Good morning and welcome to Oracle's Executive Access for Investors webcast. Today's conference is being recorded. For today's opening remarks and introductions, I would like to turn the call over to Mr. Paul Ziots, Oracle's Director of Investor Relations. Please go ahead, sir.
Thank you, Marvin. Hello, everyone, and thank you for joining us today for Oracle's Executive Access for Investors. It's an educational webcast series hosted by Oracle. Today is Thursday, April 28, 2011. Joining us today is Hasan Rizvi, Senior VP of Product Development for Fusion Middleware and Java, and Equity Research Analyst David Hilal of FBR Capital Markets. Today, Hasan will be discussing Fusion Middleware, including key components and capabilities of Fusion Middleware, Exalogic, Oracle's new middleware integrated system, and Fusion Middleware as a foundation for Fusion Applications. Please note that Hasan will not be discussing any information that's not already publicly available. At the conclusion of Hasan's presentation, we'll turn the webcast over to David, who will moderate the Q&A. You may submit questions at any time by clicking on "Ask a Question" on the left side of your screen.
Please keep in mind we will not comment on business in the current quarter. As a reminder, the matters we'll be discussing may include forward-looking statements, and as such, they're subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Form 10-K and Form 10-Q, which identify important risk factors that could cause actual results to differ from those contained in forward-looking statements. You're cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we're not obligating ourselves to revise, update, or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Lastly, unauthorized recording of this webcast is not permitted. I'd like to now introduce Hasan.
Thank you. And thank you, everybody, for joining us. As you heard, the topic today is Fusion Middleware. What we plan to do in the first few minutes is just to give you an introduction around a few key areas, give you a sense of what we mean by Oracle Fusion Middleware, what is the strategy, what is the differentiation, and how do we see the adoption in the market for our products. We'll talk about the Exalogic system, which is an integrated system very much like Exadata for the database. We'll talk about how Fusion Middleware is being used as the foundation for all of our application development, particularly the Fusion Applications, which obviously, as you know, are about to be out there in terms of customer adoption and ramping up.
Now, to start out, let me very briefly give you an overall introduction of what we mean by Fusion Middleware. Firstly, Fusion Middleware for us is a complete set of technologies, solutions, as well as services that help our customers develop new applications, extend existing applications, integrate applications together, and deliver their IT services to their customers. Obviously, it's based on modern architecture. It's basically everything that you need to develop and deploy your IT services that, in some sense, sits above the database and below the application layer. If you look at the product strategy, and this is something that we've been executing on for the last many years fairly consistently, it's really based on three broad principles. First is to provide a complete and integrated middleware suite.
If you look at the middleware areas, and we'll talk about the areas more specifically, one of the bigger challenges our customers face is the complexity of building a piecemeal solution. There are a lot of moving parts, and there is a lot of investment our customers have to spend in acquiring them and then integrating them. One of the things we obviously feel for us at Oracle, we can do a better job of providing a better integrated solution out of the box and really reduce the complexity associated with really piecing this together. As I get into the details, you realize how many different things have to come together. That's one aspect, which is to provide a complete and integrated suite. Of course, we focus on the fact that it's modular. Nobody can adopt anything that large in one shot. It's very modular. You can consume it incrementally.
It's based on open standards, which is a big differentiation for us. It's entirely based on Java and other open standards. It is what we call hot pluggable, meaning that it integrates with the heterogeneous environment. Again, as much as we'd like people to use more and more of Oracle products, the data center is a heterogeneous platform. There are a lot of other vendors. We spend a lot of our resources in Fusion Middleware to make sure that our products work with other products, which we may have as well. Our products work with other application servers, with other databases, with other portals, with other directories, making sure that the enterprise can adopt it in the heterogeneous environment that exists there. Finally, we focus a lot on not just having a complete and integrated suite, but make sure that every component is best of breed.
It's great to have a complete and integrated suite, but for a given problem, you want the best solution. I think we have done a really good job of maintaining that balance between continuing to offer best-of-breed components, yet provide an integrated and complete offering. Of course, as I said, all of this is to enable our customers to develop and deploy applications on the internet, as well as on the cloud. The products we provide span both tools that are used by IT departments, as well as solutions that are focused on lines of business users. The final point is, of course, we want to do this in the most efficient manner to enable our customers to not only get the best products, but also to be able to run them efficiently.
We have a very powerful and integrated systems management capability that helps our customers manage all of this in terms of lifecycle management, provisioning, monitoring, everything that you need to run these things. We obviously support commodity hardware and storage, again, to make it easier for our customers to adopt this. With Exalogic and Exadata, of course, now we have yet another element to that with the integrated system strategy with Exalogic, which really further reduces the cost to operate and to get a system up and running. We'll obviously talk about that in a little bit more detail in a few minutes. If you look at the product set, again, it's a very broad set of products. What I'll do is I'll very briefly, if you see this picture, this kind of captures all the different areas. Each of these is really a suite of products.
Each of these has multiple, in some sense, there are multiple companies who do each of these. This is a pretty broad set. I'll just capture some of the highlights, starting from the bottom up. The application grid layer really is our environment to run all the applications. This is all our Java products, like WebLogic Server, as well as non-Java application servers like Tuxedo. Tuxedo is actually very interesting for mainframe replatforming, as well as really large OLTP applications. I'll talk about Tuxedo a little bit more in the context of Exalogic.
Data integration is an important element, as we see our customers wanting to not just build data warehouses, which, of course, we've been doing for a very long time, but also provide real-time data integration and making data available in various parts of their organization, between the back office and the front office, and do it in a real-time fashion. Data integration also includes data quality, as well as extraction and transformation type technologies. This is an area that recently we've put a lot of emphasis on because, again, we see a lot of demand for our customers to be able to manage large volumes of data without necessarily building data warehouses, but doing more real-time data integration in the enterprise. We also have a complete set of service-oriented architecture and business process management tools and applications to integrate applications, to develop new applications.
Service-oriented architectures obviously have become very mainstream now, very mature. If you look at our product line, of course, we've been doing this for quite some time. It's one of the earlier efforts within middleware. Currently, big focus on business process management, a lot of emphasis around automation, around business processes. That's all part of this effort. We also have a complete set of business intelligence products, all the way from the tools you need to build BI applications, Analytics, et cetera, as well as how to manage data in a BI environment with Essbase, which is a non-relational, if you will, storage mechanism, as well as applications that we've built. In terms of solutions that can be used by lines of business, which brings together a bunch of this technology and really looks at a focused application around customer management or HR management from an analytics perspective.
We have an unstructured content management system. Again, a lot of relational databases, a lot of data in Oracle databases. As you know, a lot of unstructured content, documents, web content. We have an enterprise-wide content management solution. Finally, a framework and a solution to deliver all of these IT services to the end customers, which may be employees, customers, or partners. How do you deliver across all the different channels, whether it's mobile with smartphones, laptops, iPads, or desktops? How do you develop your applications in a way that is future-proof for not just other alternate channels, but also that brings together the various forms of communication and collaboration that are being used? Social collaboration, as well as portals and communities, how do you deliver all of that in an enterprise context with all the things that you need in an enterprise with security, reliability, and availability?
How do you develop it once, but be able to deliver it across these? They're all based on our development tools. We have a complete set of development tools, our own, as well as we obviously support open standards like Eclipse and others. Finally, we have a complete solution for identity management. For a lot of our IT enterprise customers, how you secure your infrastructure is as important. Identity management is all around how you manage identities, users, how you authorize users in terms of making sure that the right people are accessing the right systems, and how you secure all the information that is needed for this. All of that is included in the identity management system.
As I mentioned earlier, we have a full set of tools as part of our enterprise management products that help you manage the lifecycle across the entire cycle of using these capabilities, installing it, provisioning it, monitoring it, service level managing it, providing business metrics, etc. These products have come together over the last many years. We've had a lot of development. We have a very, very strong investment from an R&D perspective. Some of it has been built with some of the acquisitions that we've made over the years. The key area for us is really how do we take those acquisitions and very quickly integrate them to make sure that we can keep fulfilling that overall strategy around an integrated system. In terms of our product lifecycle or product cycle, we have a major release of our middleware product starting in July of 2009 called 11g.
That was a year after the BEA acquisition, which was a major milestone for us to integrate a lot of the BEA technologies, WebLogic Server, others as part of our stack. Since then, we've been doing 11g releases of all our products. At this point, as of late last year, every product suite that I've mentioned has an 11g release in the market. Just this year, we did business intelligence 11g. We did business process management 11g. We did content management, as well as data integration. We have a very strong product cycle in terms of a new product that brings a lot of new capabilities, a lot of innovation to our customers. We are basically, depending on kind of where you start, I would say in the first half of adoption of 11g.
I'll kind of give you a little bit more color on the 11g adoption a little later. Very briefly, just to touch on a couple of areas which span all our products in terms of some of the strategic, if you will, innovative concepts that we have that also provide a key differentiation for us as far as our competition is concerned. On this slide, you see kind of six areas. I'll talk about a couple of them. On the left are the ones that are really business user visible. These are things that lines of business users and developers, if you will, who are changing the systems really benefit from. Analytics is a core part of our middleware platform. Typically, you don't hear Analytics being included in middleware.
For us, it's important because we believe Analytics should be provided in the context of enterprise and OLTP applications, as opposed to having distinct systems where you have to go to get Analytics. Our Fusion Applications are actually, that is one of the key principles there, where when you're doing your transactional interaction, you see the analytic information you need in context. Analytics is a big part of all of our products. That's why business intelligence is such a key component. Also, a lot of our design and development is based on declarative models as opposed to writing programs. It's much more efficient, not only for developers, our developers, our customers' developers, but also enables a much better way to configure and customize is not the right word, but what used to be called customization.
What do you do to make the application behave the way you want it for your environment? Do that in a metadata-driven model so that it's much easier to maintain. The issue with customizations has always been about the cost of doing them, but more importantly, the cost of maintaining them across upgrades and changes. When you start developing this using higher-level concepts like metadata as opposed to programs, it becomes easier to then maintain those changes and make it more efficient, and also enable the lines of business users to be able to do it themselves, kind of much more end-user enablement.
That basically, something that you've heard for years now, which is the cycle of change, the rate of change is getting higher so that lines of business don't have the luxury of calling IT and IT taking weeks to months to make a change to a business system. Things are moving much more rapidly. How do we enable that? We try to make the balance a little easier in terms of allowing end users or lines of business users to be able to do some of this stuff themselves rather than always having to call on IT. On the right side, you have things that are really useful for the IT organizations. Obviously, enabling service-based delivery, whether it's public or private clouds, platform as a service, basically delivering all of our products in a service-oriented manner, supporting the modern data center architectures with virtualization, consolidation, et cetera.
All of that put together over the last many years, if you look at the market, we are obviously very happy to where we are from a market perspective. We are the number one application server in terms of the analysts. We have over 43% of the market, which is larger than any of our competitors and also growing faster than any of our competition. If you look at the SOA market, which is another important element, again, we are the market leader. We have over 24% of the market and, again, growing very well. The strategy that we put together over the years has really brought us to a point where we are the number one middleware solution in the market. I mentioned the best-of-breed element.
I just want to briefly show you, depending on how you measure it, of course, independent analysts have various mechanisms by which they measure the leading products. We just have a few of those details in terms of Gartner and Forrester, which are two of the respected and very much used by our customers. Every one of the products and individual components is a leader in its category. You don't have to really make a trade-off between, do I want an integrated solution versus do I want the best-of-breed? Just a few examples of the various Gartner Magic Quadrants, as they call it, where we are a leader. They have these four categories, and obviously, the category to be in is the leader category. Most of our products are in those categories. Forrester does these things called Waves. We are a leader in a lot of those different categories.
If you look at our install base right now globally, we are over 100,000 customers. Obviously, a very large, and most big organizations in the world are using some parts of middleware. If you look at Dow Jones 30 or Fortune 100. One comment I'll make here in terms of the 11g product lifecycle. At this point, we are over 1/3 of our customer base is actually using 11g. We've seen actually a pretty robust adoption of 11g. It's been a series of products over the last year and a half. We're very pleased with the adoption of 11g. Just to summarize before we go into the two other topics, for Fusion Middleware, beyond just the products and capabilities, we obviously look at the performance. There are various industry standard benchmarks, which we lead virtually all of them. We look at price performance.
It takes more than just the products to be successful. There's an ecosystem with our partners, a lot of our systems integrated partners, ISVs. We work with a large number of those across the big ones, the big organizations, as well as more boutique, regional, et cetera. Of course, a lot of it is influenced by our developer community. Because it's standards-based, Java-based, we obviously look into it. We look at the huge developer community that is actually using our products. With that, I'll just spend a few minutes on two specific areas, Exalogic and the Fusion application. You've heard over the last couple of years, we've talked about our integrated system strategy. For years, we've been delivering an integrated software stack. With the addition of Sun now, we've extended that to include systems where you have server storage networking.
Exadata has really been the front runner there in terms of an integrated system for database. I'm sure you've heard from us how successful that has been in terms of delivering value and ramping in terms of our adoption. Late last year at OpenWorld, we announced a middleware machine, if you will, called Exalogic Elastic Cloud, which was really a foundation for running all your applications in an integrated system environment. The things we focused on there were around delivering the fastest performance. We're seeing very, very strong results in terms of performance improvements for Java applications. It's a foundation for delivering a cloud platform, which means that you can do consolidation. You can do elastic capacity. A lot of consolidation has happened on the data tier. In the middle tier, there's still been a lot of different systems in place.
We want to provide really a platform where you can do the consolidation. As with other engineered systems, it's really around doing the engineering at Oracle so that we can provide a system that is running out of the box in terms of the cost to deploy, as well as the cost to manage. A lot of our customers, when they build a new system, they have 15, 20, 30, 40-step detailed Excel spreadsheets that they have to go through in terms of everything that they do to build a new system. We kind of shrink it all down to a single or to very few steps because now we've done a lot of that engineering at Oracle where they don't have to do that. Exalogic is really available in various forms, if you will, obviously Intel, as well as SPARC. We provide, obviously, the Oracle Linux system.
It's a highly optimized system for Java applications. It really is a Solaris or a Linux system, so it can run any kind of workload, Oracle applications and other applications. We've done a lot of work to make sure we've done a lot of improvements for Java, and anything that's running Java will see more benefits. There are a lot of benefits for other applications as well. I won't go into all the details, but suffice to say that we've seen some very dramatic improvements in terms of what we can deliver with Exalogic, whether it's for internet applications or messaging applications, which are very much, for example, in financial services, as well as database applications. In addition to these numbers that you see on the screen, which are fairly dramatic improvements, we also have some early adopter customers who are beginning to see similar benefits in real-world applications.
Over the period of the next few months, we'll start talking and sharing some of that information. The integrated system strategy, as has been highlighted by others, is really a game changer in the sense that it provides an integrated or a new way to build data centers between Exadata and Exalogic. Exadata and Exalogic are built around the same architecture with InfiniBand networking and flash memory, et cetera. We are seeing a lot of interest from our customers, particularly the Exadata customers, in terms of the value that we can deliver to the data center with this combination of Exadata and Exalogic. We will provide further improvements on these as we go. This combination is becoming really interesting for a lot of our customers. The other aspect around Middleware that I want to highlight is how it plays as part of our application strategy.
Fusion Middleware for us is strategic for two reasons. It's a very large and successful business, and it's also the foundation for all of our applications development. Not only do we integrate with and provide solutions for the existing applications, PeopleSoft and the Siebels and the E-Business Suites of the world, which are built on proprietary middleware just because that's how applications were built years ago, but Fusion Applications are built on an entirely modern architecture. It's built entirely on Fusion Middleware. What we are telling the world or our customers to do, we are doing it ourselves before them with the thousands of developers at Oracle who are using Fusion Middleware to develop a very, very sophisticated and next-generation application. We work with all of our existing applications and provide value-added solutions. We have a lot of our existing applications customers using middleware.
The interesting thing is around how it's enabling the entire Fusion Applications effort. As you know, Fusion Applications is really bringing some new capabilities in terms of how people look at enterprise applications, in terms of a modern architecture, an integrated business intelligence, in terms of providing all the aspects of social and collaborative computing, and being able to deliver it in the various modes that people wanted, whether it's on-premise or as a service. All of that is being enabled by Fusion Middleware. As I said earlier, we obviously work with all of our existing applications, both our horizontal applications as well as industry applications, and really make it easy for our customers to start creating value-added components, integrating these applications, getting ready for Fusion Applications using middleware because we have, again, as I mentioned, all those areas. All of our applications customers can benefit from that.
To wrap it up, the Fusion Middleware products, again, based on the strategy of providing a complete, open, and integrated system, best-of-breed capabilities, we are the leader in performance. We are the leader in price performance, a big ecosystem around our products in terms of developers and ISVs, and really a lot of very successful customers around the world who've been using it for the last many years.
Thank you, Hasan. Before I turn the call over to David for the Q&A portion of the call, please let me remind everyone that you can submit questions at any time by clicking "Ask a Question" on the left side of your screen. With that, David, please go ahead and start the Q&A.
Great. Thank you, Hasan and Paul. Hasan, that was a great overview of Fusion Middleware. I guess I wanted to talk a little bit about the actual selling of the product. Maybe you can walk us through how the Fusion Middleware sales force goes about targeting customers in general, and then specifically what competitive advantages of Fusion Middleware do you guys stress when you are trying to get WebSphere customers to switch over?
In terms of the first part of the question, which is how does the sales force go about, obviously, we have a multiple set of approaches. We have obviously a very strong install base of database customers, of applications customers, which obviously are using middleware capabilities. We also have a lot of, if you will, greenfield enterprise opportunities where we go in and, in many cases, displace, in many cases, solve new problems for our customers. If you look at middleware adoption a few years ago, when we were early in this business, customers were buying individual components. Somebody wanted a solution for user provisioning. They would look at our user provisioning system and buy it. Over the years, it's really become much more common where people are using multiple components within a product suite, as well as multiple suites.
There are still greenfield opportunities where we go into new organizations where we are basically selling either a suite or a component. There's a lot of upselling that happens in terms of our existing middleware customers because they are adopting more components. They are adopting more of the suites because of the value that they're seeing. Of course, we have our applications customers who have the same requirements, as well as our database customers who obviously, particularly with Exadata and Exalogic, the combination makes it very compelling. Fusion Applications create yet another opportunity because now with Fusion Applications, they are built on the Fusion Middleware product. It creates an opportunity for our customers to now expand usage of Fusion Middleware because they've already got Fusion Middleware as part of the Fusion Applications base. Now they can use it more broadly across the enterprise.
It is a combination, if you will, of our existing strong install base, as well as new opportunities. The second part of your question was around specifically, I think, around WebSphere, how do we differentiate ourselves? Two things I would mention kind of more broadly, not just specifically WebSphere. The heterogeneous strategy that we put together a few years ago is actually very key to be able to go into any enterprise and have a very compelling solution for them. Not everybody can really claim that, that even if you have WebSphere, even if you have other middleware, we can still provide a lot of value-added components and solve interesting and hard problems.
That is one aspect to it, that not everything in terms of our success has been built around you have to replace something else or the other, because we really provide a very strong investment around a heterogeneous solution. We make it much easier for our customers to adopt components, and then as they get more comfortable, as they like what they see, we see a lot more displacements. That is one aspect. The other aspect is kind of on a head-to-head basis. Again, as I mentioned, some of the differentiators, the emphasis that we put around an integrated system and delivering more product innovation. Again, without going into specifics about others, we do not look at our business as dominated by services.
Obviously, we need services to be able to implement the products, but our focus is really around how we can really make the products much more powerful and how we can very quickly provide an integrated solution, even when we make acquisitions. Obviously, everybody has done acquisitions, but if you look at our strategy, it boils down to very quick integration so that we have a single solution, reduce the complexity, and not really have our customers have to pick from three different things and trying to rationalize the multiple products. It is a combination of those two aspects that I think we use competitively.
OK, great. Let me switch gears a little bit to Exalogic. Obviously, there's a lot of buzz around Exadata. Exalogic may have similar potential, albeit with a little bit of a lag. Maybe to get started here, Hasan, let's just kind of review maybe what some of the typical use cases for Exalogic are, kind of the sweet spots where you expect to see stronger interest from customers for Exalogic.
Sure. If you look at the sweet spot, and I'll kind of tell you how it's playing out in the first few months. The sweet spots are the following. Obviously, we have a very large set of WebLogic and Java customers who have a lot of Java applications and are looking for a platform to consolidate. This is actually something that's been happening, albeit a little slower, over the last few years, where the really sophisticated large organizations have started down that path. Exalogic really provides a much easier way to have that consolidation platform. One aspect is anybody who's got a large number of Java applications. WebLogic, obviously, is a very, very popular platform for them to look at how they can consolidate and get a much more efficient footprint, if you will. That's one. The second one is around a single mission-critical application.
Let's say it's an Oracle application where you have a very important application that you want high quality of service levels, et cetera. Running a large ERP system, running a large retail system. That's another area that we see in terms of not so much consolidation, but really focused on delivering a very important aspect of your IT infrastructure on a highly reliable, scalable, available platform. In terms of the combination with Exadata, obviously, a lot of these applications are database applications. We've done a lot of engineering to actually make Exadata and Exalogic really work together very well in terms of providing better high availability, better scalability, better performance.
If you look at the, if I can call it, early adopters, a lot of that actually, and that's great news for us because Exadata has been so successful, the people who have looked at Exadata and seen the value there are immediately seeing the value with the combination. Those are the sweet spots. I think the Exadata combination is really very strong right now. I'd mentioned earlier around Tuxedo, for example. Java applications obviously is one element. If you look at mainframe systems, there's been a move for years where people have been trying to get off mainframes. Redoing the application is very, very difficult. We have customers who don't even have people who know how to change the applications that are running on the mainframe. Replatforming that on an open systems architecture is something that people do want to do without changing the application.
In Tuxedo's case, which we provide a lot of emulation software that makes it easy to take existing applications, Tuxedo has tremendous performance benefits that it's seeing on Exalogic. That's another example, if you will, where you can take areas where you have a large spend on a mainframe system and kind of move it on an open systems type environment without necessarily having to change the application. Basically, the sweet spots are consolidation around the Java applications, both for enterprise customers as well as service providers. I should have mentioned service providers as well. Single application workloads, highly mission-critical applications, and then using the combination of Exadata and Exalogic together to really get the benefits. Also, that's serving as a very good springboard for us because these are the people who've already seen the benefits and are already, if you will, in some sense, converted around the strategies.
That's kind of the early adopter aspect of it.
OK, great. We're also hearing about service providers in particular taking advantage of Exalogic. Can you explain how and why this is the case?
I think it's the same types of benefits that I mentioned. If you look at a service provider, anybody who's building a system has a lot of engineering that has to go into building that system. You have to obviously get the servers, the storage, and the networking all working together. You have to do the performance analysis, et cetera. There's a lot of upfront engineering that happens, whether it's an enterprise or a service provider. With Exalogic and Exadata, we have done a lot of that engineering so that we can now free up a lot of these resources. To be honest, both for some of our even sophisticated IT enterprise customers, that's not a skill that is readily available or not something that they necessarily want to invest in heavily. We give them a springboard, if you will, to now roll in one of these systems.
A lot of that engineering has already been done so they can focus on differentiating themselves and putting their effort on the areas that they can really differentiate themselves in the market. It's the same elements. It's a better performance. It's the engineered system aspect. It's the platform that can provide a consolidation with isolation. Obviously, in an IT environment, isolation is important. In a service provider environment, isolation is even more important because you've got now multiple customers. You don't want them to be stepping on each other, et cetera. Having a platform that provides that elasticity provides a mechanism for them to grow in a much more elastic manner, if you will. Those are all the things that are also attractive to service providers. Finally, the other aspect is imagine any service provider and their product line including a lot of Oracle products.
Not only is it useful for any service provider, but if you are providing any Oracle products as part of your service or are using any Oracle product, now you have the added benefit that we've done the work of integrating and optimizing the Oracle products, all the middleware products that I mentioned, the database, of course, the application. If you are doing more than just infrastructure and actually providing applications, more than likely, you have an Oracle footprint in there as well. It becomes almost a slam dunk because why would you want to do that work when we can do it way better than anybody else?
Right. OK. Let's talk about the different versions. Hasan, in December, you guys announced that you're going to have a SPARC Solaris version of Exalogic on the way, in addition to the existing x86 Linux and x86 Solaris versions. Maybe help us understand why offer SPARC Solaris and really what might prompt customers to implement one version over the others.
You're right. I think it's important to highlight we started out with x86 Linux, x86 Solaris. Solaris is a very important base for us. Obviously, there are a lot of customers who really like Solaris as part of our open strategy, if you will, as well as making sure that Solaris customers are supported. Solaris is a strategic operating system for us. We added that, and then we announced the SPARC system as well. As far as SPARC is concerned, it kind of goes back to the same element in terms of a very loyal base of customers who are standardized on SPARC. SPARC actually has a lot of benefits, which our customers appreciate. If you look at the roadmap that we've laid out for the SPARC platform, there are a lot of new capabilities that we are developing.
Overall, from a price performance perspective, it's actually a very compelling platform in itself. Really, because we have a very loyal and a large customer base interested in running their existing SPARC Solaris applications on that platform, it's just natural for us to look at providing that capability as part of the Exalogic platform as well. Obviously, we are providing systems for SPARC for people to upgrade to, et cetera, that are SPARC customers. Providing an Exalogic platform on the same architecture delivers all those benefits to them and really is something that they would like to see from us. It fits in our strategic direction in terms of continuing to invest in SPARC and Solaris.
OK. I want to talk a little bit about the other parts of the business Exalogic can drag along. With Exadata, we know it's helped drag along some database option sales, like clustering and partitioning. With Exalogic, what other software licenses are needed? Is Exalogic helping to kind of drag along other traditional software sales with it?
Yes, a couple of things. One, and this is somewhat analogous to Exadata as well, there is a new SKU, if you will, as part of Exalogic that you have to buy to run the Oracle product. There is a particular SKU, which is the Exalogic software, let's call it the Exalogic Software, just like we have Exadata Software, which has to be purchased, which is where we have made all the technical improvements to deliver on some of the performance and scalability benefits that I talked about. One, there is a specific software SKU that has to be purchased before you can run any of the Oracle products on top. Now, in terms of the drag beyond that, obviously, a lot of our customers have WebLogic. Once you start looking at consolidation and once you start looking at using Exalogic, it obviously expands the WebLogic footprint in general.
There's a drag from a WebLogic perspective. We are seeing customers also look at moving some of their other applications, like SOA applications, identity management applications, content management, et cetera, on this platform. There is a specific SKU that you have to purchase. Beyond that, as you look at consolidation, as you look at kind of growing your use and standardizing, really, that benefits us because we now have a platform that really helps them standardize. Once they go down the path of standardization, it will inevitably lead to more, or should lead to more software from us because now we are becoming more of a standard platform. Before, we may be used in however much percentage of their IT environment. Beyond a specific SKU, it creates drag for basically everything that runs on top, whether it's our middleware or other applications that we provide.
OK, great. That was very helpful. Hasan, thank you for that. Let me turn it back to Paul.
Thank you very much, David. It looks like you have hit the most common questions that arise. We know everyone's very busy today. I think we're going to wrap up today. Thank everybody for joining us. Also, once again, a very special thank you to David Hilal for moderating the Q&A portion of the call and asking those most common questions that investors have. If anyone has follow-up questions, please contact the Investor Relations team here at Oracle. Thank you all again for attending. This concludes our call.
This concludes today's webcast.