thing with engineered systems is what we call Database as a Service. In our database, we have multi-tenant option. It's no longer looking at individual applications, or not so much no longer only looking at it yet.
The way we've sold them in the first few years is we said, "Hey, give me this really hard problem, and we're going to prove to you that this thing is going to work." Your industry, by the way, the financial industry, has now become the number one industry by far that's interested in these engineered systems. Over half my schedule this week was filled up by financial services companies. What we started with was the really hard problems. Risk management, regulatory reporting, the problems that were really making a lot of trouble for financial service companies. We took the hardest problem in the company, and we said, "We're going to solve that problem for you." Now we're in there. Now we've proven ourselves with the very hardest problem.
The next step that's happening now is expanding that footprint to encompass the whole rest of the systems in the enterprise. That's what we're seeing more and more of. It's the snowball that's starting to roll. If you talk to your own IT department, what you're going to see is they've taken one, two, five, 10, 20, 30 of these systems now. The next step is let's take 50 or 100 because we're going to move everything onto this. We're going to move en masse. It's no longer, I'm going to pick one application that's really hard and deploy it there. I'm going to move a very broad mass of my systems onto there. That's what's really going to grow this market for us.
It's also going to make it easier because when you're taking on the hardest problem in the company, there's a lot of proof that has to go around. When you move down a step, it becomes much easier. The customers are already very comfortable with the platform. They've deployed it. They know about it. They've tried it. They've got their own experience on it's much easier to deploy in a widespread fashion. Exalogic, same kind of thing. There is a ton of software in Exalogic that is specific to Exalogic, and that's what differentiates the product from every other product on the market. The same thing is true of Exalytics. There is a ton of software.
There's a lot of very specialized software that we've written, the software team has written for this platform to make sure it outperforms, it has better ROI, better time to value, better availability, better management. It's the safer choice than other platforms on the market. All those things together are the big differentiator for our engineered systems. Actually, there's three engineered systems that we've introduced this year. I'm going to talk about two very briefly, the two that Larry introduced in his keynote. He introduced the M6 Big Memory machine, which we're building an engineered system from called the M6 Big Memory Supercluster. This is actually an interesting twist in the market. Andy's going to talk in a minute about our new in-memory database option.
When you go to in-memory database, something interesting happens, which is we have been moving toward commoditized systems for a lot of years. If you go back to the 1990s, a lot of customers deployed big SMP systems. As you went into the 2000s, that market started declining, and the market for commoditized two-socket servers more or less took over. This new technology that's coming in, this in-memory database, is very interesting because that's going to run really well on systems that have a lot of shared memory. If you have a cluster, in-memory's going to work great. It's not going to work as well as a big SMP because you're going to have to communicate with other nodes in the cluster to get their memory.
If I'm on node 1 and I need to access the memory that's on node 3, I got to send a message to node 3. It's got to go get that memory for me and send it back to me. In a big SMP, you don't have to do that. You want a piece of memory, you just go get it. It happens in nanoseconds. It's an interesting development in the industry. The pendulum swung very far away from these big SMP systems for a number of years, and it's very possible this new memory technology will start swinging the pendulum a little bit back. It remains to be seen, like I said, in the market. We have now introduced this machine along with our new in-memory database option. It's going to be a great combination.
I think I've seen a lot of customers interested in this technology again that haven't been interested in the big machines for a long time. Anyway, that's an interesting development in this area. Just a quick slide. Our new big SMP machine, actually, it's a very powerful machine, has a lot of memory, has a ton of cores. It's very high bandwidth network, very high bandwidth to memory, and it's very low cost. If you compare it to our leading competitor, we're way ahead on all the metrics that matter. It's a brand-new system. It's really quite ahead. It's quite far ahead of the competition in all the metrics that matter here. Okay. Another engineered system we've just introduced. We have things for database, for middleware, for analytics, for big data.
This is actually taking another step, something that Larry calls the Database Backup, Logging, Recovery Appliance, and I can even say that now. This, again, it's taking a different approach to a market that's existed for a while. Customers take backups all the time, right? They back up their data in order to protect their data. The state of backup today is frankly quite poor. If you take a backup of your system last night and you have a problem now, you're going to lose all your data between last night and now. Right? That's the way it works. That's not what anybody wants anymore. Look at yourselves, financial services, retail, telecom. Nobody wants to lose data. Nobody can accept losing data anymore.
The big news with this Database Backup, Logging, Recovery Appliance is we'll be able to deploy these in customer data centers, and we'll no longer lose data. We'll be able to back up their production systems and go to the CIO and say, "How do you feel about not losing data anymore? Does that sound good to you? Are you happy with losing your financial data? Are you happy with losing your customer data? Are you happy with losing your order data? Does that make your users happy when that happens, or does that drive them absolutely bananas? Since data flows around the enterprise, if you lose part of that data, what about that huge mess you have about the data that partially went to all these other systems? How do you sort that out?
How do you feel about not having that problem anymore?" I've actually talked to a lot of customers about this this week. People are very excited about it because the fact of losing data is no longer acceptable in 2013. It's a very simple value prop. It's very simple to explain. In addition to that, there's a lot of other value props. It puts a lot less load on the production servers. It's much easier to manage. It has much faster restore times. It manages the data end-to-end through disk, tape, and replicas. There's a lot of other value props as well. This is a new engineered system that was introduced by Larry this week. It opens up a new category in the market where, again, we're trying to take it up a big notch from what exists in the market today.
There's a lot of differentiators. We really have a very unique product in the market in terms of what we have. Nobody else has a combined OLTP-warehouse consolidation appliance. Nobody else is looking at this kind of multi-tenant architecture at all, or particularly with an engineered system, where this is also very powerful in public clouds. We announced last June a very large deal with salesforce.com to base their infrastructure on Exadata. They're not doing that because they love Oracle. They're doing that because they see the value of it. That's how powerful the systems are. Let me just finish up here. We have a ton of customers running Exadata now. We have thousands of customers. Or I should say our engineered systems now, they've been on the market for about five years.
Our customers are seeing very big value props, huge speed-ups, huge cost savings, much safer to deploy, great returns on ROI, lots of consolidation, and just freeing up their IT to actually do more useful things. That's all I'm going to cover today. I'm going to hand it off now to Andy. He's going to talk about our new in-memory database options and our new in-memory efforts across the companies.
Okay, thanks, Juan. I'm actually going to start off by giving you even a bigger picture of what we're doing at Oracle with our in-memory software across the stack, then we'll drill down into the in-memory database that Larry announced on Sunday. Okay. Oh, we got this slide again. Okay, let's start with strategy. What we want to do is leverage the new technologies that are coming out. The latest processors, DRAM, flash memory technologies, to deliver the best in-memory software performance. Might I add, we also are driving the chip vendors to make sure they are adding to those chips the technologies and support we need to make our in-memory software run really fast. We work with Intel and our own SPARC chip designers on in-memory processing.
Of course, in the database tier, we want to deliver the best in-memory database, and we want to make sure this database runs all the traditional database workloads at a high performance, whether it's a data warehouse, OLTP, or anything in between. Big data, et cetera. As we move up the stack into the middle tier, we are doing in-memory data caching, in-memory business intelligence as well. Finally, at our applications tier, we are delivering business value there by delivering applications that are optimized to run on our in-memory software technologies. Okay. Let's go down to products, some specific products. Let's start at the bottom up. Oracle is now, as you know, a hardware vendor. We don't design flash memories, but we leverage flash memories and DRAM memories. We do design chips.
I can tell you, our SPARC chip designers' top priority right now is to make sure that their chips run the Oracle Database and our other in-memory software faster than any other chip on the market. This is their top priority. This is what they live and breathe. This is life and death for them. Make our software run fastest on their chips, right? I can tell you, the competing chip vendors are not only focusing on that direction. Moving up the stack, in-memory database, of course, Oracle has two products there, and I'll talk a little bit more about both TimesTen and Oracle Database. Moving to the middle tier, our TimesTen technology can be used as a relational database cache in the middle tier. Of course, we have Coherence also, which is our in-memory data grid technology.
We have in-memory business intelligence. We have our Exalytics appliance that Juan talked about, that delivers high-performance in-memory business intelligence. Our in-memory applications, and I'll talk briefly at the end about what we're doing there. Okay, let's start drilling down into the database. We have two database products, in-memory database products. TimesTen is the world's leading in-memory database product. It's the most widely deployed in-memory database by far. What's its use case? It is primarily used as an embedded database. It gets embedded into prepaid billing applications or program trading or gaming systems. It gets embedded right into the application tier itself. Because of that, it can deliver sub-microsecond response time, very low latency response times for applications that need incredibly high-performance, real-time processing. It's also embedded in our Exalytics BI appliance.
The in-memory database for Oracle Database is going to go after the rest of the market. The traditional stuff we run, transaction processing systems, ERP, data warehouses, data marts, et cetera. This product, where TimesTen is pure in-memory database, when you start up a TimesTen database, you take all the database data, you load it all into memory, so you have to have enough memory to store all the data in the database. With the Oracle Database, we're not going that approach. We want to be able to deal with gigantic petabyte data warehouses. There's no way any customers are going to buy enough main memory to store all that in-memory. We have an architecture where we want to store all the data on disk and then bring data into flash memory and DRAM as it's being accessed.
I hope a lot of you saw Larry on Sunday night, if you missed him, he did a really great job introducing our in-memory database technology in about 45 minutes, I'm going to do about a 5-minute version of that. I think there's a replay of Larry available on oracle.com. You should all go and watch that. What are we doing here? My group prides itself on being five, 10 years ahead of the competition in our relational database technology. From time to time, there's a feature that we're not the first with, in-memory column store technology that Larry described is something where we're not the first. When we're not the first, we aim to come out with a technology that's not just a me-too technology. We are going to blow away the competition with what we're doing.
Anybody who saw what Larry demoed knows what I'm talking about. This technology is going to be seamlessly integrated with the Oracle Database, which means all those other things where we're five to 10 years ahead of the competition are all going to transparently work with this in-memory technology. All those great applications that people have written for all the years are going to continue to work. They're just going to run faster. We are going after all the typical workloads. As Larry mentioned, our goal here is make analytics run 100 times faster. Our goal is also make transaction processing run faster, only maybe by a factor of two or so. The key thing here, again, when we do innovation in the database group, almost everything we do is transparent to the applications that are out there today.
Customers don't have to rewrite a line of code to take advantage of, for example, 12c multi-tenancy that we added to the database as part of the 12c project. The same thing's going to happen here with in-memory database technologies. Everything's going to work. All the applications will continue to function. The capabilities our DBAs know and love, like RAC and Data Guard, all that stuff will continue to function, things will just go faster. I'll do a very quick intro to what we're doing and why it's quite different from the competition. Larry goes through this in a lot of detail, again, he does a really good job, you should definitely watch him. The bottom line is that there are two ways of representing data in relational databases. There's a row format and a column format.
Row formats are really good at doing transaction processing. TimesTen, for example, is a row format database. Column format, on the other hand, which has been around for quite a long time, 25 years people have been experimenting with column formats, has always been good for analytics, but it's not really good for transaction processing because it's really hard to update the data. The problems with what people are doing up till now with in-memory databases is they make people make a choice. When I create a table, do I optimize it for OLTP and use row format, or do I optimize it for analytics and use the column format? What we've decided is, okay, people want both. They want fast OLTP, they want fast analytics, and they want to be able to do analytics on the transactional or operational data as well.
What we are going to provide is this dual format where we have both row and column formats in memory at the same time, and we have our query optimizer smart enough to figure out, based on the workload being run, which format to use. We keep these two formats completely transactionally consistent. As far as a developer or a user is concerned, it's all consistent. As Larry showed some demos, this stuff is incredibly fast. 100 times faster for analytics, at least. He demoed us running at over 7 billion rows per second on a single core on an Intel processor. Our competitors actually have announced that they're very excited because they can run about half that performance. This is already double the performance of what our competitors claim they can do. Juan talked about Exadata.
On Exadata, of course, we will be running this in-memory technology. On Exadata, we implement this mass memory hierarchy, where all the data can be stored on disk at the cost of disk, which is 100 times cheaper than main memory costs. We can store lots of data, petabyte-scale databases, at very low cost, and we will bring the data into memory, into flash, and then into main memory to deliver extremely high performance at the best cost performance. As I mentioned before, this technology is completely transparent to applications. Every application written against Oracle will continue to run with this technology. The DBA designer just has to tell us whether they want a given table to be in-memory or not, and we will make the application just run faster, transparently to the application developers. They won't have to write anything.
Of course, all the applications from Oracle and third parties will continue to work with no change. The other thing, actually, that's mentioned on the slide is there's no migration. If you want to go to 12c with the in-memory technologies, you don't have to take all your data and change the format on disk. You could have terabytes of data. It could take you days to do that. You don't have to do anything. You just install the new version of the software, you tell us which tables you want in-memory, and you're up and running, and running fast. Let's go to the differentiators for this technology versus the competition. The number 1 thing here is that we are the first database vendor to really go this dual format route.
We are the only ones who can really deliver analytics against your live operational data. Nobody else can really do that. Everybody has a compromise. One competitor says store everything in a column store, which makes the analytics run fast, but makes the transaction processing or ERP run slow. Others say, no, sometimes use a row store, sometimes use a column store. We're the only ones that do this dual format. We have a unique advantage there. I mentioned before, extreme capacity, cost effectiveness. We are not requiring all your database data to go into main memory, which would be very expensive as databases get very large. We have this mass memory hierarchy on our Exadata storage, which of course is in the Exadata Database Machine and the SuperCluster. We are a chip design company.
Our SPARC chip designers are working feverishly. I can tell you they are determined to deliver a chip, their next-generation SPARC chip, that is not going to be just about the same as Intel's chips, but much, much faster at running in-memory database technology. We're very excited about that. We call that our software and silicon strategy. Finally, as I mentioned before, this is all transparent to all those applications that have been written for Oracle all through the years. There's no migration. Why would somebody move their database to some other database? It's a huge, expensive effort. You have to rewrite applications, retrain DBAs. With Oracle, it's a simple transition. You just install the new software. You're done. Right.
The other last thing I wanted to mention, of course, is that, once we have this feature, there are also the 25 years of differentiators that Oracle has in the database space that all come into play. Again, why would you use an immature database that's been out three years or whatever, when you can use a very mature, robust, scalable, secure, highly available product from Oracle? Let's just go quickly through some of the differentiators here. Oracle has always run on all the different platforms, hardware platforms, operating system platforms. The contrast is people like Microsoft SQL Server, it only runs on Windows, on Intel chips. SAP HANA, it only runs on Linux, on Intel chips. They don't run on SPARC chips. If SPARC happens to be a little faster, we will benefit from that. They won't.
Of course, we run on everybody else's platforms as well, whether it's IBM or IBM Power, HP Itanium, whatever. Okay. Again, we just announced Database 12c. We have the first enterprise database redesigned for cloud computing. We have this very exciting new option. I can tell you every customer at OpenWorld is incredibly excited about this multi-tenant capability in 12c. Plus we have things like RAC and Exadata that make us a great platform for running private clouds or running databases in the public cloud for software as a service. We have our integrated systems for big data and data warehousing. That's very unique. Our Exadata is a great platform for data warehousing, as well as our Big Data Appliance that Juan talked about for Hadoop and our NoSQL database.
Finally, we have this very unique and differentiated technology for high availability architecture, consisting of things like RAC, Data Guard, and GoldenGate. That's the quick run-through of what we do for in-memory database. I'll just quickly mention, of course, as you move up the stack, we have an initiative that Steve Miranda's group is doing with our in-memory applications. Of course, we are going through all of our applications, we mentioned about 12 here, that take advantage of our in-memory technologies on our engineered systems especially, and run much, much faster. I'll go quickly through a few customer examples of customers taking advantage of our in-memory technologies. The first two are TimesTen examples. China Mobile, of course, is the biggest telco in the world. Guangdong China Mobile is using TimesTen for their prepaid billing application.
U.S. Postal Service, every envelope that's sent through the mail is being scanned by a system powered by TimesTen, that in real time is looking for fraud in the postal system. UniCredit, big Italian financial service company, is using Hyperion on our Exalytics in-memory machine, delivering 10 times better performance than they were getting for planning before they were on Exalytics. Finally, Fulton Hogan is a large Australian civil construction company. They are taking advantage of our JD Edwards in-memory planning application, again, getting great value from that. With that, I will now hand things over to Thomas Kurian, he's going to talk about the cloud.
Now that we've covered two of the topics that you had all asked us questions about, which is the growth in engineered systems and how we feel that in-memory databases, we have a technology that any customer can run any application on with enormously faster performance, without having to migrate to a new platform, retrain all their people, pay for additional license from a different vendor. I wanted to focus now on the cloud. On the cloud, we've got a very simple strategy with the Oracle Cloud. We want to deliver a complete suite of cloud services that are all engineered to work together. They consist of three parts. Infrastructure as a service, including elastic compute and elastic storage and identity services.
Platform as a service, including our database, middleware, and a set of services focused to developers and a set of services focused to business users. A full suite of software as a service, including ERP, human capital management, customer experience, supply chain, and social. Let's start by looking at infrastructure as a service. The first thing that's clear is we are the only vendor that offers infrastructure, platform, applications, all in one cloud. If you look at Amazon, they offer infrastructure. If you look at Salesforce or Workday, they offer applications. If you look at Azure, it does platform and infrastructure. We believe that companies need all three. By putting them in a single cloud, if you're a person who's buying human capital management and wants to extend your applications with a platform or infrastructure, you can do it in one cloud.
Rather than saying, "I got my human capital management application in one cloud, and to get infrastructure to go with it, I got to go to a totally different cloud, manage data across both, manage security policies across both." Let's start by looking at what we're doing with infrastructure. We are in the final stages of rolling out these platform and infrastructure services. On infrastructure, we start with the two big ones, object storage and compute or elastic compute. These came from an acquisition. The technology came from a small acquisition that we did of a company called Nimbula. Nimbula are the core 30 engineers who wrote Amazon Web Services years ago. They are now part of our engineering team and have a very proven technology stack to allow you to get object storage and elastic compute.
To that, we add a number of capabilities, identity management, caching, message queuing, and sync. These are all services that developers who are building a cloud application typically need. Let's look at object storage. The core thing is if you want to take digital content, or files, or backups of our database, or any kind of archive, you can go to our cloud. You can request a certain amount of object storage. You program to load the data using either a Java API or a REST API, and we support an industry standard called OpenStack. It's not proprietary to Oracle. You can simply load the data. You can load it either from one of our cloud applications into that, or you can take an on-premise system and load data into that.
Because it's built on a very proven stack, we have a lot of capabilities around performance, scalability, and you can choose your quality of service, single mirror, double mirror, triple mirror, and you get the resource granted to you, and you can use it. Second, we also offer elastic compute. Elastic compute is you can get a virtual machine instance in the cloud. It is fully isolated from a network point of view, and we also give you the capability called Elastic IP, which means you can burst up and down workloads. If you're running an e-commerce site and you need extra capacity for Black Friday for a few hours, we auto-scale it up or auto-scale it down, and you can choose a variety of different profiles of workload, standard workload, CPU intensive, or memory intensive workloads. Now, to this, we added the platform as a service.
This is basically we're delivering a full suite of Oracle platform technology, database, Java or WebLogic, developer service, mobile service, document management, business intelligence, and we also are live now with a Cloud Marketplace. I'll talk about each one. When you look at the Oracle Database as a Service, today what we have available is something called a schema as a service. We have a number of customers using it. I'll talk about that. But this gives you a full-fledged dedicated database instance. You can get a full-fledged dedicated Oracle 11gR2 or 12c database instance in a cloud. You can pick one of three flavors, a single node, a single node with disaster recovery, or a fully, highly available configuration, which includes RAC.
What's interesting about what we're doing with our platform services compared to what other cloud vendors do, the question we get asked is, why would I use your cloud platform as a service compared to taking Oracle and running it on AWS or Azure? It is because we manage the database for you. Okay? In Azure or AWS, you get the ability to take an Oracle binary and run it on a compute service. If you want to patch that database, you have to patch that database. If you want to upgrade that database, you have to upgrade that database. If you want to configure it for high availability, you configure it for high availability. What they give you is really infrastructure as a service and the ability to run an Oracle image on it.
What we give you is the ability to get a fully managed environment. Okay? All the things that you would expect. We do nightly backups. We give you point-in-time recovery. We patch it, we manage it, we upgrade it for you. The core value proposition for customers is the following. If you buy infrastructure as a service, we're giving you the ability to use hardware for a shorter period of time. For example, if you're running a workload temporarily, or we can do it in a more cost-efficient way. We certainly offer that with our elastic compute and storage. With our platform as a service, what we are really doing is displacing the heavy cost that IT organizations have associated with managing environments. There's a significant differentiation in what we're doing with platform as a service than any other cloud provider does.
That's example number one, Database as a Service. Java as a Service is very similar. What we're doing is putting our WebLogic Server in the cloud. You get a full ability to access the WebLogic instance, both on the database and WebLogic. It's a dedicated environment, all the tools that you use on-premise simply work. You want to manage it, you use Enterprise Manager. You want to load data into it, you can use your favorite ETL tool. You want to start and stop this instance, you can do that. The advantage we give you, therefore, is full portability between your on-premise environment and the cloud, and back from the cloud to your on-premise environment. It's literally as easy as another database or another WebLogic instance on your premise.
That opens up a set of people who want to use TestDev and other workloads in this environment. It really opens it up because they come and say, "This literally looks a standard Oracle WebLogic and database. I can program against it. Once I'm done, if I want to take that workload back on-premise or if I've got something on-premise, you simply export the file, put it in there, and go." The value we give you is we manage it, we maintain it, we patch it, we back it up, we restore it. We do all of that for you. For developers, we're also offering two important new services. You can use our cloud strictly as a place you run apps, but you can also use our cloud as a way to get teams of developers to collaborate.
We give you a Git repository up in our cloud. We give you a source control, continuous build, an environment for developers to collaborate. We have a bug management system, a task tracking system, et cetera. This allows us to offer one-stop shopping for developers. You don't have to say, in order to build an application on the cloud, I still have to have an on-premise source control system and things of that nature. One of the big applications we see people wanting to build are mobile apps. We've got a mobile service that allows you to take your on-premise applications or cloud applications, and without installing any technology on-premise, extend them out to both tablets and smartphones, and get a secure endpoint in our cloud.
For business users, we're also in the final stages with these two services, document management and business intelligence. Document management is you get a cloud folder where you can store documents. You get a project team and a team workspace. You have the ability to create projects and share documents with people, and then we can sync that to a number of different devices. For business intelligence, if you're a user who uses business intelligence and wants a data mart in the cloud, and you want an instance of our analytic tools to build and publish reports from, you can go directly to our cloud and get access to it. Finally, we also have a service up called the Cloud Marketplace.
What this is, if you're a customer of our SaaS applications, or if you're an ISV who's running your applications on a cloud or a partner, and you want to make it easily accessible so that people can find applications they want and complement us. We provide you an environment where you can build your applications in our cloud, publish them to the store, and users can come, see the ratings and reviews about your applications, and then evaluate it and buy it. Today, we have about 160 big, important partners up, and there's another 300 or so that'll go up over the next 3 to 4 months. There are lots of differentiators between what we're doing. I wanted to touch on a few of them. It's the only cloud that offers the broadest range of Oracle software fully integrated. Each service is highly differentiated.
Take our platform service called the Database Service. It is the only place, only the Oracle Cloud gives you the right shared storage so you can run Oracle RAC and Data Guard in a highly efficient fashion. No other cloud gives you that. You can't get a highly clustered, highly available system in other people's cloud. We fully manage it. That's a big value for customers, that we manage the backup, point-in-time recovery, patching, and maintenance. That is the thing that customers want from a cost point of view to get out of their IT function, is all the work, manual labor associated with doing that, and we do that for you. Lastly, we integrate it seamlessly with our applications, so that if you want to extend our applications, you can easily pick and choose one of these, deploy them in the cloud, and use it.
If you're a CRM team, you want, as part of our Sales Cloud, you want a little data mart to load your own data and do analysis. You want to share documents so that when you're building a sales plan to go after a particular customer, you want your demos to be put somewhere. You can use our Document Cloud, you can use our Analytics Cloud and do all of that. You don't have to go anywhere else. There are lots of customers using the platform layer. A year ago, we introduced the Java and Database Schema as a Service. Here's a small set of the example customers, I thought I would give you a flavor of four of them, which give you a sense of what kinds of things people are doing. Deloitte. Deloitte's a system integrator.
They actually do projects, eventually, the software associated with the project is going to run on premise at one of our customers. They don't want to buy machines, install it, configure it for the duration of the proof of concept, because eventually that software's going to run on-premise. You can do it on our cloud then take the software because it's 100% standard Oracle software. You can simply move it when they go to an on-premise environment. There's a lot of interest from system integrators to do that. Siemens, big German multinational company, customer of ours. They had an e-commerce application for partners. They didn't want to run that infrastructure. They put it on our public cloud Platform as a Service. They run it in production. This is not a temporary project. They're running it in production. You may ask, does this appeal to mid-market customers?
Windstream Communications. They're a smaller voice and data network communications company. They use our database and Java Cloud Service, they are in production on application because they wanted something very fast to spin up an infrastructure very fast to get an application up and running. Then an example of an applications customer who wanted to extend the applications, Zamil Industrial is a company that's large, conglomerate in Saudi Arabia, E-Business Suite company. They wanted to extend E-Business Suite out to mobile and also integrate it with a variety of other systems. They're using our Platform as a Service in the cloud to do that.
First step in the cloud was to add to our SaaS applications, our great platform technology, an infrastructure to both extend the applications and offer customers an environment where they can build, deploy, and get applications up and running quickly, then the business user solutions to complement it. We are going to focus on drilling down in these three important areas, ERP, HCM, and customer experience, all about our cloud products for that. I'd like to invite my colleague, Steve Miranda, up to talk about ERP.
Thank you. Good afternoon, everyone. To start off the application part, something we're not going to talk about, I'll just cover it at the beginning, is everything that Juan and Andy and Thomas just talked about in terms of the platform, that's all leveraged and differentiators in our application cloud. We run our application cloud on our engineered systems. We run our application cloud on our database. More than that, we run our application cloud on the database as it was intended to be used. In other words, we do not commingle customer data together in a multi-tenancy fashion, which really eliminates all of the security features that Andy and Juan and their teams have built over the years for the Oracle Database.
In the cloud, where security is of the utmost importance, leveraging that capability, that investment, that scalability, and all the security components that we've talked about in the database as differentiators is key in the cloud for applications. All of our applications run on our engineered systems. All of our applications run on our database, leveraging all of those facilities. In addition to that, we believe we have the broadest suite, in fact, unquestionably, the broadest suite of applications in the cloud available today. HR, talent management, enterprise planning, financials, marketing, sales, and service across CRM. More than just broad, let's go ahead and drill down into the three areas. I'm going to start off with ERP, talking about financials, supply chain, projects, and procurement.
Across ERP, in the cloud, I'm going to talk about how we have the broadest set of ERP applications available in the cloud today. More than that, we have the deepest set of applications in the cloud and the most scalable set. By scalability, I mean not only the most performant to handle the most volumes, but also scalability to be the most global. That you can run the applications in anywhere in the world, or you can be a multinational and be confident that we have the capabilities to support you in terms of size of performance, as well as scalability for performance. Within our ERP, what is our objectives and strategy?
We want to take the modern capabilities, integrate things like social, integrate things like the modern analytics, integrate things like mobile for self-service experience into the ERP platform. I'll give you several examples as we go through the details. We want to take the deep functional breadth that we've had for years at Oracle and use that knowledge and leverage that knowledge from our PeopleSoft install base, our J.D. Edwards install base, and our E-Business Suite install base. Not only do we have the teams that have built these products globally and scaled them for years, we have the customers to give us input on the requirements and scalability and needs they have for ERP and leverage that to bring the best-in-class scalable, and for ERP, really legislative-required functions across ERP. Add business intelligence pervasively throughout the product set, add and embed social pervasively across the product set.
Let's talk about breadth, first of all. As I said, the broadest set of applications. Specifically, financial planning and budgeting. Core finance, meaning GL, AP, AR. Governance, risk, and compliance for both audit as well as Sarbanes-Oxley and similar type of requirements that are available globally. Reporting for both business reporting and management reporting. Procurement, not only internal procurement, but external indirect procurement, as well as sourcing capabilities and reverse auction capabilities. Supply chain categories like costing and inventory. Project and portfolio management for the service-related industries. Within each area, I said not only do we have the broadest, but we have the deepest. Let me give you a couple examples of the depth of the applications that are just differentiators. I'm not going to go through the nuts and bolts.
Like within financials, of course, we do journal entries, of course, we do AP invoicing, of course, we do payments, of course, we do bills receivable, et cetera. In addition, within financials, we took a couple key areas from our learnings in the past, as well as our investments in our technology. Two specific examples. Within the consolidation and the GL process, what was the state-of-the-art before the cloud was basically you would have a PeopleSoft GL or an E-Business Suite GL, and then you would have a Hyperion consolidation. Many customers use that today. With the combined organizations, with Hyperion as well as our financial development teams, we looked at, well, that really works really well, but what are the key problems that customers have? One was a problem with timing.
Is at the end of the month, is it in their GL, is it in your consolidation system? What happens? The second was the issue of drill down. I've now pushed it to my consolidation instance. How do I drill down to actually find the details when I need to do data analysis? The third was security. Most companies have a management hierarchy for management reporting, and they have a line of business hierarchy for kind of the line of business to give those reporting. Keeping those two in sync was problematic. That's why most organizations have a back-office finance group. What do they spend most of their time doing? They run tons and tons of reports and try to get those reports out to the line of business. Why can't they do that self-service for the line of business?
They have to have the security hierarchies lined up for what that line of business could see. What most back-office finance groups do is spend lots of time slicing and dicing these reports to push those out. What do we do with our approach? When we built our cloud-based financial applications, we really combined the two pieces. When you post to the general ledger in the financials cloud, you simultaneously post to the Essbase cube, which is a Hyperion consolidation engine. What did that do? It eliminated the timing problem because we simultaneously do it. It eliminated the drill-down problem because we retained the links between the two systems together. It eliminated the security problem because it allowed us to manage the security within one place instead of two disparate systems.
We took best-in-class capabilities but made 3 significant advancements, what nobody else can do, and it's a significant differentiator in what tends to be a, "Well, that's just general ledger, so there's not much going on there in terms of innovation." Significant advancement, significant differentiator. Secondly, across something as fundamental and frankly just rudimentary or boring as AP invoices. What do we do about that? We now have document image scanning technology, as well as character recognition technology for AP. You used to have to go to a partner, and in fact, with most of our competitors in the cloud, you still have to go to partners for image scanning. You have a separate workflow. We've built that in. In our Financials Cloud, you now scan invoices. We have character recognition.
It brings the invoice on the screen, it automatically routes the workflow, eliminating a whole set of capabilities or whole set of manual entries you had to do in the past as far as financials. Of course, we have the broadest set of applications from the core financials, reporting, analytics, planning and budgeting, cash and treasury, travel, revenue, and the statutory reports. The project and portfolio management. Frankly, this is one entire slide that most companies in the cloud don't have at all. What is it? Project and portfolio management is really geared at any company that's a service organization that does business on behalf of some customers and perhaps bills those customers. Any system integrators or consulting-type companies, legal-type companies, financial service-type companies, any company that works on a project, IT organizations, build those projects back to different customers.
What do you do? You plan and budget those projects. You do forecasting around the projects. You have a budget which you then have cost control. You have things, basically billing and revenue management, because basically the way you bill those projects are, you use funds, expenses, or internal funds, and then you bill those funds to your customer based on it, and then there's specialty accounting rules. The entire project portfolio management suite is an area that folks like Workday and NetSuite have not even the products, much less the depth in the products. Moving to procurement and supply chain. Beyond core purchasing, and again, major components that the folks like Workday and NetSuite don't even have the product, much less the depth of the product. Sourcing.
Basically, if you're doing indirect procurement or you do direct procurement, and you want to have an online auction or an online reverse auction, or have particular RFPs put out to respond for procurement and online sourcing. Contract management to not only store the contracts but negotiate the contracts that's there. Analytics on top of the applications. If you're a supply chain company or a company that actually does business on hard goods, having inventory management and then costing, which is essentially accounting around movement of inventory and how you treat the inventory for depreciation and other pieces, kind of costing capabilities. Modules nobody else has in the cloud beyond core ERP, core financials. Order management logistics.
I talked about the breadth, I talked a little bit about the depth, but I also said we're more scalable than everybody else, and I said scalable in a couple of ways. Scalable in terms of most throughput in the application, but also scalable in terms of most global in the application. What most companies will tell you is they're global because they have translation. We have full translation to 22 languages. We have things like multi-currency support. We have multiple time zone support. We have multi-rate support. We have multi-payment support, so you can have payments in different currencies. All that's the easy part. The hard part is the legislative requirements in ERP that are required globally. Just because you do business on the cloud and just because you do business in Spain, just because you're in Spanish, that's not good enough.
That doesn't make you global. If you're doing it in Spain, you need to do VAT reports. If you do it in Italy, you need to have something called the Libro Giornale report for tax reporting. If you do business in China, you better have your golden tax ready. If you do business in Japan, you better understand the grounding rules for fixed asset depreciation. And if any of you want to know fixed asset depreciation grounding rules from Japan, I'm your guy. The reason why I say that is that those things don't happen overnight. The reason why we're able to leverage these is we did not start our cloud application build from a blank sheet of paper with a bunch of new developers. We had 20 years of E-Business Suite, PeopleSoft, J.D.
Edwards development teams, product, and customers that have guided us to what we need to do, how we need to do it. That's why claims, when you hear things from other competitors talking about they're global, it has to go beyond they're in different languages, and they support multiple time zones. It's an ongoing list of legislative requirements that, oh, by the way, change every year. You better have development teams, development staff to knows how to update those, find out those developments, and continually keep up with legislation on a global basis and service those on a global basis. Finally, we're just frankly more faster in terms of throughput. Last week, a competitor talked about being able to scale to up to 200 million journal lines a year. Our general ledger benchmarks at 200 million journal lines an hour. That's today in the cloud.
Again, that's not by accident. We had those programs built from our E-Business Suite product. When we built Fusion from the ground up, we did not start from a blank sheet of paper. We took best-in-class capabilities, best-in-class open technology, but then we leveraged learnings and programs from the past to start off with a highly scalable application in terms of breadth and country coverage, and also throughput scalability. That's what I mean when we talk about ERP. Broadest set of applications, deepest set of applications with a couple examples, and then most scalable. Let me go with a couple customer examples. First, here's a sampling of our customers that are just our ERP, just ERP in the cloud with some specifics.
One thing I'd like you to notice in the specifics is it's a global set of companies, it's a wide range set of company sizes, and the solutions they've chosen to start with in the cloud have varied, because that's one element that the breadth of applications gives us the benefit, that where the customer pain point is, we allow the customer to start at that pain point. Land O'Lakes, a large dairy foods producer, had the E-Business Suite, has the E-Business Suite, was formerly an Ariba customer. Chose to go with Oracle Procurement in the cloud, uses Procurement as an Ariba replacement, integrating into the back office and payables E-Business Suite on-premise. Old Mutual, a large financial institution in the bank, has a requirement for consolidations, eliminations.
Upgraded E-Business Suite to Release 12, used the financial accounting hub in Fusion in the cloud for high scalability and things around what's called average daily balances for a banking requirement specific for vertical. PNNL, Pacific Northwest National Laboratory. They're a pseudo government agency that does government contracts, government projects. That project billing capability I talked about, they get a budget from the government. They need to track what they spend and pass that back and billing to the government at a highly detailed level with very specific accounting. They use our project and portfolio management, Fusion, to do that capability. British Telecom, obviously a large telecommunication global company, uses governance risk and compliance to do their audit and their controls around their financials in a highly scalable fashion. O'Reilly Media leverage the product hub.
This is basically a master data management solution to their ERP to control their products. Keppel Energy. The last two are smaller companies, but I wanted to put them there as examples of companies that have gone full ERP. Not a coexist with something else, but really a full ERP end-to-end. Keppel Energy, a Singapore developer of power plants running end-to-end. This is a Microsoft Dynamics upgrade, end-to-end GL, AP, AR with Fusion in the cloud. Oasis Investment from Middle East, a large holding company, again, formerly on E-Business Suite ERP, full upgrade replacement, GL, AP, AR across their financials. That's just a sampling. Hopefully, you get a sense of the depth, the breadth, the scalability, and then customers across a multitude of industries around the world all taking advantage of different parts of the financials and ERP solutions.
With that, we've done ERP. Let me introduce Chris Leone, and Chris will cover HCM.
Good afternoon, everyone. It's great to be here. It's actually great to be at OpenWorld this year. I just like to look at it from the standpoint of where I was at last year. Last year, I think I had eight sessions at the conference. This year, we had so many HR and talent management customers that wanted to come and tell their story. We had a separate conference within a conference. Now that we have a separate conference within a conference, I only had one session, which has probably made the OpenWorld that much better for me. I'm going to go through a little bit around our strategy and overview. All of you here today certainly use an HR system, probably most of the time just to go look at your paycheck every couple weeks.
Let me go through a little bit more detail about what we're doing in the cloud, what our HCM systems are doing, and how they're differentiated. First, what is our strategy? Our strategy is really to transform human capital management, and we're doing that by delivering information-rich, socially embedded applications, unified HCM, and talent management. These applications are modern. They have a modern consumer-oriented user experience. Customers were blown away from what they saw from a UI perspective this year. It was probably one of the most exciting things that we were able to talk about. They also can have access to these applications anytime, anywhere. We deliver a full set of mobile applications, whether it's on a tablet or whether it's on the phone, and those applications can be disconnected.
Whether you're in the parking lot about to go in to see a customer or you're 30,000 feet in the air and you want to look at headcount or attrition reports on your iPad, you can absolutely do that with our applications. We have full global and industry depth across our applications, and I'll go into more detail around that. From day one, we've built in, engineered in business intelligence, not only for backward-looking processes, but predictive and forward-looking planning aspects as well, and I'll give you some details on that. We deliver it on top of an extremely robust platform that allows us to provide the extensibility that our customers need and demand, especially the largest and global customers, and the integration requirements that they need to integrate to their hundreds of downstream systems. Let me go into a little bit more detail.
First, we have the broadest and deepest suite of HCM and talent management cloud applications delivered as a service on the planet today. Nobody is as deep and as broad as we are in what we deliver. Those applications can scale down, and what I'd like to say is we have some customers that are smaller than 1,000 users. We have mid-market customers. We have a customer, Peach Aviation in Japan. They're the low-cost carrier of Japan. The Southwest Airlines of Japan. Has less than 1,000 users live on our core HCM systems. Then we have some of the largest companies in the world that are using our applications, over 100,000 users, like Schneider Electric, like UBS, like British Telecom, and I'll talk about them later. We can scale down, and we can scale all the way up.
We have a full suite from Core HR, Pay, and I'll go through more of these in detail, and a full talent management suite, including talent acquisition, recruiting, as well as learning. The platform is where we really begin to differentiate ourselves even more from the competition. Embedded in our platform, from day one, we delivered social capabilities injected into all of our major business areas. Every single business component in HR and talent management is what I call socially active. Whether it's a candidate, whether it's a recruiter, whether it's a benefit, whether it's a comp plan, whether it's a goal or performance document, all have social capabilities that change the way our users are interacting with their systems. I'll give you some examples of why that's different. The next area is BI. Again, day one, we delivered.
We changed the way our customers and our users are going to interact with their systems by delivering pervasive BI across every single screen, or virtually every single screen within our application. As you're interacting with the application, as you're about to perform a transaction, you have that extra bit of information that gives you a little bit more information about what you're about to do. We went beyond that. We baked in predictive capabilities. We looked at things like propensity to perform or propensity to attrit the organization. I'll talk about a little bit more of that later in the presentation. If you're going to sell to some of the largest companies in the world, like some of the ones I mentioned, you have to have extensibility that's designed into the applications.
If you look back on the applications that have been out there, on premise for a number of years, they're all customized. Customers have learned their lessons, but they've gone in, they've customized these applications to meet their specific business requirements. We engineered in a layered way to configure, personalize our applications at different layers of the stack, and everybody can still stay on the same code line, get the latest and greatest features, and continue to move forward in our SaaS fleet. We did it at different layers. We did it at the UI layer, so you can configure and personalize the UI. We did at the BI layer, you can configure and personalize business intelligence, your reports, add fields, do ad hoc analysis. We did at the application layer, so you can extend the applications, extend the business components. We went beyond that.
Thomas talked about Platform as a Service, where we're uniquely different and nobody else is doing this in the human capital management space, is we offer Platform as a Service capability, which means you can go now create a completely custom application in our Java Cloud and integrate that through our public APIs to a completely standard HCM and talent management solution, and they can run side by side. I will tell you, this helped us close one of the largest deals that we've closed. A customer came to us and they said, "We have this PeopleSoft application. It's called a holiday application. When is that coming?" I said, "Holiday application? I worked at PeopleSoft for a number of years, I'm not sure what that is." Their holiday application is they give a gift to every single boy and girl for all their employees every holiday season.
They had built that application in PeopleTools, and it's completely custom, but it had been there so long, they actually thought it was part of their PeopleSoft system. I said, "Well, we don't have a holiday application, and we're not building one, but what you can do is you can go to our platform as a service, and you can build your holiday application, and you can integrate it back into our systems, and keep HR and keep talent management upgrading on the latest releases on all the key features that they want to get, and still customize and keep them separate." That's the value of a platform as a service, and nobody's doing that in this space. Let me go through a little bit beyond getting your paycheck, everybody getting their paycheck every couple of weeks.
Let me go into a little bit more detail about what our Core HR applications do, and then I'll talk about talent management. Core HR is important. HR leaders, they want to spend more time being strategic within the organization and less time worrying about keeping up with compliance, less time worried about record keeping, less time just delivering basic HR capabilities to the business. With our modern HR solutions, we can do that. We have global capabilities that we've built in. We support 180 plus localizations today. We're translated into 29 different languages. We've gone beyond and delivered detailed statutory reports for 14 countries. That lowers the cost of ownership. We're extremely global.
We have capabilities like workforce management, where you can manage time and attendance, workforce rewards, where you can manage compensation, make sure you retain the right employees, manage your benefit plans. Workforce optimization, where not only do you have the ability to look at some of the predictive capabilities we have and predict people's propensity to attrit the organization, but you can plan your organization. If you're going to grow your organization in China, you want to start going more offshore, you can start to design that in before you deploy it in our planning applications, HR planning applications. We deliver insight through workforce analytics, and then social. Social is something that we didn't think about after we released our product. Social is not something that we put on the side of our product. Social is something that we delivered in context to every major business area.
Let me give you the example why that's so important. I love when our competitors talk about, "We got social. We're going to go out to some third-party social provider, and we're going to do social over there, and then you're going to integrate." That's like saying email is part of your HR application. It's a completely separate system. How a goals process might work today and what customers do and what I do with my team, is we send out a document that says, "Here are our goals for the next year. Here's what we're going to agree to," and there's a collaboration that goes on. My directs say, "That's a little bit too high," and I say, "No, it's not," and they say, "Yes, it is," and then we come to an agreement.
This is the goals that we're going to have for the next year. Traditionally, that's done in an offline email system. At the end of the year, my directs or your directs come back to me and say, "I really didn't agree to that goal. It was a little bit lower as far as I remember, and I have to go dig through my email system, and I have to find what happened." Completely changed. Now we deliver social in context to the goal process, in context to the performance process, and in context to the benefits process. I just can go to my discussion thread, I can see calendar year 2014 goals discussion, and it's right there. I have all the documents that were created and all the comments that were made, and it's right part of my system.
Very different, That's why we're thinking about social very differently. From a talent management perspective, The number one or two things that you hear most CEOs talk about is, "I need to build the best talent within my organization." It's mission critical. If I'm going to execute and be the best company, I need to have the best talent. You can't do that without the right systems in place. Systems enable you to build and grow and sustain the best talent. We have the broadest suite of talent management systems that are available today. Starts with recruiting and candidate sourcing, so we can find people, we can bring them on quickly, we can onboard them, we can get them productive. Learning and development. This is where I grow my employees and stay current on my compliance requirements. Full learning development cloud. Performance management and goal management.
This is where I define the goals that I want my organization to achieve, I cascade them throughout my business, I hold people accountable to achieving those goals. We have talent review. What's great about talent review is it's a calibration solution that allows you to calibrate across teams. Now I can see who's better across teams fully deployed today. Then succession management, how I build talent pools, how I create my next generation of leaders within my organization. All of that is delivered today. Where we're different, why we're unique, some of the key differentiators. The reason we're able to target and sell to some of the largest companies in the world that were here speaking at this conference, like UBS was here, like Siemens was here. Siemens was an old-time PeopleSoft customer, has now made the move.
They announced a press release to move to Fusion HCM, Payroll in the cloud. The reason that these large global multinationals want to go and see the value of going to the cloud is because of our global capabilities. I said, we're localized in 180 different countries. We're translated into 29 different languages, We deliver statutory reports into 14 different countries today, and continuing to build on top of that. Extremely broad. The user experience, incredible. One of the big takeaways you'll see if you look on Twitter, how great the user experience was at this conference, what customers saw, not only from a UI perspective, but from a mobile perspective. We do mobile different.
Not only do we support the mobile web, we support some great technology, Oracle ADF Mobile, but we built very unique applications that take advantage of some of the device side capabilities. Simple things like if I'm an employee and I want to make sure my picture's up in the organization chart, I can take a picture of myself or use a picture I have my phone and simply upload that to the cloud and have that as my picture. Again, taking advantage of some of the device side capabilities, delivering unique mobile experience. We're also broad and deep, talked about the breadth and depth that we have across all of these areas. A couple different things I want to talk about from an innovation perspective. I gave you the social innovation.
In fact, we were just awarded in HCM by Ventana Research 2013 Most Innovative HCM Technology, that just came out a month ago. We're innovating in social, but we've taken social to the next level. Some of the assets that came through the acquisition of Taleo were around talent acquisition. We've taken the recruiting process and made it social. We've introduced a concept called social sourcing. Social sourcing is fantastic. It allows you to leverage the social connections that your employees have outside of your organization, on Facebook, on LinkedIn, on Twitter, and create campaigns where your employees can help refer candidates into your organization that have a much higher hire rate. Social sourcing has been delivered and allowed us to re-engineer the talent acquisition process. We also just released in the latest release that we announced at this conference, something called reputation management.
Taking social and starting to look at the individual reputation of every employee, building up your reputation within the organization in a more formal way, and begin to think about how we can use that in the performance process, in the goals process, in building teams for new initiatives. Taking social, not just where we were yesterday, but where we're going to be tomorrow. From a BI perspective, we've innovated BI, delivered it pervasively in release one. Where we're different in BI is we have predictive built in, and we've continued to extend that. All of you, the majority of you have probably gone onto Amazon and experienced a kind of shopping store where Amazon predicts or gives you a recommendation as to which product you might want to buy.
It says, people like you in this particular age, in this particular geography, probably want to buy this book or these vitamins or whatever. We've taken those same front office concepts, leveraged the power of data mining in our database, the algorithms that we have, and we put a prediction engine into our core HR and HCM system. Now we can look at 130 different HR attributes that exist today. We capture that every single day, and we can start to predict the propensity of employees to attrit the organization. What that does is allows managers, it's usually not your rock stars, your 5s, it's your low 4s or your high 3s from a rating perspective, that you want to go and save and make sure that they stay within your organization.
We use front office techniques in the back office for the first time ever, that's delivered today in our solutions. Big data. I love when our competition talks about big data, and it's just an analytic solution. In order to talk about big data, you actually have to have big data. We have in beta right now, a big data solution around our recruiting assets. In recruiting, we have 400 million job applications that exist today. We're using that information to put benchmarks and best practices out to our user community so they can better target which sources are the best sources to hire from. Where geographically can I get the best yield or return from my hiring practices? That type of big data is what we're delivering. Let me go through customers.
We have over 7,000 HCM and talent management customers, over 12 million employees that are under or subscribing to this service, so extremely large business. Let me go through a number of customers. I have, I think three or four or five slides. First, Elizabeth Arden. Global beauty products producer, full HCM and talent management solution, was looking to get more pay for performance injected into their organization. BlackRock, a global investment management corporation. They were here speaking at the conference around their Core HR deployment. They're live and referenceable on Core HR and talent management. Really looking at some of the usability capabilities to get more traction within their organization. Hyatt, global operator of hotels. They streamlined their talent acquisition and performance management processes with our talent management cloud service. Herbalife. Herbalife, live, direct distributor of nutritional products, does business in 52 different countries, live on Core HR.
They were here talking to other customers about their experience, improved visibility, more automation into their systems, live and referenceable. Very great customer. Rogers, Canada's leading media company, live on our talent management suite of applications. Onboarding new candidates, having a referral process or campaign to bring new candidates in quickly, key part of their strategy. Standard Life, another great company here speaking at the conference. Standard Life, live on HR and talent management. Life insurance company. Wanted a fresh start, wanted to reinvent, modernize their HR systems. Skanska, multinational construction development leader. Again, full suite HR customer. Macy's, great story. Macy's is probably one of our largest customers, 175,000 employees, $27 billion in revenue. During the holiday season, they staff up. They add about 80,000 new people, employees, or temporary employees for the holiday season. Huge number of transactions.
Their transaction volume, I have 2 million here, it's actually getting closer to, they hit 3 million transactions in one particular day. Talent acquisition is a strategic product, a strategic process at Macy's. If they can't onboard 80,000 employees, they can't meet their holiday requirements, and so it's mission critical for them. We spend a lot of time with Macy's. When you have a recruiting product that needs to scale to this type of volumes, that's why what we have is the gold standard. Jackson Hewitt. Not a lot of people are familiar with our learning cloud. We have some very, very large deployments in learning. Jackson Hewitt, leader in full service. They do federal and state tax returns. Again, they scale up to 100,000 tax preparers every single year, and they have to provide training to all of those tax preparers. Again, 2 million transaction a single day.
Very large deployment of our learning cloud. A couple more. eBay. Everybody knows eBay. Talent acquisition customer, wanted to increase their referral process, wanted to get new candidates onboarded much more quickly. eBay's a customer. Michelin. In EMEA, they pay for training, making sure you're keeping your workforce fresh. Michelin rolled out our full learning cloud and had a payback in less than six months. Great story. One of our largest customers, British Telecom. Had an old, aging HR system, wasn't modern, didn't have some of the unique capabilities. I've talked about social and mobile and BI and predictive built in. They wanted a modern, new, SaaS-based solution, and they standardized on our human capital management and talent management services. Just a small set of customers here. Couldn't get through all of them.
We're going to actually go to a video here. I'm going to show you a few more customers, both mid-size and large customers. Many of them were here at the conference. Go ahead and let's roll the video.
It was a complete solution.
It was a very cost-effective option for us. It integrated nicely with the EBS system. It allowed us to free up internal resources to focus on other priorities.
What caught my eye with the HCM Cloud is the ease of access within the cloud system. We want to choose one system for all of our functions with Oracle. We were able to design a system which would be truly global.
Some vendors are very good at the different pieces of functionality, maybe talent management, maybe compensation. Very few had a complete solution.
The quality of what we're doing will go through the roof. That's pretty much where I went with Oracle and looking at best practices and things like that.
For us, I believe what was missing from the other vendors was that global capability. Really just that user-friendly aspect. Oracle HCM Cloud was the most user-friendly product that we looked at. We all fell in love when we saw the product.
The complete GUI, which has been transformed with the transaction BI, is phenomenal. I mean, that's what our users love.
For our users, it's very easy to use the Oracle HCM Cloud.
It's so user-friendly. It's so intuitive. It's so colorful. It's really fantastic, and we can't wait to be actually on release seven.
Oracle is also constantly improving the usability of the product, so the user is seeing the transformation that's occurring within the product line.
We've definitely seen a change in our organization. Our employees are reaching to their managers and pulling for information. They want to be informed. They want to make sure that they have the right focus, and they want to make sure that the company achieves its overall strategy. Oracle HCM Cloud is changing the way human resources does business at our company by enabling us to be more strategic.
It's helping us with our succession planning programs, mentorship programs, career development program for our employees. Globally, in real time, it helps us actually to have a much more analytical approach to take smarter decisions.
Herbalife has seen a lot of improvements since we implemented Oracle HCM Cloud. It's changed the culture.
We've definitely seen increased productivity. It's again allowed us to have that mobility to take the product with us, whether we're on the well site or in the office.
The Oracle HCM Cloud implementation took us 42 days from date of start. I think it's the fastest HCM Cloud implementation.
I spoke with our head of ICT in Muscat. We just make it happen in less than two months.
I mean, we have one of the fastest implementation, at least in UAE.
The integration between the E-Business Suite and the Oracle Cloud environment has been working extremely well. Eventually, we'd like to see ourselves in a full cloud environment.
We have got a foundation on E-Business. We ramped up on the PaaS application.
All the modules were integrated, we could integrate back with those E-Business and also a single sign-on.
To provide a way to integrate with our non-Oracle, our legacy applications, as well as with our mobile devices, with social media.
I would definitely recommend Oracle HCM Cloud to any company looking at it.
We've covered ERP, we've covered HCM, and now I'm going to bring Thomas back up to cover customer experience.
Just one point to note, every one of those customers was a Fusion Human Capital Management customer. Okay? None of them were Taleo customers. I know all of you have questions on how we're doing Fusion. Every one of those that you saw in the video is a Fusion Human Capital customer who's live. I'm going to close by talking about customer experience and what we're doing with it from a SaaS point of view. Our strategy for customer experience reflects the transformation we see in how customers want to interact with organizations. Customers want a very simple thing.
They want an integrated, engaging, highly personalized customer experience across every point of interaction that they have with an organization, across all the channels, mobile, web, social, contact center, point of sale that they have with the organization, and across all the people in the organization that they interact with, marketing, sales, service, online, commerce, et cetera. Our strategy is to deliver that on a common foundation, which provides a single representation of the customer and includes social, predictive analytics, integration, and extensibility. What does this product suite look like? Starting from the left and looking across, we give you the ability to build really rich websites using our content capability. You can excite customers with engaging online experiences.
If you want to put that on social media, we allow you to build that same engaging experience on social media, like Facebook, like Twitter, like Google+, and 32 other social media platforms globally. You can also listen to what people are saying about your products and services on social media. With our marketing automation solution, which is the leading marketing automation solution in the industry, you can push content out to people across all of these channels, web, mobile, social, in-store, et cetera. Most importantly, you can monitor exactly what those people are doing on all these platforms and build a unified profile of that user. We call that the digital body language. Why is that important? Because it allows you to feed them into two important systems.
If you're a B2C company, into a commerce system, so that the recommendation engine can personalize recommendation of products and services to them. If you're a B2B company, to a sales rep, so that they get the most highly qualified lead that's possible. Finally, customer service, allowing the organization's customer service people to support this customer because they know the entire history of the customer from the time they first saw that information to the purchase decision, to actually using it. All of this is built on one unified customer experience foundation, single data model, single mobile client, integrated social network, so that marketing, salespeople, service people, commerce people, all can collaborate together and service the company. There are four important sub-suites that I want to talk about. Marketing. The core of what we're trying to do is to enable two important things.
You start with customer segmentation, which is this digital body language about the user or prospect. You push multi-channel campaigns to them. You can deliver it to email, to social media, online, mobile ads, sponsored posts, et cetera, from a single marketing automation platform. You can then monitor what they're doing on social media or on all these platforms. If somebody goes and opens an email, you can correlate to what they're doing on Google Search. You can bring them into a lead nurturing and scoring system, pass them into the sales enablement platform, and then do loyalty if you want to give them a loyalty card, for example. Finally, measure the effectiveness of how you're reaching them. What's unique in three ways against the competitor? First, we have a unified marketing platform, not just an email marketing system and a separate web marketing system.
We have one marketing automation platform. Why is that useful? You send an email to somebody with some information, they go to a landing page on Google and search about your products and services. We can correlate who they are. They cannot. Number two, our marketing automation system includes a number of unique capabilities. Example number one, we have a loyalty management application. They do not. We have an integrated capability between our social platform and the marketing campaign, so you can be on the marketing canvas and launch a campaign and simultaneously push information to Twitter and Facebook concurrent to the launch of the campaign. They cannot. Lastly, our revenue performance management and analytics allows you to get to a big data platform where we collect 1.2 billion events every day. A unified view of the customer that no one else can give you.
That's number 1, marketing, and we're used by many of the people in the world, many of the big companies in the world, because they see us unifying this unified customer profile because we have single marketing automation solution across all channels. Sales. The notion of what sales force automation is changing. Sales force automation used to be about the bottom things. I give you a mechanism to do contact management. I then allow you to push in leads. You can run opportunity management, track a forecast, and then do quota management. We certainly do all of that, but what we do differently is help salespeople sell more product. Here's the way we do it. We give you the ability to have an install base that represents all of the products and services that a company has.
You can bring it in from ERP into the system. We have built-in customer data quality to get deduplication and clean customer data. You start with clean customer data. You have a built-in capability to do territory management. Why is that important? You can take your best people and put them on the best deals. You may ask, how do you find the best deals? We have the sales prediction capability, which is built into the system and uses our data mining algorithms to identify the most important sales opportunities that you may have based on patterns that the system is recognizing. Finally, most companies have third parties they sell with. We give you the ability as a salesperson to share leads with partners with built-in partner relationship management.
All of this is also complemented by all of the best-of-breed partners on our App Store. If you want to use our product and do incentive compensation, you can go to Xactly and Taleo and do that, or you can stay with our incentive compensation solution. If you want to use this platform, and you want to add in quoting and contract management, you can go to a variety of different quoting tools. We showed a number of these in our keynotes earlier this week. Third, customer service. What we do with customer service is allow you to solve three important problems. First one is to lower the cost of customer service. How do we do that? The most expensive way to service a customer is in a contact center by getting a phone call.
The lowest cost way of solving customer service is to let the customer find the information for themselves. What that comes from is knowledge management. We've got a best-in-class knowledge management solution. It's used by many of the largest companies in the world, to build knowledge repositories that people can then go online, search, and find the information themselves. Every one of you access many of the world's leading websites, Yahoo, Apple, et cetera, all of whom use us for knowledge management. Okay? Number two, the second thing we do is we unify knowledge management with the customer service experience across five important channels. You go online, and let's assume you're trying to buy something. We give you web customer service. You can answer questions, you can interact with a web agent.
If you're doing it on a mobile phone, we give you mobile self-service. You can do it without calling anybody in a contact center. Why is that? Because web is about $0.03 an interaction. A call is about $2 an interaction. Chat and co-browse. You're in the shopping cart now wanting to buy something, and it turns out that you are stuck. We can pop a click to chat in front of you and chat with you and resolve it. You don't have to go a separate chat vendor to get a chat solution. It's all built into the product. You can interact with them through email. We unify the interaction history across all these channels. Finally, we have two important capabilities that, particularly for companies in public sector and other systems, called case management and policy management.
Think about if you call your police system and you raise a contact center ticket with them, and it's a case because somebody took something from your home. There's a case associated with it, and you need a lifecycle management for that case. We are the only ones in the industry that provide that capability built into the contact center application, which is very important in a number of sectors. Finally, social. We have unified a social platform in two important ways. We give you social listening and engagement, the ability to monitor what people are saying about your products and services on the web, and then respond to them directly from your contact center. You don't even need to leave the contact center desktop. You can directly interact with them on Twitter or Facebook.
The reason is we want to help people be responsive to customers who are either happy or unhappy. You can also build brands on social media. You can market on social media. We have a social network that's built into the product suite and allows people to collaborate with one another in responding and helping customers. Then we're building the social profile of the user, which you can then use to market, sell, and service better. There are a number of differentiators. I want to talk about a few of them. We're the only ones who offer a full SaaS suite that supports B2C in addition to B2B. In B2C, the core business process is e-commerce. The competitors do not have such a capability. We do.
If you're a B2C company, and we'll show you a number of examples, it's a relatively easy decision on which vendor you're going to pick. B2C is at least half as big a market in the overall world, meaning it's at least the same size as B2B. Second, I said we've got a single multi-channel marketing platform. We don't have an email sending system and a separate system for marketing automation. We have a sales cloud that helps sales teams sell more. It's kind of important for a salesperson. We have a service cloud that lets you offer highly differentiated customer service at lower cost. We're the only ones who have integrated social marketing and social listening on one platform, one data model, one UI, one workflow. Why is that important? Well, it's important to lots of companies.
Here's a small list of those who use our Customer Experience cloud. Let's look at a few of them. IKEA, the retailer, uses Oracle's Customer Experience suite, commerce, social, service, marketing, to transform the way they are changing customer experience. I said we can do B2C and the competitor cannot. Here's an example. They don't have a sales team, so sales force automation is not as critical. Here's an example. KPN, a telecommunications company in Netherlands, uses our CX suite to build engaging customer experiences. They wanted an omni-channel experience across retail, online, and direct. Again, the competitor has a sales force automation solution. They don't have anything that runs in the retail environment. National Instruments, a manufacturing company, wanted a marketing cloud to integrate with their ERP system. We allow you to do that seamlessly, easy to use.
If you're asking, "Who do you have that's a pure play sales force automation company?" Here's an example. Worldpay. It's a large online payments provider. They migrated from the competitor to Oracle. They are live on Oracle Sales Cloud. TD Bank, a major financial institution in North America, uses our Customer Experience cloud to improve customer service. Vodafone, a giant telecommunications company, uses our commerce, service, and social solutions along with our industry applications to transform their entire business process around customers. The U.S. Army Training Command uses our Customer Experience cloud to support and market and help 1 million soldiers and civilians across 32 locations in 16 countries. Southwest Airlines, the most profitable U.S. airline, uses our Customer Experience and Social cloud to build a number of innovative customer experience programs. Three more.
PepsiCo, the largest consumer products company in the world, uses Oracle Social Cloud to both monitor social media and to build its brand on social media. Waste Management uses Oracle Service Cloud and our supply chain solutions. OfficeMax uses our commerce solution. A variety of different customers, different industries. Many of these are the biggest brand names, and you probably have a question. Are there any mid-market customers using Oracle Sales Cloud? Because that's where the competitor particularly made its mark, is selling to mid-market customers. We thought we'd show you a video of a small set of customers, subset of customers who are in the mid-market using our Sales Cloud. Please cue the video.
Moving to Oracle Sales Cloud was a fabulous decision for Chiro One.
Moving to Oracle Sales Cloud is probably one of the most significant change to our business.
The reason we chose Oracle Sales Cloud program over other competitors is that it was very versatile, very easy to use.
We selected the Oracle Marketing Cloud because it was a low-cost option, low-risk option, and gave us all the functionality that we were looking for from a new system platform. Choosing Oracle Sales Cloud was very easy for us because we are currently using JD Edwards as our ERP system and Oracle Business Intelligence.
I don't know if Oracle Sales Cloud could get any easier. For our initial users, it has been an easy adoption. Onboarding has just been a snap.
It offers a professional, complex, marketing system, which cover all needs and ties all various department needs together.
Management decision-making is much easier today.
The visualized reporting, ultimately customizable, from a management point of view, it's a fantastic tool.
Oracle Sales Cloud tools have helped establish a connected fabric, both within Applico and within our clients, to liberate and unify data.
The thing that probably tipped me for Oracle was all of the, in my own terms, back engine stuff that Oracle brings on. It struck me that Salesforce wasn't able to do that or do it as reliably for me.
Oracle Sales Cloud, as compared to Salesforce, provides a superior product in terms of giving us a system which is going to grow and scale with Applico as an organization. That's something which, when looking at Salesforce needs, which is what we were using previously, it did not give us the solution that we needed.
Oracle's architecture that they've built into Fusion CRM is one of the best that I've ever seen.
Partnering with Oracle is very important in regards to they have the latest modern technology.
You don't need to hire an army of technical people to do the work.
Oracle has really put in a lot of thought and a lot of effort into this product, and you can really tell. It just makes sense.
The cost of implementation is significantly less than you would see with a traditional ERP-type implementation.
The Outlook client is very good.
It's almost as easy as using a consumer app.
I have the application in my mobile phone, but I haven't really used it because it is so convenient to use it with iPad.
I can see lots of differences in my team. They are happy using Oracle Sales Cloud, and they are more productive, of course, and they are more motivated.
We need to look at a company that can provide all these options as we grow. Oracle is one of the company that we, IT, can rely on.
We are so happy with the experience, and we want other folks to know Sales Cloud and the team at Oracle are there to help you meet your business goals in the most efficient and fun way possible.
If you're looking for a sales force automation tool, go get Oracle Sales Cloud.
Every one of them was also a Fusion CRM customer. Let's just net this out. Oracle has a very strong new product cycle. We covered the areas that we get most questions about. We have a new database release. We have a new middleware release. We have new analytics release. We have a lot of new application releases. Those drive growth and revenue. Second, we have the world's best-engineered systems portfolio. Not only are we seeing strong growth in our existing products, Exadata, Exalogic, Exalytics, we're also delivering new applications on top of them, and we've also added to the product line with a number of new engineered systems. Third, a year ago, a competitor said that their in-memory database would replace us in a lot of customers.
Why would any customer switch their database to a new platform when you get a faster performant, more usable application with zero retraining on the same platform that you've been using for so many years? Lastly, a year ago, people questioned how committed we were to the cloud. The Oracle Public Cloud today runs more than 15,000 organizations with 21.5 million users doing 19 billion transactions every working day in 13 data centers around the world. If you ask the question specifically, how many of those users are Fusion users, we have nearly 2 million users using Fusion applications on the cloud. We said that we would be committed to delivering the best SaaS offering, combining ERP, CRM, and HR.
Not only have we had a lot of momentum with users picking up these applications, now we're complementing them with the platform and infrastructure, offering our customers a unique value proposition as the only cloud provider that unifies apps, platform, and infrastructure and gives you portability with the stack on your premise. We believe that over the last 12 months, we've accelerated our product innovation, and we've delivered a lot of new capability into the customer base, and we've seen at this OpenWorld the enormous interest and excitement our customers have with these products. With that, thank you once again for your time. We'll take a 10-minute, 15-minute break, and then we will have you back to hear from some of these customers. Thank you.
Ladies and gentlemen, we will reconvene our meeting shortly. Please take your seats.
Okay. Ready to be back. Every time I see those videos, I get pumped up. You cannot get excited seeing a boat essentially fly on water. It's absolutely crazy and amazing what they've done with the America's Cup. We'll look forward to speaking with Larry a little bit about that later. As I mentioned to you earlier, we took your feedback from last year. We modified the schedule a little bit and the agenda. This time, we heard a lot of feedback last year. Let's hear more of the voice of the customer. What we're going to do now is Bob Evans is our Chief Communication Officer, and Bob is going to be leading a discussion with three leading CIOs. We've got Mark Franciosa with Praxair, Andy Brown with UBS, and then Dan Drawbaugh with the University of Pittsburgh Medical Center.
They'll be coming up and talking to you about their experiences in working with Oracle and Oracle technology. With that, gentlemen, please welcome to the stage.
Hey. Good afternoon, everyone. Thank you for being here. As Ken said, this voice of the customer is going to come through pretty loud and clear here. We're going to jump right into this here with some of the questions. Mark, can I start with you? Would you tell us briefly about some of the history of Praxair, but especially when you and I had talked, you described that the way the company operates and sort of its outlook now is quite different than it was a few years ago. What's made that happen?
It's interesting. Our company, our core business model and business strategy hasn't really changed over the last few years. We're an industrial gases company. We're fairly capital intensive. We put a plant in the ground, we separate the atmosphere, we push it either through a pipeline, we push it into a truck, and then deliver it over the road, or we turn it into a gas and put it in a cylinder and sell the cylinder. As we grew up as a global company, kind of a series of regional companies.
Right.
Those companies owned everything from top line all the way through to their infrastructure, their application stack. Coming into the role, have a really successful company. We've grown fairly well over the number of years. We lead the industrial space that we're in. Breaking out and looking for opportunities, we started transforming the way we operated and started looking at how do we use the Oracle products and enable the business in a more global fashion.
Okay. Yeah, thanks. Just thinking of it here with financial services and healthcare and with what Mark's company does, we have health, wealth, and atmosphere represented up here. Oracle covers the range of things.
Yeah.
Mark, thanks for that background on that. Dan, in the healthcare business and some of the things you're doing at UPMC, would you mention, I think, that point about unlocking the secrets of human health and how that's changed really where your whole $11 billion organization is headed?
Yeah. It's just fascinating right now with the breakthroughs in genetic sequencing, the cost coming down so low where all of us will be having our genetic sequence done, comparing that, integrating or intersecting that information with what we call the phenotype data, so the clinical data. Looking at across the organization at the phenotype and genotype data is going to revolutionize in finding cures for diseases. It's very fascinating right now and fast-moving, fast-paced.
Dan, it's sort of collapsing that space that just a small number of years ago, that was the pharma industry over there.
It's flipped it around now to where what had been a traditional academic research institution is doing really the work that's come from a very different industry.
Yeah. That's very true, Bob, and IT's become center-
Yeah
for UPMC and across healthcare as a whole. Mark is sitting over there and was kind enough to visit with us, and it was a fascinating discussion with our CEO. In fact, Mark was responsible. One of the directives now I've received as CIO is UPMC is very focused on rebasing our entire revenues around IT.
Okay.
It's strategic for us, very strategic.
Is that something you would've thought about two years ago?
No. Two years ago, we were focused on the implementation of the electronic health record.
Right
and hitting Meaningful Use guidelines. That's where our focus was, and we undertook a $100 million analytics initiative across the enterprise, and that's been the driver and focus for us now.
Yeah. Andy, certainly in the financial services field, something that our audience knows pretty well, but one of the things that was interesting that you described was this notion of the industrialization almost of your industry. How is that happening, and what's the role that technology is playing there?
Well, I think a lot of cost has been taken out of the industry, particularly since 2008. Generally, that's been taken out within silos. What's happening right now is people are starting to look at process automation in quite a similar way to when I worked in the oil industry, actually, in that the inefficiencies associated with processes that don't run straight through is no longer going to work in the new cost structure that we have to run in. You've seen probably almost every financial services sell-side company come out with cost targets for the end of 2015, which are extraordinarily aggressive. We're actually, I think, one of the few companies that's come out and said we're going to use industrialization and a supply chain model, essentially, to change the way we work.
Wow.
That has to be process-driven, and it has to be top-down, and it is being driven from the board all the way down into the organization. I mean, clearly technology has a massive role to play there. The couple of things that we've done with Oracle that I think are changing the game for us are the HCM decision that we made and also moving to Oracle Database as a Service and changing the way we do everything, provision databases, run databases, manage end of life, and so on. The harder you look into those processes, the more you realize how much inefficiency is buried within them, so you start measuring different things. A number of database instances per application turns out to be one of the most important measures that we've learned.
Seems obvious probably to everyone in the audience, inefficient development environments can lead to ratios in the 8 to 9 range.
Yeah.
Very good ones are probably in the 3 to 4 range. What we're doing with Database as a Service essentially is we can turn them up when they're needed and turn them down when they're not. That is enabling us to go from somewhere in the 9,000 live database range to something around 4,000, 5,000-
Okay
something like that.
Andy, one of the things these days, especially as you described the whole issue of cost and pulling that out of the organization there, these days, there seems to be sometimes a trade-off when you look at technology. Some people believe, "I can get better performance, or I can get lower cost." Are you seeing something different, especially with Database as a Service?
I think the way to think about it probably is that in most organizations, infrastructure cost breaks down into three buckets. There's fixed costs, things like data center depreciation, things like that. There's human cost, and then there's everything else, so software depreciation, pass-through services like mobile costs, like that. When you think about those things, I believe in the next three years, all three of those buckets are going to have to be attacked by the people who have essentially laid out what financial outcome they want to achieve by the end of 2015. What does that mean? That means you've really got to start looking at using technology as a strategic enabler for automation to stop hands touching processes that don't need to touch them and fully electronically automate them. That's why I used the supply chain term before.
Yeah.
There is another important kind of consequence of that, though, I think, which is the fixed cost piece, which has traditionally been viewed as an untouchable item, is going to change. The software-defined data center is going to move us to a world where asset-defined data centers and the cost of those assets no longer have to be borne by the enterprise and instead become more of a real estate investment strategy, I think, not necessarily for enterprises who aren't in the real estate investment business either.
Okay.
I'm expecting to see a big change there, too.
All right. Fascinating overview of where things are headed. Safra this morning talked about that there are some companies that are lining up more behind this range of things that Oracle's doing across the board. As you talked about the business transformation that's occurred at your company over the last five years, that seemed to be very much a part of the Praxair strategy.
Yeah. When we look across the services we provide, we look at the traditional transactional processes from the GL out, procurement, the financial transactions. We've moved well into the supply chain, the manufacturing, the distribution piece of our business. It's imperative for us to understand, for example, where all of our trucks are in real time, and to do correlation on a bunch of events that we wouldn't normally do or we wouldn't have done historically. It's important, when trucks came back and historically we'd look at the data out of their black boxes, onboard computers, and we'd be able to interrogate a number of those items. Now we apply a lot of analytics, so we look at, well, if the windshield wipers went on, did the driver reduce speed? If those two events aren't correlated, we'll alarm the cab
Okay
and say, "The wipers are on, it's obviously raining. You need to slow down.
Yeah.
That's a real-time action that we can take, or we can apply analytics up front to say, using a recent example, Superstorm Sandy coming up the East Coast. We know power is one of our biggest raw materials other than the atmosphere. We don't want to be in a position where a big storm will have an impact on the power grid. Now we can't operate the plant, or there'll be a lot of destruction in the path of the storm and we can't deliver product. We've used things like telemetry and mapping that so we understand consumption rates of our customers
Yeah
our larger customers.
Yeah.
We map that to other external events like weather maps, like power consumption or power pricing. We will deliver when we can either predict that there'll be a clear path out or that we know that the customer will need product. We don't wait for them to pick a phone up or to log into a website and place an order.
Whereas maybe in the past, technology was a history book where it told you.
Yes
what happened, now you're using it to see what's coming.
Yeah
be better prepared, more intelligent. Yeah. The one other thing, Mark, that too, you talked about too, that this is creating not just efficiency, but real barriers to entry. Some of the things you said you're doing is going to enable you in a very competitive marketplace to do things that your competitors cannot do.
Yes. In certain industries or in certain geographies, some of our industries are highly regulated. For example, in the medical oxygen space, in a number of parts of the world, it's treated like a drug. We do need full traceability. We need the ability to recall by lot number, batch number. What we've been able to do is build some systems that allow us to not only track the entire manufacturing cycle, but all the way out to distribution and back, that no human intervention, you're not writing slips down, handing out deliveries tickets. That causes us to have a competitive advantage and a higher cost of entry to a local competitor that might come in and not have those services. Now we're extending that into their supply chain or into their operations.
If you think about a large hospital complex or a large electronics company, they can now move cylinders around on our platform. We get a better visibility on their usage patterns. We understand their consumption rates in ways that we would never have been able to do that before.
Yeah. Andy, interesting how both Praxair and you had talked about this supply chain idea, and also you talked about too with the HCM initiative that I think Mark had cited a couple of quarters ago. Where is that helping out now with what you're doing at UBS? How are you using that HCM application?
I think, in many of the [VIP] applications that people have done in the past, there has been this temptation to customize.
We were definitely tempted, and we definitely customized. We actually had the guy running the project was at an investment dinner last night. A few people in the room were there. He was talking about the difference between, from a business perspective, having a conversation about which standard processes you use, back to the supply chain discussion again, it's like a set of standard processes versus how do you morph the platform to deal with the way you currently do business.
Okay.
We've really industrialized HR as one of the first functions that we've done. Moving to an HR service center, moving all of the low-value transactions into the service center, and essentially now building out a platform to support much, much greater industrialization of HR. HCM is a massive piece of how to do that. Clearly, if you're a Swiss bank, security is one of the biggest issues you've got to cope with. I think similarly for both my partners on stage here as well. Oracle was able to step up and provide a security solution that we were very comfortable with.
Yeah. Could you mention, too, if there are a couple differentiators among other options you looked at, where did Oracle stand out from the rest of the crowd?
Well, obviously, given the install base that we had on PeopleSoft, the migration was actually easier or is easier. The second thing I would say is that the security was definitely a part of that discussion. The hosting location was also part of that discussion as well. Again, European companies like European-hosted platforms as well. There were probably seven or eight things. I actually ran that analysis. Those three are probably the main three.
Okay. Thanks, Andy. I'm going to ask each of the panelists another question or so, and then we're going to open up in a few minutes to you folks. Dan, could I ask you, if we turn the clock back, I don't know, eight, 10 years when at UPMC you first had the notion that you had to sort of redo the architecture end to end, and you struck quite a landmark deal with IBM that scaled all the way up to a venture fund co-funded by UPMC and IBM. This was a long-term strategic deal, but more recently, you've made a shift in who you think some of the infrastructure for the future is going to be for UPMC.
Yeah. I think the big shift occurred with the analytics initiative. It was, I'll say, called a competition.
Yeah
Between Oracle and IBM. Oracle came out as a clear favorite. The Omics Data Bank was a differentiating product, Cohort Explorer, your approach, much different approach than your competitors. That was the start of some of the changes. We took a look at, and Exadata was part of that initiative. We quickly saw across our health plan, we were having processing issues on the revenue cycle side, primarily with estimating the claims payments.
Had a 24-hour processing time, went into pilot with Exadata, reduced it from 24 hours down to six hours, basically providing the financial team an additional hour of estimating those claims payments. Across the board, four-to-one compression difference that we saw. The option was to retool when we were using Informatica and the IBM solutions. Just the hardware and software engineering was superior. That was the first move. The second move was on the clinical side.
Right.
We were on a product called Epic in our physician practice area. We have 3,400 employed physicians. Again, with that area, with the data warehouse, substantial improvement with a product called Clarity. It's all based upon the performance and the execution, and we're seeing tremendous success with you.
Yeah. I think I thought of some of the work you've done, particularly when Juan Loaiza was describing that notion. Some companies picking Exadata and saying, "Give us your toughest, hairiest business problem. If we can fix that for you" almost like the foot's in the door there, and you've been finding success with Exadata-
Right
in other parts of the organization.
Right.
Yeah. Andy, you had mentioned that with the Database as a Service product, that there was an interesting combination in there of Exadata and Nimbula that had done good things for you.
Well, with the Exadata implementation we did originally, we did throw it into our hardest problem.
Okay.
It solved a problem that nothing else could solve at that time. With the implementation that I talked about earlier on, we're currently in pilot. We've done 100 migrations at this point, we are very excited, I think, by the performance. The compression is very impressive. The fact that it can almost be run as a black box, I think, is also important. Back to the points I made before about automation and industrialization, you've essentially taken three skill sets around networking, system admin, and DBA, All of those are essentially now combined and significantly reduced in terms of the amount of people that you need to manage. It's actually also changing data center architecture and network architecture at the same time, because each box essentially is a virtual data center in its own right.
Now you need a completely different interconnect model between the platforms your apps are running in and the platform that's hosting your databases in terms of speed, so you don't lose latency or speed between those. Clearly, where Oracle's headed in the future, is towards us being able to co-host or sit alongside other components of the application infrastructure and potentially even the apps as well.
Okay.
Which is very exciting in terms of speed.
Yeah.
I think that's really the feedback. One other point, just on the development side is just that the speed in dev environments has traditionally been poor because development servers are not specced at anything like what production is. We're actually seeing an increase in productivity for developers, not just through the provisioning and deprovisioning, but just the speed of the platform. Running scripts that run 15, 20 times faster than they used to-
Yeah
is an amazing thing if you're a developer, so.
At this point of the industrialization move that you mentioned, more and more that's going to happen. That's, again, a competitive differentiator.
Well, a lot of people I don't think really think about if you've got a change budget that's $1.25 billion and you save 20% in productivity-
Yeah
you've essentially added that 20% back into the change that you can run over and above what you could run before. people have been looking for efficiencies in infrastructure forever, but this is a way actually of going after efficiency on the SDLC development side, which is great, actually.
Mark, one of the things, too, that you and I had talked about some, and it's interesting today. Mark Hurd talks about this some, that he said, "Is it time for the technology industry to take some of the burden off of customers, do more of the engineering and integration work on the vendor side rather than having the customers have to spend so much time, and money, and effort gluing things together?" I think from some of what you've said, Mark, you found that that's become a particular business advantage for Praxair.
Yeah, absolutely. Even as Andy was describing it, when we looked at our environments and I described the kind of disparate architecture and data center strategy that we had historically. We were one of the first, if not the first JD Edwards customer to run on the Exadata stack. it was important for us to be able to scale up quickly and not have to do all of that architecture. historically, we would have looked at a best-in-breed stack, not only in the application space, but all the way down. we picked the best hardware to run, maybe play with the operating system, and is it Wintel versus Unix? now all of that largely goes away. The stacks run.
We still have a lot of legacy applications around, we've seen Exadata and the tech stack actually enable that through things like GoldenGate, where we replicate our data real time off the ODB or off the Oracle tech stack down to some of our other legacy apps. we had to do very little to enable that. That was out of the environment as we stood that up. We've now grown that out horizontally, so through the Exadata platform, and we're using Exalytics to help enable some of the real-time analytics that I was talking about before.
Right.
Both in-memory analytics and just the speed of the platform and not having to engineer, whether it's the networking between all the different components or how it interoperates, has been a huge cost-saving for us.
Okay. Yeah.
Can I add one thing to that?
Sure.
One thing that I think people don't really understand in terms of cost is how complex infrastructures can drive costs through the roof and drive supportability down. I would say that in an average enterprise, and certainly we're no different than the average of our size, you're going to see something like 500-1,000 different configurations just at the hardware, OS, and database layer. The reason for that is just because purchase cycles don't run annually. They run almost on a week-to-week basis as projects start, business cases get approved.
Yeah.
Best in class kind of changes from one week to the next. One of the other advantages I see of Exadata is you're going to end up with something like maybe three or four versions that are running, the ones that maybe are five years old and the ones that are new and the ones that are in that two to three-year range. Just having done projects like that in the past in other areas of the stack, like Cisco IOS, for example, the other Cisco IOS, the Cisco version, you see huge opportunity to take out cost in how you engineer and how you support. More importantly, the integration that you are doing between app servers and databases, you don't have to back test against literally hundreds of configurations.
Yeah.
Maybe for the financial analysts in the room, they don't see that, and I think it's important to understand that.
Yeah. Good point. Ken, we're going to open it up to questions from the audience. First in the back, Jason.
Hey, guys. Good afternoon. I've got a couple questions. Maybe Dan and Andy, you can hit on this since you were talking about Exadata, what are the type of cost savings are you seeing when you do consolidations like this? If you could speak to that. As you look out forward, Andy, I think you said something like eight or 9,000 production database servers.
I didn't say production, keep going.
Okay. 8,000 test dev, whatever. What do you think about in terms of consolidation opportunities to roll Exa through that install base, is that something that you're looking at and actively considering, does that give you some of the same cost savings compared to some of these hairy problems that you've tackled?
The first thing to say is that in our industry, the opportunity to consolidate is going in the reverse direction to centralization. The reason for that is because of the credit crisis, jurisdictions deciding to take control over where apps are hosted and where data is hosted for people within that jurisdiction. You've actually got to come up with a model that allows you to get the best possible consolidation in Monaco and a model that gives you the best consolidation in New York, London, Zurich, Hong Kong, and Singapore. We've actually built a really quite nice combo model with Oracle, where we're able to scale from very small branch infrastructures all the way up to massive campuses or central site locations like London and Zurich. The consolidation percentage is huge.
Just in terms of number of moving parts, you're going from tens of thousands down to hundreds. That's a big deal, first of all. The second thing is that the integration test thing that I mentioned before, you almost don't have to do at a point.
Yeah.
Once you're confident that the platform itself has been engineered correctly by Oracle, you stop doing that kind of testing. Right? Always when there are new releases, you have to do that, whether it's the hardware, the firmware, the OS, the database, whatever it is, you've got to do that testing a few times. Once you're through that, all of a sudden you're starting to get a real peace benefit, if you like, of not having to keep moving the dial every time you go buy a new piece of infrastructure.
Exactly.
I think that's important.
I like that. There's a peace benefit. That's a good one. We'll go with that. Next question. Got one here.
Bob, if I could just comment.
Yeah, please
on Jason's question. One thing, Jason, on the healthcare side, it's interesting, we're seeing, I went through the numbers, 70% reduction on processing time, 70-some % reduction in the operator side. Where we're seeing and anticipate seeing the big difference is actually on the clinical and operating side. You look at some of the results that come out of, let's just take Epic, okay, on the clinical decision support side. You're waiting till the next day to make decisions on, let's say something like discharging a patient, waiting for the processing to occur to know if that patient should leave the hospital today. We're seeing that. On the front end with Exadata, we believe we'll see a major operational benefit as we introduce this technology into the workflow, into the work stream.
Thanks.
I just want to add one further thing, sorry. The other benefit that I was going to get to is actually in the complexity of how you design data centers. If you think about fiber channel, separate storage pools, how many network switch ports you need to connect all the legacy servers together, you start designing data centers in a completely different way, much more like the way IO thinks about a data center than the way enterprises like ours have traditionally designed them. That has a big impact on which vendors you spend money with and how you design. That was the other point I was going to make.
Great. No, thank you.
Hi, Andy.
Yes.
[Good Morning]. Thank you very much for being here today and sharing your time. My question is, what does Oracle and Oracle-related spend represent as a % of your overall IT budget? How do you think about weighing the risk or concentration risk versus the benefits of a single throat to choke in integrated solutions?
Mark, can we start with you and we'll come across?
Yeah. If I actually look at it, and I'll answer maybe in a bit of a different way. If I look at our Oracle spend over the last, say, 5 years, it's increased dramatically. What it's allowed us to do is focus on the benefits that we're going to get from the overall stack, the engineered systems all the way up through the applications, and not have to spend our money architecting, doing all the plumbing, if you want to call it, getting all the design work done. We're seeing a fairly significant benefit in areas outside of the Oracle stack. While it's a growing percentage of our spend, and of our overall cost stack, we're seeing significant benefits outside of it.
As far as kind of single throat to choke or a single person to drink champagne with, when we're on the deployments. I actually see quite a big benefit to that because, I come from a different organization that used a competitor product and didn't own the entire stack. We had a lot of people that were really good at figuring out IO ports, network design, as Andy was describing, the data center design. We've gone through this fairly large transformation, and in the core infrastructure ops staff, we haven't increased heads at all in that space, and we're actually taking heads out around the world that have run all these disparate systems.
To me, it's actually a much better design model and kind of relationship than having to have relationships with 5 or different major vendors and getting them all together when we have some conflict or configuration challenges. Now it's a much easier discussion point.
Yeah. Andy, how about you?
I think you need to use the Elon Musk version of cost analysis to actually look at the answer to your question. If you look at the fully loaded cost, including not buying gas of his cars, it is very different than if you look at the cost including gas. The same is true with Oracle. If you look at the cost of running Oracle environments, has Oracle's percentage of spend of that total gone up significantly as a result of the project we are doing? Absolutely. Is the total cost going down dramatically? Absolutely as well. I think the point here is that the accountability for the success of Oracle in the enterprise did not rest with one person or one team in the old world. That accountability was shared across networks, sys admin, Oracle DBAs, database guys, data center guys as well.
Now that responsibility has moved. The one throat to choke outcome, is important in the context that now a lot of work that used to get done isn't needed anymore. Instead, people are focusing on how do they use the application products to deliver value to the business, rather than how do I debug X, Y, or Z. I think, the only way actually to take the cost down significantly is to go to a utility model. A utility model where the vendor is taking accountability for the whole stack is both a blessing and a curse, right? The blessing is that you've reduced all of your integration costs and everything else. The curse is that you're quite locked in. I think that's the pro and the con of doing it. Overall, from a cost perspective, it's the right thing to do.
Our IT budget is about $350 million a year. Oracle has consistently been in the top 10. Over the last three years, though, there's been a movement within our organization to more and more of Oracle's products. I'll give you an example that happened over the last probably eight months. Within our financial area, I think many of you are familiar, healthcare, with the changes from fee-for-service , to now where cost accounting is a major initiative and organizations want to move that way. Our CFO, with Hyperion, development there around the cost accounting module that we feel, actually feel in our, in discussions with Oracle around partnering to go after that market on a national basis built on Hyperion. We made a decision two years ago to move to Oracle's security products, outstanding products.
Again, on a, the way we think of it, excellent products, we want to customize it a little bit to our vertical to healthcare. Take identity management within the healthcare environment around privacy, some major issues there. We've found it very easy to work with Oracle, their suite of products can continue. I think their acquisition strategy has been very sound, we continue to grow with them as a vendor.
Great. Thanks. Next, question, who?
Kash with Merrill Lynch. I'm curious for your thoughts on Oracle Database 12c multi-tenant option, how broadly or narrowly applicable would that be in your database environments? Also the in-memory option that Oracle's been talking about. What are your early thoughts on that? Thank you.
Anybody working with those? Oracle Database 12c again, or Mark?
Please.
I'll take it. Sure. I think what was announced this week is great news for existing customers who've already made the kind of investments that we just talked about. The point I raised earlier is the important one, and that is every time you go through a version change, something changes, and your applications may or may not be written to deal with that change, whether it's the order that rows come back in or whatever it is. I think probably for the first five or six, again, you're going to be very careful. The next 20, you're going to be fairly careful, and then you're going to be fairly clear on how you're going to do the migrations. One of the things we've done with Oracle in the project I mentioned earlier on is also set up a migration factory with a very competent vendor.
As soon as those vendors get trained on how to do the specifics of the 12 implementations, I can't see any reason why we wouldn't do it. The in-memory option clearly is, from a performance perspective, going to be different from one platform to the next, just like every other performance improvement since 5.1.22, which is the first version I ever worked on. Again, performance comes at a price, right? You've got to optimize code a different way. You've now optimized the relationship between data and CPU a different way. You've got to do the testing properly. I think it's exciting and it's differentiating if it delivers what we heard this week.
Okay.
I'm just going to add.
Please
Now that we're on the stack and moving more of our apps into an Oracle Database into the Exadata racks, the upgrades for us should become much easier.
Yeah.
Before our big upgrades, we would plan out across all of the different application architectures we had, all the different platforms that we had, what investment cycle we bought them on. What may have been on Unix versus what would've been on Wintel. I see a much more straightforward upgrade path for us, even in the on-prem space versus being able to use both an on-prem model and use a cloud service and have the workload balance across those two. The same with in-memory. There's a lot of applications, certainly for transactional and manufacturing-intensive business, where we're collecting a lot of data points off of all of our plants around the world.
Yeah
where that would be a huge advantage to understand things that might be going wrong in a plant very quickly, and take corrective action while not having to do that transactionally down in the stack and then bring it back up.
Right. Okay, thanks. We've got time for one more question. Was that Dana, did we have somebody?
No, in the back.
In the back, gentleman here. Thanks.
Thanks. Trip Chowdhry, Global Equities Research. I think this Oracle world was the most exciting conference that I've attended over the last 10 years, especially for the technology-inclined audience. I was wondering, on Monday, which technology you could just open and pay for it, like open the purchase order, approve it, and get started, because we had a lot of stuff happening this time.
I'm just the moderator.
Did our key account team ask you to ask that question?
There's a puppeteer up there, I see.
That's Trip. Yeah, there was some remarkable stuff announced this week, no question. I think, in the interest of time here, we're going to move along. I would like to thank our panelists. You guys have been terrific. Dan and Andy and Mark, thank you so much for being here, and thanks to all of you for coming today.
All right. Very good. We're now in that home stretch, turning around marker 4, headed for the finish line. We'll take a quick 10-minute break. Please come on back. We'll have Safra and Mark up on stage for Q&A. Then after that, we'll meet with Larry. Thank you all.
Incredible. Incredible. How a boat flies on water at three times the speed of the wind is beyond me. That is absolutely incredible. Now, as you recall, we had an earnings call just about a week ago, we're going to do a little bit of Q&A here with Mark and Safra, then what we're going to do is, Larry's on his way en route, very excited. We're not going to be able to get the boat through the door. Those of you who were thinking it was coming in, I'm sorry to disappoint, nonetheless, Larry will be here, very excited. We'll get out of the way, and why don't we do a few questions?
You pick.
I'm surprised there are any questions. We just did this. You want to do it again, Rick? You just asked a question a week ago. All right. Is it a good question, Rick? We're looking for
Indian sellers in the great capital
thoughtful, insightful, responsive.
He's coming around.
Hey, Michael, how are you?
Thank you.
Good to see you.
If you could talk a little bit about the in-memory. How are you going to price it? How excited the sales force would be around this product? Also, does it drive your engineered systems?
Does it drive what?
Engineered Systems.
Engineered Systems.
That's the hardware.
Let me write that down.
Rick, I'm telling you're pushing it. I asked you already. I gave you an opening. You told me you're going to be on your best behavior.
The business intelligence analytics seems to go nicely with in-memory. If you could just sort of talk about your salespeople have a lot more to sell now, and it seems like it could pull along other products. How are you going to price it, and how optimistic are you about us seeing that in the numbers for the next couple of quarters?
I'm not sure I'm going to tell you much about any of that, really. You've got Mr. Ellison coming soon, and he can tell you about in-memory. Pricing-wise.
You're going to have to pay for it.
We're proud of it. I think S alesforce is excited. Listen, 12c, and in-memory particularly, adds a ton of performance. We gave you algorithms. I can't remember what Juan's improvement in his performance on that Wiki? What was it? How many billion? 1,300.
1,300 times faster, which is a little bit faster.
Seems faster. Good news, we're not charging 1,300 times the database price. I think, listen, I think Salesforce is.
Somewhere in between that.
Salesforce is excited. You wouldn't want me to tell you anything else, and I think it's a great product, and you'll see us ripple it through the user base.
Hi, Kash Rangan than Merrill Lynch.
Hi, Kash.
Hi, Mark. Wondering if you could talk about the sales reorganization. You've gone through product specialty. How far are you along with respect to having a fully productive HCM sales force that can win big deals against big competitors and the likes? Thank you.
Against little competitors.
Yeah. Which ones you want, big competitors or little competitors? You started with the reorganization. This year, we've reorganized absolutely nothing. We reorganized the sales force over a year ago. I want to reiterate because it seems to come up a lot. Going into this year, we changed really, almost no territories. We did all of our territory planning in Q4. We did all of our quota deployment in Q4, and by June seven, eight, nine, 95% of our sales force had a territory, had a quota, had a boss. Very minimal change to virtually anything in the sales organization this year and in Q1. Now, in HCM, our distribution has increased materially, both on the phone and in the field.
I'd say with a combination of the product releases, with what we've seen in release six and what we'll see in release seven of HCM, we have a sales force that's on the attack, believes it can win virtually every deal. We are winning, we've been pretty clear about this, more than half the deals in this country, and materially more than that outside this country. Now, the competitor changes a bit when you get outside the U.S. We do see more of a bigger competitor in HCM outside the U.S. than we do here in the U.S. The competitive position changes a bit.
Hi, I'm Michael Turits from Raymond James. Safra, in the past, your comment about the impact on the financial model of a move to cloud has been, among other things, that it wasn't large enough relative to so much else that's out there to impact it, but cloud has come a really long way. Your CapEx is still very low. Are we at the point now where it is going to start to make a difference, where we'll start seeing an incremental change? Obviously, we have the example of Microsoft in front of us with them having raised their CapEx. Will we see a change at some point as it gets more material?
Us and Microsoft are two very different companies. You have to understand that we've been running people systems now for years. We have an immense amount of experience, as well as economies of scale. As a result, the marginal amount of capital expenditure will be more than overwhelmed by the increased revenues. I don't expect our margins to decrease, and I actually think that we're going to continue to get a lot of leverage. If you're thinking, I'm going to come back in six months and tell you it's $1 billion more CapEx than last year, or I think that's what Microsoft originally announced. You shouldn't expect that, because that's not going to be necessary. Remember, we make all our own hardware and all our own software, and we've got incredibly efficient systems with enormous performance advantages over everybody else.
For us, we can run many systems more economically than our competitors.
I'd also supplement that on the OpEx side. We've added a lot of sales resource that's out selling ARR, annual recurring revenue. As you see our margins go up, that cloud sales force is well deployed now, and it takes a couple to three years to get that to the equivalent productivity, in some cases, maybe three and a half, of what you would see in a traditional licensed sales force. We've done that hiring up within the context of the margins that you've seen us deliver over the past several quarters.
Ryan Molins from Barclays. Mark, a quick question. In the room here, we talk about the smaller SaaS vendors, and obviously, they're a noise for you, but the big battle for you in five, 10 years' time are going to be the big vendors. Can you help us a little bit understand how you position the Salesforce more towards the big strategic battles you will have with the Big Blues, with our friends from Germany, et cetera?
Who was that?
Sorry, as a German, I can see.
It was like SAP.
It was SAP. They got to start working on something, though.
Yeah.
Yeah. They're moving.
He gave them 10 years to do it, though.
10 years, I think that's tough.
By then, we will be pretty far ahead.
To get going in 10 years, they'd have to start soon.
Soon.
Yeah. Just help us understand how you position yourself against the real long-term strategic
No, listen, I think you're right in what you say in this context, right? There is a lot of technology revenue out there in the hands of very big companies. The big revenue is out in the hands of companies like what you described, IBM, others. We line up our sales force by buyer, by secular competitor. They are lined up directly against those buyers, and frankly, our sales force knows who they compete with, and they know who they sell to. We do not line up with a bunch of generalists that have 10 things in their portfolio, and they sort of decide every day which one they'll sell and how they feel. They go directly up against competitor, and they go directly up against or towards selling to a buyer. It's hard for our group to get confused.
When you get a group of our salespeople together, they are talking about their competitor. They are talking about that buyer and our advantages relative to those competitors.
By the way, the reality is the reason we win, the reason we've beaten our competitors in database so soundly, our competitors in middleware so soundly, the reason we've nearly caught up in size to SAP, and in some regions have passed them, is because our products are better. You're actually looking at the wrong end of the chain, of the distribution chain, because it's the $5 billion a year that we spend on R&D, it's the $50 billion plus in acquired R&D. It's the integration. It's the foundation. When you get that right, and you get the sales model right, it is very, very hard to beat us, and that's really what we've been doing for the past decade, 20 years, 30 years, 35 years.
Excellent. This is Keith Weiss from Morgan Stanley. Thank you for hosting us today. As more of the solutions come, either in a solution stack integrated all the way through down to the hardware layer or from a cloud-based service, how does the role of your system integrator partners change? Do they still continue to be those key influencers for you guys on a going forward basis as you provide a lot more of that value?
Well, I think that market's going through change. Listen, our customers historically have taken applications and customized them, and IT has played a role of facilitating that customization with the end users, and a great industry has evolved. That being the SIs. They're going through the same issue the other folks are now, that IT, in some ways, is using cloud, whether it's private cloud, frankly, or public cloud, SaaS model, to force standardization. There's a couple ways to approach it, to embrace it or to fight it. I won't give you a report card on our various integrators, but we have partners that are really embracing it, and they are growing with us significantly, and there are others that are going through change.
Hi, thank you. Heather Bellini with Goldman Sachs. Safra, I had a question for you related to, you obviously have your toughest comp of the year coming up in this current quarter. I think it was +18% constant currency. I'm also wondering, are there other factors when you look at your guidance, which granted again, off of a very tough comp, I'm wondering how much of the potential chaos that the U.S. budget might cause and whether that was factored into how you were thinking about the outlook for November?
Well, I can tell you I did not want to get out ahead with the level of uncertainty related to whatever's going on in Washington. I felt that I wanted to be in a very, very safe place, give guidance in a range that I was very, very confident we would be in. Just looking at the tough comp, I don't want you to think I am not incredibly optimistic about our prospects this year. I think we're going to have an absolute fantastic year because the changes have been made in our past. We're really gelling. The products are all gelling. We've got a lot of references. If you walked around, I'm sure you did, through Oracle OpenWorld, if you just, at almost a random customer, if you were to run into one of the 50,000, 60,000 that are walking around, you're going to hear them.
They feel great. They're buying more. As I think I said before, a customer told me Exadata saved their job. Not a customer I had a planned meeting with, someone I just literally happened to be standing next to, and that kind of confidence is. I have no idea what's going to happen in Washington. I'm actually going to be there next week. Maybe I'll get a little insight. That's the only thing that went into my mind being a very, very safe place. I look at the comp, I look at the business. We're going to have a great year. That I am sure of. I think we'll have a great quarter, too, but this is where I thought I'd put it for the quarter.
Hi, it's Brent Thill with UBS. Safra, you've done an impressive job on the operating margins. I think you're about 300 basis points away from your target, around 50%. Longer term, not near term, how do you think about that framework? You still feel like you can go through 50% with comfort?
Well, first of all, I'd like to take full credit for all of it. Okay? I don't know what those other 124,000 employees were doing. I did this all myself. It is exhausting. Okay? I have to say, we are not that good. I am definitely not that good. This is very much a result of the incredible business model that Oracle has, that we've had for many years, which involves having a very, very enormous base of happy, satisfied customers who renew every year and buy more. Every time they buy more, it increases our installed base. A long, long time ago, when we were in the 30s, we thought we'd make it to 50. I think the way it works here at Oracle is every time you get to a finish line, you think you're there, Larry goes, "No, no.
Over there." I actually don't see We think that we can be even more profitable, more successful, that cloud actually will make more money, because though customers will spend less for the total service, they will pay us more. You kind of heard it even on the stage just now. The Oracle share goes up, and we are at scale as a company. Operationally, even when we buy companies, our G&A doesn't go anywhere, our support costs don't go anywhere. They all stay where they are, and yet the revenue comes in because the customers value what they're getting. I'm not calling it today, but I can assure you, the moment we cross 50, off we go. We're going to continue on. Yeah, go ahead.
Hi, Walter Pritchard from Citi. Just a question on apps. We saw a pretty good presentation from a variety of folks talking about some of the traction you've seen with Fusion. I think when we look at the numbers, you're not providing the same level of granularity between license and apps and database, but we make some of our own assumptions, including comments like last quarter where you mentioned database grew double digit, and we arrive at sort of the organic apps business declining from a license perspective. I'm trying to understand sort of the disconnect between what we hear and that in the numbers. There's factors like your cloud business where the ARR takes some time to catch up.
You've got quite a few options for customers to choose from in terms of Fusion and Applications Unlimited, and just trying to get a sense of, is this sort of the normal state in apps, and we should just expect a kind of a disparity between performance of the two businesses? If not, what improves and what gives us some transparency into that cloud business, which seems like it's doing pretty well.
Okay. First of all, I would caution you that you should never extrapolate from anything Q1-ish, okay? Things are very, very lumpy. In my view, the numbers are very small. I know for a regular company you wouldn't call Q1 small, but I would not extrapolate. Secondly, I want to also remind you that in cloud, there's apps and tech, and the reason that we stopped actually breaking it out is because it's all mixed in together. When a customer buys Fusion HR, they get the database in there and middleware and a lot of things together. The difference between whether it's tech or whether it's apps. Finally, even though as we talked about database grew double digits, there were a whole bunch of other pieces that affect. Some applications did extremely well, others did less well, and that includes the vertical applications.
You shouldn't start expecting anything from whatever it is you calculated out in your little spreadsheet.
Which, to add, was not right, how you calculated the spreadsheet.
I know.
Second, it's going up against a very strong apps.
Comp. Yeah
from the year before. You're going to have to look at these things over broader periods, and we'll try to give you more insight as we go. First of all, the calculation's wrong.
Yeah. There's no trend.
Going up against a very strong Q1. As was Q2, by the way, in apps.
One more.
One more.
Is there really one good one?
Wow, this is a lot of pressure. I don't know. You're waving hard. Listen, if it's a question that's a simple number.
Hi.
Hi.
Hi, Mark and Safra. It's John DiFucci from JPMorgan.
Yeah.
Mark, a question about Exadata. A while ago, when it first came out, you had to deal with the customer base, and they had to make some adjustments. There's a server guy, there's a storage guy. They had to come to agree on all of that.
Exactly.
It took some time. The first use case we saw that, hearing from you and talking to customers that really saw big adoption was OLAP, and then we heard about mission-critical OLTP large applications. There's a lot of talk about 12c here and a lot of talk about the in-memory option, and cache miss, and the multi-tenancy. First of all, with 12c, it just came out. The new version takes the time. I'm just curious, when do you think you're going to see the adoption when you're talking to customers? Because that multi-tenancy, is that the option?
Yeah, John, let's go back. We said this on the call last week. What you saw in Q1 had nothing to do with Oracle Database 12c.
Right.
Oracle Database 12c is just coming out. I think two things that are important that I'll try to relate to your point. A lot of what we've sold in Exadata to date has been project-based. Project that an application needed more performance. Exadata's been well-positioned to do that. It's delivered on it. What you saw today, which I thought was a really big deal when Andy was talking about what happened at UBS, it's a very different thing. You saw somebody make an architectural decision based on taking cost out, total cost of ownership. The ability to take whatever that number was, 1,000 different ways they figured out, which is amazing, to configure the Oracle Database. Different servers, different OSs, different infrastructure. I can tell you the general use case. People like UBS have opportunities to take their run costs down by 30%-40%.
30%-40% by basically finding a different way to deliver the same capability they're delivering today on a standard configuration, standard versions of everything. That gives us a brand new game to play. The opportunity now that we've got the user base seated with references that can validate compression, that can validate performance, now that we can start to have those discussions about let's standardize your architecture on how we deliver the database, add Oracle Database 12c, add in-memory to that very capability. This is a huge opportunity for us to ripple through our base, we'll do it.
Can the multi-tenancy option allow somebody on one full rack, instead of just focusing on a large mission-critical-
Absolutely.
Exactly.
You can see.
Run your own private cloud.
Exactly.
Run your own private cloud internally.
Which is where you're going to see this at, John.
Does that happen a year from now? Typically, is it about a year?
I think, well listen, I didn't tell you that story. He did. This is one of the biggest banks in the world.
In the world.
I can tell you those discussions are going on now.
Frankly.
First of all, John, to your point, our sales forces had to get used to this because frankly, the way we sell, who we compete with in these discussions has changed, and we're getting better and better at it. Now, not only are we getting better at it, the customers are getting better at talking to each other about it. It's a huge opportunity for us over the next year to 18 months.
Thank you.
Okay.
All right.
One short last.
One short question? Okay.
Does he answer like a number?
Three.
Three. Good.
One last question. Peter? Peter?
Oh, boy.
Hi, guys. Peter Goldmacher, Cowen & Company. What do you consider your two biggest competitive threats?
Three.
Ask the question three times.
He told you the answer.
He told me the answer. It was three.
Was three. Our competitive threats are ourselves, always. It's all about execution. We have what we need. Okay? We're spending enough on it. We've got the right people on it. We just have to execute. We see the goal line. We just got to keep going.
That's it. There's no second one.
No.
For us, the good news about Oracle is we got 124,000 people. They're very talented. They're very focused. Bad news is we have 124,000 people, we have to keep them led. We have to keep them lined up. We've now got a broad product portfolio, as we've described today. Our biggest issue, Peter, is really making sure we're in the field with clear, simple messages that we can give to customers and we can go execute. That is job one. That is our job.
Okay.
Okay.
Are we good? Thank you.
Thanks.
Thank you, all of you. Thank you.
I'm not Larry, just to be really clear with everybody. There's a little bit of traffic. He's just a couple of blocks away, you know how it is in San Francisco. I want to take the opportunity, though, to remind you, we did do the survey. We pushed that out to you, and I don't know if it helped, but just by a raise of hand, it'd be just some quick real-time feedback. We try to do something a little bit different this year and bring in the voice of the customer. I think Mark, as he made mention to, we didn't tell you what the customers told you. By show of hands, was this helpful to you, bringing in customers to get that voice, or is this just not something you care about what customers say? Okay. All right. We'll look to do that again.
You know what I'm going to do? Safra, Mark, if you guys are okay, I'm sorry to do this to you, I really want to make sure we keep the conversation going. We'll roll Larry in as soon as he gets here, I got a note he's going to be here any minute, that's been three times now.
Hi.
Yeah.
I can't tell you how excited I am to come back. Are you not coming? Yeah. Okay.
All right. Any other questions for Larry here?
With that lead in, all right. Nobody has any questions, do you?
Sure. How about.
This is a long week. This is just, it's incredible.
It's great, though.
to go through from Sunday till today with 60,000 people through here.
Derrick Wood at Susquehanna.
Hi, Derek.
One of the big pushbacks on Exadata is the price tag. I'm just wondering what the strategy is to drive more mass adoption of engineered systems, kind of in a similar way that you did with your database software.
Yeah. Derek, as I said, I'm in a good mood, when you saw 60% unit growth in Q1, you didn't think that was taking a lot of share? In the end, let's be clear. The server market is in, I don't know, negative 1%, negative 2% unit growth. We grew 60. We've introduced an eighth rack, which has gained a ton of share. Our issue has been, I think, one, the team have brought together various configurations. We've penetrated with those configurations. They've shown up in share, it's worked. Okay. Good news. Thank you, Derek. I think Larry's here.
Do it one more time. Come on, buddy.
Whatever you want to talk about, as long as it's not sailing. Yes, Rick?
Thanks, Larry. Congratulations on the America's Cup.
Thank you.
If you could maybe just share a perspective for us on how you were able to come back so dramatically. Hold on, there's an Oracle question in here. Maybe any parallels to Oracle company. If you anticipate, are there things that you see going on in the company now that you foresee might enable you to do a similar kind of re-acceleration in the business at Oracle?
Well, obviously, we had a big setback early in our campaign when we flipped our catamaran, and it kind of floated out underneath the Golden Gate Bridge. I don't know if you heard that. We had had the catamaran sailing for about a week, and Jimmy Spithill, who knows no fear, our helmsman, was out practicing in 30 knots of breeze. The boat, in 30 knots of breeze, goes about 60 miles an hour. One of the bows dug in, the boat flipped over, the wing broke, there was a big ebb tide. By the way, when there's an ebb tide, the water is flowing out underneath the Golden Gate Bridge, the prevailing winds are coming in.
You have 30 knots of breeze coming in, a 4.5 knot ebb tide, which makes huge waves inside the bay because those things are going against each other. In an ebb tide, a 30-knot wind is more like a 35-knot wind. By the way, it's a geometric progression. It's not 15% more, 30 to 35. The pressure, it's not double, but it's close to double. About 50% more. Anyway, we flipped the boat over. The boat floats out underneath the Golden Gate Bridge and starts being swept south towards Santa Barbara. It took us all night. We had to wait for the tide to come the other direction to get the boat back in. We had to get mine out of the water, it set us back for months.
In New Zealand, they did a lot more sailing than we did, they came in much better prepared. We were very focused on figuring out how to catch up to them, watching them in the Louis Vuitton Cup, how fast they were downwind, we thought they were faster than us downwind, especially this maneuver called a jibe. The boats don't go straight downwind. If they went straight downwind, they wouldn't go any faster than the wind. The boats go at an angle, that means they're like airplane wings. These things are like airplane wings, it creates a low-pressure area. You're kind of sucked downwind. It's called the Bernoulli effect. You create a low-pressure area in front of your sail. That's why airplanes fly. There's a big curve on top of the wing, the bottom of the wing is flat.
It's a shorter distance. I'm sure you're thrilled about this answer. This is the only question I'm going to take, I'm going to go home. You're sailing, it flips the boat over. We realized right at the beginning, watching Team New Zealand sail, they're faster than us downwind, they're much faster than us gybing. You don't go straight downwind. You go probably at a 60-degree angle off the wind, come back 60, the back of your boat keeps going through the wind direction, the wind goes from one side, the sails go from one side to the other. The maneuver is called gybing. New Zealand had a technique where they stayed up on their foils throughout the gybe. We had a technique where we actually sat down in the water, much, much slower.
We were working and working and working, and by the time the America's Cup started, we had caught up to them in gybing, in what's called foiling gybing, and downwind speed and reaching speed. We had not caught up to them, and we didn't realize we had a big deficit going upwind. We painfully found that out during the first few races of the America's Cup. We have lots of video, helicopter video, lots of sensor data. We took all the data. What is New Zealand doing? We had to figure out, A, we had to figure out how to speed up our boat, but we went to school on New Zealand. We looked at how they were trimming the wing. The wing is called camber. The wing is made up of two elements.
The wing itself and what's called a flap, just like an airplane wing, a big flap going length. You kind of create that angle and the camber. They were sailing at different wing trims, different angles, different twist at the top. We made a bunch of changes to the way we trim the boat. We changed the angles of our foils. We changed the angle of our rudder. When we had these new configurations that we figured out put more power in the boat, the sailors had then go out and use these new tools and change the way they sailed the boat. Now, typically in a boat, there are two things you care about when you're sailing upwind or downwind, the direction you're going and how fast you're going. You're never sailing directly for the mark.
Again, the marks are set due upwind and due downwind. A sailboat cannot sail directly into the wind, so you're sailing at an angle. The best monohull in the world can probably sail at a 30, 32 degrees off the wind. The mark is there, you're sailing like this, 30 degrees off the wind. Catamarans sail 40 degrees, 42 degrees off the wind, but much faster. We decided to sail at 45 degrees off the wind, not going, sailing what's called lower, but much faster going upwind, and the boat started foiling. We figured out how to get the boat to foil upwind. Once we did that, we went from being about 50 seconds slower on the upwind leg with them to being, by yesterday, where we became dominant. We weren't dominant until yesterday.
It was really tough racing in terms of equality of boat speed until yesterday, and yesterday in the second race yesterday. I guess that would be the day before. The second to last race, we finally had it dialed in where we were probably 50 seconds faster than they were upwind. They had made huge improvements, too. They had gone from the Louis Vuitton Cup to the America's Cup. They had speeded up by about a minute on that upwind leg. When they came out, we thought we were the same speed. They were a minute faster on that leg. We improved that leg for us by 2 minutes. We went from behind on the upwind leg almost a minute to in front by almost a minute.
It really was a combination of a lot of observing them, taking a lot of data points, really analyzing how they were sailing, what they were doing differently than we were doing. Doing a lot of analysis, applying it to our boat, how we had to make physical changes to our boat. The guys were up all night, every night, making physical changes to the boat. The boys had to literally go out and test it that morning for an hour before the race and see if it worked. Eventually, we just made improvement after improvement in a very fast rate. It was enough to win, but not by much. Down 8 to 1, facing sudden death for over a week was emotionally very stressful for everybody, especially me. Your question, how does this apply to Oracle?
Well, I think, seriously, the America's Cup is really a combination of engineering and athleticism. You got to get both right. With Oracle, it's a combination of engineering and salesmanship. You've got to build great products, you got to explain to people why they're great products and how they solve very specific problems. I think that we have always been able to look at what competitors are doing, learn what competitors are doing, if they're doing a better job than we are, rather than simply saying, "Well, that's ridiculous. This is nonsense." We kind of go to school on them and try to figure out how to do what they're doing better than they're doing it. I think we've done that across a series of IT generations. I think we're pretty good at learning from the competition, going them one better.
We think we can do it off the water as well as on the water. Yes?
Thank you, Kash Rangan from Merill Lynch . I'll add my congratulations along with Rick as well. My question was, with America's Cup out of the way, what are you going to be really focused on from a development perspective, also your thoughts on the in-memory database? It seemed like a couple of years back, it was not going to be mainstream. SAP was making noises with HANA. Where do you stand with your perspective on this being a big mainstream market, the in-memory option particularly? Thank you.
I've said a lot of things that maybe I didn't say clearly enough. I know some people said I said that the cloud was ridiculous. What I said was the term cloud was subject to a lot of hype. Hasso Plattner would have you believe, I think that in-memory databases were ridiculous because I said they were taking drugs if they're going into the in-memory database business against us. Let me be very clear what I meant by that. I think SAP choosing to compete with us in the arena of database as opposed to the arena of business applications is a huge mistake. We've been in this database business a very long time. We think we're very good at it. We've had the dominant in-memory database technology for a decade. It's called TimesTen. I absolutely believe, and have always believed in in-memory databases.
It's like saying, I don't believe in flash, that flash will, to some degree, displace disk. Of course, I believe that flash will, to some degree, displace disk, and we'll be among the first to take advantage of that. Of course, I believe that DRAM is getting cheaper and more and more of your database will be in-memory, and there are all sorts of new algorithms and techniques we can use to make the database run faster, analytics run faster by using this technology. Of course, we're going to be the best at that. We're the best at database in the world, and we're going to be the best at in-memory database in the world. I don't think there's any question of that. My point about SAP was, they, I think, have made an enormous mistake to focus on HANA rather than getting their business applications to the cloud.
It's really stunning. They tried this before with something called NetWeaver, where they decided to compete with us in middleware. At the time, IBM was the number one player, and SAP was nowhere, and we were below IBM. Now we're the number one player in middleware, and I don't think anyone even considers them a middleware supplier. Years ago, I don't know how long ago, was it five years ago? More? Eight years ago? They were talking about NetWeaver and how great NetWeaver was and how they're going to be a major supplier of middleware to the industry. They said it over and over again. They're a big, credible company. A lot of people bought into that, but I just think, that's not where I think their core competency is. Their core competency is in ERP and supply chain and things like that.
I think this NetWeaver thing was a huge distraction six, seven, eight years ago. I think this HANA thing is going to be a huge distraction for them. They have no chance whatsoever competing with us on in-memory databases. It's absurd. It's absolutely absurd. There are millions of programmers that use the Oracle database. How many programmers know how to use HANA? We have a multimillion-programmer advantage. There are millions of applications that run on the Oracle database. When you put the new version of 12c on, those applications automatically take advantage of our in-memory technology with no changes whatsoever. We'll have millions of in-memory optimized applications running on Oracle 12c. No application changes, no retraining of people, no rewriting of it. You have to rewrite your application for HANA to make it work. Okay, SAP will rewrite a few of their applications.
If you buy an application from SAP, an MRP application, let's say, it will run faster on HANA. God bless. Great. Most of the HANA applications are going to be written by SAP. Customers might write a few, but we have a multi-million application lead. We have a multi-million programmer lead. The new version of Oracle has much better, but let's say it was equal in-memory technology. I'm saying it's much better in-memory technology, but you don't have to believe me. It's equal. Let me tell you how you use it. You run your application. You turn it on, and you're done. You throw a switch, and you're done. Let me set that aside. I'm thrilled that they're doing that. I never said in-memory was crazy. I said that they were crazy to compete with us in this particular arena.
It's the same mistake over again, the same exact mistake they made with NetWeaver, and they're doing it again because Hasso loves to mess around with technology. He doesn't think supply chain is cool. He thinks database is cool. If you want to see, the best way to understand him is watch this video on their website called Hasso on Hasso. Hasso interviews himself. I'm not making this up. Please watch it. Hasso interviews himself, basically, one Hasso says, "My God, you're a genius." The other Hasso says, "Yes, I am." You really can't be a genius in general ledger. You can be a genius in-memory databases. Anyway, vanity is a very dangerous thing if you don't recognize it.
I think all of us in this room, certainly me, all of us have been tripped up by vanity at one time or another in our lives, you hate to take the whole company with you. Now what are they doing with this other little side business other than their big middleware business and their big database business? What are they doing with this little business they have on the side called ERP, where they're the world leader? Nothing. Nothing. They criticized us for rebuilding our applications and building these Fusion applications for the cloud, which has taken us eight years. In other words, we started eight years ago, by the way, we had to make great improvements to our middleware to do that.
To make it really multi-tenant, we had to change our database to make our database multi-tenant to get it ready so all of our applications will be multi-tenant. We took a very different approach to multi-tenancy. We put it in the underlying technology rather than at the application layer. There's a lot of reasons for that. I won't mention Salesforce. I'll mention NetSuite, which is a company I own half of and I started and was the first cloud company in the world. Back when they built their application, and they built a multi-tenant application, they had no choice but to build multi-tenancy at the application layer because you couldn't get it at the database layer. You could get it through virtualization, but back then VMware was not well known. You can get it at three layers.
You can get at the application layer, get at the platform layer, multi-tenancy. NetSuite, salesforce.com, 15-year-old companies put it at the application layer. Most people do it at the application layer. We did it at the database layer. Other people do it at the virtual machine layer. Some people don't call that multi-tenancy, just separate VMs. The problem with putting your multi-tenancy at the application layer is a lot of features of your underlying database don't work. I know that because we're in that business. When you start building multi-tenancy at the application layer, you make certain compromises with being able to use certain database features, like some of the security features. A lot of them just stop working. You can do it, but there are compromises you make. Now, they had no choice 15 years ago. That was their only avenue.
I'm not saying that was a stupid mistake. That's the only avenue they had 15 years ago. Things have changed. SAP has done what? They bought Ariba. They bought SuccessFactors, and that's their move into the cloud. What are they doing with supply chain accounting, payables, receivables, inventory, and MR? What are they doing? That's 99% of their business. They say they're really into the cloud. They advertise HANA's for the cloud. What, are you kidding me? HANA's for. Let's say DRAM is for the cloud. What does that mean, HANA's for the cloud? Well, you can run it in the cloud. Yes, you can run anything in the cloud. Obviously, salesforce.com runs Oracle in the cloud, NetSuite runs Oracle in the cloud, we run Oracle in the cloud. Sure, you can put any technology. You can use Dell servers. You say Dell servers.
Dell has this incredible new idea, selling Intel servers for the cloud. Totally different than selling the same exact box, not for the cloud. People say these things that I think are intended to deceive others. I think sometimes they end up deceiving themselves. We're a great believer in in-memory technology. We think it's a very, very big deal. We're the number one database player in the world, and we got millions of applications and millions of trained developers, and we're going to make it very easy to adopt that technology. In fact, it's just going to turn on. It arrives with the next version of Oracle. Turn it on. You're done. That's the in-memory side. I think there was another part of your question. I've worn you out, okay. Let's see, over here. Gentleman with a red badge. They both have red badges. I'm a little tired.
The gentleman with the red badge. Yeah, all the gentlemen. What's it about?
Hey, Larry. It's John DiFucci from JPMorgan. Most believe that one of the most important determinants of Oracle's early success was your strategy for the Oracle Database to work on essentially all platforms. Your current strategy, how it was explained to us today by several people up here, is to finely tune your software with your hardware to work together. I guess, what in the market today makes you believe that? It seems like a strategy shift. What in the world today makes you think that way, other than the fact that you bought a hardware company?
That's a very fair question. I've got a really easy answer. Yeah, we used to run on Data General and Digital and Wang. We ran on lots and lots of different computers. We probably ran on 30 Burroughs, Control Data. What caused us to change our strategy? We don't run on any of those computers anymore. Honeywell, Bull. We just stopped. We decided to not run on those things anymore. They're gone. There are very few computers left. They're almost all gone. What's left? Some data centers say there's only one computer in the world. That's a two-processor Intel machine running VMware and Red Hat Linux. That is what's called a computer, and there are no other kinds of computers. That's how extreme it's gotten. We still support HP-UX and still support IBM AIX, and we obviously support Solaris.
There are a few left, very few left. Almost none left. That's one half of the answer. It's not the strategy that's changed, the world has changed. There are very few computers left. Such a huge majority of Intel machines and two processor Intel machines just dominate computing, running Linux. When we say that we're just going to run on our hardware, what we're really doing is configuring our, we would say, we used to run on the Burroughs operating system, or we still run on the HP operating system. Exadata just runs Linux. We run Linux, we run on Red Hat Linux, we run on our Linux. That's not what makes Exadata magic. We think our Linux is better than Red Hat's, that's not the major deal.
The major deal is we built our hardware with very fast InfiniBand networking that other people don't use. We've written a special protocol, a direct-to-wire protocol, to take advantage of InfiniBand networking. We fill our PCI slots with flash memory, we don't go to disk very often, we can do 1 million IOs per second. It's a different world. We configure the storage, the disk, the flash, the network, the CPU, the operating system, the VM, the database. We put all those pieces together. It's kind of like configuring the boat. It's not any one thing. You put all the pieces together. The way the world historically, data centers, they pick, "Oh, I'm going to buy disk from EMC, I'm going to buy a network from 3Com or Cisco" or you name it, the data centers put all these pieces together.
You can still do that. We're still in the component business. You want to buy our database? You can go run it on what you want. You want to buy EMC disk or NetApp disk, God bless you can do it. We'll give you a choice. In addition to that, we run on all the popular computers. There are very few left, but we run on all the popular computers and all the popular operating systems. We give you an engineered system isn't an alternative to that exactly. It's an alternative to buying a lot of pieces and putting them together yourself, no instructions included, and getting a pre-configured system, storage, networking, and processing, with all the hardware and all the software engineered and tested to work together.
When you buy an Exadata, you know that everyone else who's running Exadata has tested this configuration for you. We test it, and all the configurations are the same. Same storage, same disk, same flash, same network, same software. It's all the same. It's much more like buying a car than it is buying pistons and catalytic converters and building your own car. I've always been critical of the computer industry, in that people buy lots and lots of parts and put them together themselves. No wonder it's expensive and no wonder it's unreliable. We think it's an interesting alternative to buy these complete configurations, where we've done all the engineering and all the testing, and when you get a new version. Think about it if you do it yourself. EMC has updates to their software, Cisco has updates to their software.
IBM AIX updates their software. You're running a database, we have updates to our software. Not only do you have to get it installed and running the first time, every time you're taking these updates, you have to retest the new configuration. When we update an Exadata, we send you one file. It fixes your disk microcode, it fixes the VM, it fixes our VM, it fixes the Linux operating system, it patches the database, it patches all the networking. It does it all, and we pre-tested it. You decide which is a better approach. People buying lots of separate pieces and putting them together themselves and testing it themselves, or letting us do that work for you. We give you a choice, you decide.
By the way, when we configure these things ourself, we said as long as we're doing this, we might as well make it run fast. We can balance the IO, we can do a lot of things to make it run fast. We do that. That's why Exadata runs fast. Almost more important than it runs fast, it's way cheaper to do it that way, than just buying lots and lots of parts and doing it all yourself. It's cheaper, it's easier to use, it's much more reliable because not only do we do the testing, you know that the thousands of companies that bought Exadata, if they have a bug in that Exadata and we fix that, we fix it across all the Exadatas. Everyone's configuration is the same. Very different than in a data center with a unique compute configuration.
You'll have bugs that no one else on the planet has except for you, because your configuration is unique. We think the old model is not very economical, not very reliable, and we're giving you a choice with engineered systems. We'll see. So far, it's working pretty well.
Just a quick add-on. By the way, congrats, because I think Oracle Team USA simply became Team USA over the last week.
Thank you very much. Very proud to be racing for the USA. It's really exciting. Gentleman back here.
Hi. Over the past year or so, you've spent a lot of money on comms companies. I'd just love to hear your view on your opportunity to help your comms customers run better businesses. How broad is that view, and really, where are the opportunities to add value there?
I think you said you bought a lot of cloud companies.
Comms companies.
Comms.
Acme Packet.
Oh, comms. Comms meaning not telecoms.
Right.
Right. Comms meaning telecoms. That's what threw me off. Again, I'm a little tired. Like Acme Packet and guys like that. We are very focused on industries. We have a lot of products that are horizontal, like our database or like our general ledger, though our general ledger has features for banks, like average daily balance and things like that. We have a lot of horizontal products. Certainly, Exadata is a horizontal product. Our database is horizontal. Some of our applications, like HR, are horizontal. We've also are deeply into applications that are unique to a particular industry, telecoms, billing, service provisioning the network automatically, letting people get online and buy a combination of mobile telephony, voice service, data service, and TV service all together and automating all of those pieces.
We've been a primary supplier to the telecoms industry for some time, and we think we've been very successful in that particular industry. Now we think we're just going to broaden our footprint. We think we can move from the IT side. Again, there's already a convergence in telecoms between IT and quote, "The network." They're coming together. We want to be active as a technology supplier, both on the IT side and on the network side, and basically bridge the gap. To have systems on the IT side that run the network. We want to, again, sell components on both sides of that, integrate those components, and become the most important technology provider to the telecommunications industry.
It's a big ask because, right now, we got competitors that are very specialized, like a Cisco, or a Huawei. They do very different things. They're coming primarily from the network side of the business and, if you will, the hardware side of the business. It's very interesting. I don't consider Cisco a hardware company. I consider them a software company. My best friend, Steve Jobs, never considered Apple a hardware company, considered them a software company that built pretty packages for their software. Most of the 21st-century, quote, "Hardware companies" are really EMC. EMC is a software company. Most of them, what they're really selling. It's very funny when we bought Sun, they said, "What does Oracle know about hardware? Oracle's going in the hardware business with Sun." I said, "Sun is 90% software." It was Java and Solaris and all of those pieces.
They were a software company, and they were also a silicon design company with a SPARC chip. The actual designing of the computer was a fairly small minority of the total engineers when we bought Sun. Sun was primarily a software company. We are focusing on a number of industries. Telecom's extremely important to us. We want to be on the network side as well as the IT side. You'll see us increasing our focus in other industries, like banking. You'll see we're doing extremely well in retail and some other industries. You're going to be seeing a big push for Oracle to expand its footprint, its software footprint, and hardware footprint in, its telecoms, software, and hardware footprint in specific industries that are very important to us. Let's Way in the back.
Here?
Both.
Here. Okay.
Thank you.
We'll go that way.
Okay. Thanks.
Thanks. Larry, Steve Koenig from Wedbush. I wanted to ask about the data that's not valuable enough to fly in the fighter jet. What's the-
I'm sorry, I couldn't hear what you were saying.
Okay. I want to talk about. Is it on? Hello. Thanks.
The data.
I want to talk about the data that is not valuable enough to fly in the fighter jet that is the Oracle Database. In particular, what I'm wondering about is.
You mean like videos of cats.
That's the one.
Cats playing and tumbling around. The cat videos.
Or maybe-
Yeah, I mean.
Hasso interviews Hasso.
Well, no, I think Autonomy was the database that actually positioned itself as we handle unstructured data, Oracle handles the structured data. We'd say, "Yeah, absolutely." We handle things like banking balances and payroll information and accounting information and customer data. They handle cat videos, pictures, photographs of your kids. They handle all that stuff. Yeah, no, I got it. Structured versus unstructured data.
Yeah.
By the way, we handle cat videos and photographs of your kids, too. It's not a huge moneymaker for us.
Okay.
It's interesting how much people are willing to pay to store their cat videos. It's just way less than they're willing to pay to store, let's say, all their network configuration data at AT&T. It's interesting. I don't know why. It just seems to be that way, and I'm a libertarian market-oriented kind of guy, okay, whatever. We'll respond to that. You had a question, probably.
Yeah, I did. Thank you. We're seeing some initiatives from Oracle around a Hadoop distribution. We see the Big Data Appliance. I learned today about big data functionality within your HCM application, having to do with recruiting and looking at job postings. Should we expect more of these kinds of initiatives scattered throughout your product lines or a more holistic approach to dealing with cat videos or the other 95% of data that doesn't go in Oracle?
By the way, Hadoop does not deal with cat videos very well either. Let me be very clear. As much as we love Hadoop, I think it's an important piece of technology, it doesn't handle cat videos worth a darn. Hadoop is a batch program. It's a batch approach, basically, to sorting data. It's a technique called MapReduce. When people say big data, they mean two things. Lots of data is one thing they mean, the other thing they mean is Hadoop. It means Hadoop. The term big data pretty much came from Hadoop because it could sort through vast amounts of data. It's a parallel processing system. This MapReduce technology could use lots and lots of computers, gang them together, basically sort through lots and lots of data. It's a batch system.
It was first developed at Google, then Yahoo made a version of it, Yahoo's version became Hadoop. Became open source and became Hadoop. It's an interesting technology. It's good for some things. In any way, shape, or form can a batch system like Hadoop do network provisioning at AT&T or any kind of real-time system. It's an interesting analytics system. It works on lots and lots of data, after a period of time, gives you a result. Very different. It's not a transaction processing system, it doesn't do OLTP at all. OLTP databases are safe. It doesn't give you an answer then let you ask a follow-up answer right away because it's a batch system that runs over a period of time, you have to wait for it to complete.
It's an important, new, interesting piece of technology, we think people use Hadoop in conjunction with the Oracle database quite a bit, though Hadoop, by the way, is very difficult to use, where it's slowed down recently. There's been a number of articles about the adoption of Hadoop is slow because it's very complicated. You have to train a lot of people. It's not a simple system to use. There are a lot of bright people out there, they're getting the hang of it, people use Hadoop and Oracle in concert. They use them together. We think it was important for us to have our own machine that ran Hadoop, with an InfiniBand interconnect that it could connect to Exadata. The combination of those two would solve some interesting problems. Again, these are not at all competitive products. Just like MySQL.
A lot of people used to talk about MySQL, now because we bought Sun, we got MySQL. They said, "MySQL, which is a relational database, gee, that's going to really kill Oracle." They're very different. They're both relational databases. They both use the SQL language. In no way, shape, or form are they competitive. They're complementary, people use them for different things. Same as Hadoop. Yeah. Gentleman here.
Yeah. Dan Ives, FBR. Could you just give some thoughts on consolidation within the tech sector? How do you think that's going to play out over the next few years and maybe how Oracle plays into that? Thanks.
Consolidation in the tech sector. There are so many different parts of that. There are so few. "The old tech sector" is so consolidated. We could talk about old tech. How many PC server manufacturers are there left? There used to be a lot. There aren't many. How many PC manufacturers are left? There aren't many. They're being replaced by a whole new collection of startups with cloud applications, which is very low cost entry, very highly specialized cloud applications, everything from paying expenses to making reservations at conferences. There are lots of these very interesting new companies that are starting up. That's always been the way it is in our industry. We've always gone through this explosive phase of, I remember there used to be, I think Michael Dell told me there were 500 PC companies in the U.S. at one time. 500.
It's just crazy. We always go through this very explosive phase, supported, a bunch of entrepreneurs go out and start companies. Turns out very few of them have a very long half-life. Either they fail, or they get acquired. Some are very successful, and they do some acquiring. We're going to do what we always do, which is develop a lot of stuff for the cloud ourself. Where we're not developing, we're going to go out and buy stuff for the cloud. We are an early consolidator of this new generation of cloud application technology. That consolidation, you could argue, we bought Taleo, we bought RightNow, we bought Eloqua. I can make a long list of others.
The consolidation, while there are lots of new companies starting up, if you will, the consolidation is in the early phases now, and we think we're one of the consolidators because our strategy has always been to have a complete and integrated portfolio of applications. We call it what we used When Microsoft was a great company, they're still a great company, but back in 1995, where they were the dominant tech company on Earth. What had made them so successful is when they replaced WordPerfect and they replaced Lotus 1-2-3. There were all of these separate players, all these individual application players. There are a few people in the audience that are nodding, and a bunch of people are looking at me, like the younger people looking like, "What the hell is he talking about? Word what? Perfect word?
My God, he's old. 1995, I was at Harvard in 1995. What's he talking about? The industry always works the same way. Lots and lots of startups, lots of interesting things, individual strong players in a very narrow niche. You had the WordPerfect, you could have, let's say, a Salesforce doing well in sales automation. You could have a Workday doing well on HCM, though that remains to be seen, but they're off to a good start. You could have all of these niche players. That is not our strategy. Our strategy, we might buy some of those, not Salesforce, not Workday. We might buy some of those. We are buying some of those. Our strategy is to have the complete portfolio of cloud applications.
We're going to have HCM, we're going to have sales automation and service automation and marketing automation, and we're going to deliver all of those as an integrated suite. Integrated suites historically in our industry have always won, whether it's Microsoft Office or SAP. There used to be accounts payable, accounts receivable, general ledger, you bought all these things separately, and eventually, you had this notion of ERP, this collection, this suite of business applications you could buy. Our strategy has always been, because we're a big company, that we need to be a suite provider. We can build part of the suite, we can buy part of the suite. We need to be different than these small companies. We need to use size to our advantage. Cloud consolidation is in its early phases, but we're one of the early consolidators.
Our strategy is to deliver a complete and integrated suite at the application layer, but also a complete and integrated suite at the platform layer. That's database, Java middleware, a login service, single sign-on. I can go on and on and on. All of these things at the platform level. Then also infrastructure, a VM, a Linux operating system, a Solaris operating system. To provide all of this technology at all three layers of the cloud, infrastructure, platform, and applications, and have complete and integrated suites across all of those layers. As far as I know, we're the only player giving all three layers of the cloud. Typically, you talk about a salesforce.com who's very strong in a particular application. We used to be called SaaS before we knew it was called the cloud.
It used to be called an internet application before we knew it was called SaaS. You got someone who's very strong in one part, in one silo of one layer of the cloud. Then you've got Amazon, who's very, very strong at the infrastructure layer, VM with Elastic Compute Cloud and Elastic storage, you get that from Amazon. We have that too, but we want to be differentiated. That's not the only thing we want to sell. You can argue what Amazon is selling is not unlike selling an undifferentiated PC with Linux operating system and a VM as infrastructure. There's nothing wrong with selling an undifferentiated commodity service. Electricity is an undifferentiated commodity service. You can make a lot of money. Oil is an undifferentiated commodity service. You can make a lot of money in a commodity service. It's not a bad business.
That is not the business we've ever wanted to be in. We want to be in the value-added business, the value add is twofold. Yeah, we sell infrastructure, we sell the most popular database and the most popular programming language on top of it. Oracle is by far the most popular database in the world. Java is by far the most popular programming language in the world. We're very successful in applications. We're the number 2 application player in the world. We're going to play at all three layers. We don't want to just be an undifferentiated commodity infrastructure as a service supplier. That, again, it's always been our strategy to sell highly valued, highly differentiated products and services with a very large Oracle intellectual property content. That's what we do. We build technology. Sometimes we buy technology.
That's our approach as distinct from, let's say, a salesforce.com, very strong in one silo at one layer, or an Amazon, very strong at the commodity layer. Gentleman here.
Thanks. Colin Wong from Mawer Investment. Larry, in the past three decades, you've made some pretty big bets with Oracle on various technologies such as relational database, Oracle7, network computing, integrated suite, you name it. Maybe you can talk about how you determine what to bet on more specifically, when to bet on it. That's probably more important.
A very interesting question. We try to be at the leading edge, not bleeding edge of technology. Let me be very specific. We got into flash storage in the form of our Exadata machine fairly early on, we weren't the first. There were other flash companies out there before us. We tend to be fairly early with technology. In-memory database, I think we're fairly early. We're not the first, we're fairly early in-memory database. Same thing, we did object databases. We've done a whole bunch of things. Oracle is a relational database. Oracle is a database. It has an object store, it has XML store. We have lots and lots of different data types supported in the Oracle Database. We watch very closely. This is back to the sailboat. We watch very closely what Team New Zealand's doing.
We watched HANA very closely, but that's not the only thing. There are lots and lots of publications on in-memory database have been going on for a long time. Columnar databases, a lot of that work was done by Michael Stonebraker. We have a lot of bright guys at Oracle. We read the university research. We watch what competitors are doing. We believe if the technology is interesting enough, in other words, we think it's valuable enough that our customers will benefit significantly from it, or if said another way, if we don't do it, we'll be putting ourselves at a competitive disadvantage. We decide to put together a program to integrate that technology into the Oracle Database with one important difference. Once it's in the Oracle Database, it has to be totally transparent to all the existing applications, has to be upward compatible.
It can't be, "Oh, darn, we put this in-memory technology in the Oracle Database, now a few of your applications don't work anymore." No. No. People get very upset about that. Yeah, we put this new technology in the Oracle Database, but you're going to have to change your programs to take advantage of it. No. We work very hard when we introduce the new technology that it doesn't disrupt. You can uptake it with zero disruption and get the benefits through the flick of a switch. That means we're probably not going to be first. It's going to take us, it's a little harder task than if you're just building just a pure, brand-new in-memory database. Plus, we have to worry about all sorts of security issues and recovery issues, and they expect our database to work all the time, every time.
We're doing a quasi-experimental new database and just for people to try just on certain query processing. You don't have that rigorous set of tests you have to pass before you can actually deliver that technology to your customer base. That's what I mean by we watch this stuff very closely. Once we determine it's important, we adopt a technology program to integrate it with our existing database. We've done a bunch of extensions and changes and improvements to Java. One of the first things we did when we got Java, and there are cool new languages out. I'm talking about the database and the memory database, but there's Ruby. Ruby became very, very popular in programming languages, and people are talking about Java being old. There was actually the Java community process made it very difficult to get changes through Java.
I'm not going to go into the politics of doing it. We decided two things when we acquired Sun, is that there are a bunch of things we need to add to Java to keep it at the forefront of technology or people will be using Ruby more than we would like. It's not just Ruby, there are other things. We had to do it in a graceful way. We had to streamline the Java community process because there's some people that were just blocking for the sake of blocking. Just politics is like that. Thomas Kurian and his team did a great job on both streamlining the community process and on making pretty much everyone happy. IBM's a big supporter, but IBM's got a huge investment. I think SAP is a big supporter in Java. We all have huge investments in Java.
We all want the language to continue to evolve and improve. Even if you're our competitors, in terms of Java, we're all in this together. We watch what's going on with other languages, make improvements to Java to make sure it stays modern and competitive. That's just a routine process inside of Oracle. There are always going to be innovations. There are bright people all over the place doing interesting things. Some things will be invented at Oracle. It's not so important that they're invented at Oracle. What's important is if they're invented, that Oracle knows about it, Oracle evaluates it, and Oracle's in a position to deliver that technology to its customers in an easily consumable way. All the way in the back. All the way in the back on that side. Yeah, and then the gentleman right in front. Okay.
Hi, Larry. Jason Maynard with Wells Fargo. In your keynote on Wednesday night, you really outlined where Oracle-- this was at the end of your keynote on the future of the data center. You outlined where Oracle fits in.
Sunday night.
Sunday night.
Sunday night. I think Wednesday night, I was out in the water. It was actually Tuesday afternoon, I think, where I played hooky.
Yeah.
By the way, that's the only presentation I've missed in 25 years. There were a lot of tweets that were not good. I'm really sorry. I wish I got off the water, showed up Sunday night for my keynote. Had we lost the first race, I don't know. Would I have showed up if we had lost the first race on Tuesday? I don't know. I'd probably been a little bit depressed, but I think I would have showed up. I hope people in time will forgive me. I'm sorry, Jason, go ahead.
It was a long week for all of us. I apologize. You'd made a point, though, on Sunday about how the core of the data center was going to be these two-socket Intel servers, you've kind of touched on it a little bit, but I'm curious, what do you think happens in that market? Do you think Amazon with AWS takes the share? Do you think OpenStack makes a play as a real viable alternative? Do you think VMware wins? Ultimately, is there a move for Oracle to, if you will, monetize at some layer in this whole commodity data center opportunity?
Well, recently, we announced our Virtual Compute Appliance, which is our version of the two-socket core. A bunch of two-socket machines with our VM, our Linux distribution, interconnected with InfiniBand. Admittedly, that's new. Obviously the popular thing is Red Hat Linux, VMware, and two-socket machines from, I guess, the leading two-socket server supplier now is Dell. I'm not even sure. Is Dell number one on servers? I don't know. Is Mark Hurd here? Okay. He would know. Bud Eve. Okay. They're tied for first. What does it look like? Does it go to Amazon? Amazon's tiny. I know they're growing fast, and that's great. I don't think it's going to be all the cloud or all inside of JPMorgan Chase. I think you're going to have a combination of both. Let me tell you our strategy vis-a-vis, does it go to OpenStack?
Does it go to just VMware? What I think customers want, from talking to customers, is they would like their cloud to be identical to the data center. In other words, they'd like to have the same software in their data center, same infrastructure, same configuration, same APIs, same controls as in a cloud. Think about how advantageous that would be. You could build an application in your data center, ship it over and run it in the cloud. Change your mind, bring it back to your data center. You got a new project, you could start it in the cloud. Halfway through, you could move it to your data center by pressing a button. Wouldn't it be nice to have the cloud and your data center be transparent and interchangeable? In other words, we used to call this industry standards, some kind of industry standards.
We haven't got to industry standards in the cloud yet. There's a big thing of OpenStack, kind of an attempt at a standard. Our strategy is to offer our customers infrastructure platform, infrastructure operating system, VM, platform database, Java, applications, if you will, that run identically in our cloud to how they run in their data center. They don't have to decide, "Oh, I'm going to build this in the cloud. I'm going to put this in my data center." It makes no difference. Change your mind every day, move it back and forth. You can be running a database in the data center, back it up in the cloud. The machine breaks in the data center, use a machine in the cloud to be its disaster recovery center, because they're all the same.
It all looks the same from the point of view of the programmer and the application program and the database administrator. They can't distinguish between the cloud and the data center. We think that has huge utility and huge implications. That's exactly what our strategy is, to sell customers stuff that run in the cloud, run in the data center, and you never have to decide. Versus Salesforce, bless their hearts, very successful company. Let me tell you where you can run the salesforce.com application. That would be salesforce.com. If they quadruple the price, you have two choices: pay them or run a different application. Our approach, again, is very different. Our approach is, including with the applications. Fusion applications, by the way, not only run multi-tenant in the cloud.
If you want to, if you're JPMorgan Chase and you want to run general ledger payables or Bank of America or whomever, HSBC, you don't want to use the cloud for whatever reason, you can then run the exact same application on your computers. Then you can do all your development in the cloud and then run production on your computers. We're the only ones that are really trying to bridge the gap, not saying, "Hey, it's either the cloud's going to be everything." Everything's going to run the cloud. Everything. Only the dinosaur. There's still IBM mainframes around running a lot of these banks. We don't think it's going to be all black or all white.
We think people want to be able to have standards where they can develop using standards like Java and the Oracle Database like they're doing today, then they'd like to be able to run those applications in the cloud or not. That's very different than saying, "Hey, build your application for Amazon." Our approach is what we've learned over the years, which we think industry standards are important. Choice is important. It's not all black. It's not all white. Don't get too excited that big companies are not going to close all their data centers and go to the cloud, but they're going to use the cloud. They should. On Sunday night, we introduced our new backup appliance, full name Backup, Logging, Recovery Appliance. We also announced a cloud service, Backup, Logging, and Recovery Cloud Service.
You can buy that machine and put it in your data center and back up all your databases. You can get the identical service in the cloud. You could start with that service in the cloud and after a while say, "Hey, this would be cheaper to do in-house" or for whatever security or legal reasons, I want the backups in-house, or I want the backups in a different country that Oracle doesn't support in their data centers. You can do that. You can choose that. It's the same exact service, whether it's on-premise or in the cloud. It's all multi-tenant, it's all just push a button, you decide which way to go. That's what we're doing. When you use the Oracle Database, the way you use it in the cloud and the way you use it on-premise is identical.
You can't distinguish one or the other. You build an application in one place, it runs both places. That's a very different approach to how other people are attacking the problem. We're at all three layers of the cloud, infrastructure, platform, Oracle and Java, and applications. We're saying that we'll help you build a private cloud identical to our public cloud. Let me be clear. In private clouds used for, hey, just a computer in your data center sometimes. Everything's a private cloud. You think public cloud was a misused term. Private cloud is the ultimate misused term because basically this, "Oh, you got a data center? Yeah, we'll call that a private cloud." We have nothing but public clouds and private clouds. Immediately after this speech, everything's the cloud. People are saying that. People are getting in trouble.
Big companies are getting in trouble for describing their cloud business as being huge all of a sudden. We all know who I'm talking about. "We have a huge cloud business." "Well, what's that?" "Well, we've had it for 30 years." Gigantic. Really? If we did that, we'd be in a lot more trouble than they are. They're in a little bit of trouble. You've got to be a little bit careful. When we talk about a private cloud, we're talking about the identical software we're running in our public cloud, you run in your data center, then you can do all this movement back and forth. You can decide to add capacity in your data center if that makes sense, or you can purchase excess capacity in our public cloud. We think that makes sense. We're the only ones doing that, too.
We're doing things differently, because we want to have a differentiated set of products and services. We think that way we can add more value, and compete more effectively in the marketplace, and customers will choose us rather than somebody else. Am I done? One last question. Safra, do you want to ask one now? Okay. Gentleman right here. Sorry. The gentleman with the red badge.
Another one. Ryan Mallinchak from Barclays. Just sorry for the last question to bring it back to the sailing. If I look at your boat, the amount of sensor data you got out of them, you were probably a poster child for the Internet of Things. Talk a little bit about how much do you think is the hype, how much it's a reality, and how is Oracle going to benefit here? Thank you.
Well, that's a great question. I came very close to doing a keynote, probably a keynote I would have missed, on the Internet of Things. I was looking at what I wanted to talk about, and I'm always tempted to talk about the future, rather than what we're delivering today. That's good for me, but maybe not so good for the company. The Internet of Things we think is a huge opportunity for us, Oracle opportunity, and we think it's a very big deal. Right now, no one is providing an end-to-end development all the way through deployment of Internet of Things, again, development and runtime environment. We're going to do that. We are doing that, and we think we have the right pieces in Java and the Oracle Database. There are versions of Java that run on a card.
I think it's called, very creatively, Java Card. We think we have the right technology to put software way out into the Internet of Things in very small, very inexpensive devices. I didn't get any questions on Lanai. I guess all those questions went to sailing this time. I usually get a lot of questions about the island of Lanai in Hawaii. We are actually doing, and this is related to the Internet of Things, we're actually doing a two-way electric grid over there. It's strange. I own the water company. I own a lot of the utilities in Lanai. It's very strange. We are doing desalination and irrigation on Lanai to bring back commercial agriculture, and we have sensors at every drip irrigation spot, so we would know when to open and close. The water is so precious because it's all reclaimed from seawater.
It's all photovoltaic-driven desalination from an Israeli company called IDE, and then there's an Israeli irrigation company. We have sensors out there, Internet of Things, we know when to open and close the valves on individual sensors to get just the right amount of moisture in the soil. We're sensing the moisture content in the soil, opening and closing valves, doing all sorts of interesting things. You can make, in the two-way grid, we also have a lot of people want to put solar cells on their roof. We can figure out exactly how to collect that power. That's what I mean by a two-way grid. We don't just send electricity to your home.
We also can collect electricity from your home if you happen to be generating some, either with a windmill or photovoltaic cells or there are a variety of different ways you can do it. We have the appropriate sensor technology. We know whether just to redistribute that on the grid to meet immediate demand or actually use it to pump water from one reservoir up the hill, from a low reservoir into a high reservoir, rather than using batteries, which is the way we store energy on Lanai. If you pump it from a low reservoir to a high reservoir, you can then at night let it run down from the high reservoir to the low reservoir and collect hydroelectric power. Anyway, we're building a huge Internet of Things on the island of Lanai as a laboratory. We're seeing this all over the place.
We're seeing lots of examples where a little bit of intelligence in the periphery of the networks, whether it's keeping track of products and where they are. There are lots and lots of examples where the Internet of Things is going to change everything. Everything's going to be smart. Your clothes dryer, your dishwasher, the box that your computer comes in. Of course, your computer is smart. Now the box your computer comes in will also be smart, and you'll be able to figure out exactly where it is and then figure out when you should receive it. We think there are going to be a lot of things. Everything's going to be on the internet. Everything's going to be fairly smart. Our Java technology is better positioned than any other competing technology to go after this whole new generation of applications. Thank you very much.