But hardware products and support continued their revenue decline. They brought in $1.3 billion, down 16% since the same fiscal quarter last year, according to Oracle’s filing today with the U.S. Securities and Exchange Commission. Profit on the hardware side was down from $745 million to $727 million since last quarter, and down from $849 million in the same quarter last year.

In a statement, CEO Larry Ellison said that engineered systems like Exadata and the SPARC Supercluster will “drive growth in our hardware business” by the end of Oracle’s fiscal year, which is mid-2013. It’s a statement he has repeated since this summer.

Ellison and other execs will be holding a conference call on the earnings later today.

On the database front, we’ll be looking for any hints about when Oracle Database 12c will be released. The next version of the Oracle Database has been in beta version for a while now. Earlier this year Ellison said that Oracle Database 12c might be released in December or January. Then a statement Sept. 4 regarding Oracle’s support for Intel Itanium-based platforms said that “version 12c of the Oracle database” is “due out in early 2013.” At the same time, there are rumblings that, at the very least, details about 12c could be released at Oracle OpenWorld, which starts Sept. 30. On a side note, if you’re beta testing 12c, email me at mfontecchio@techtarget.com. If you’re not, email me anyway and give me your wish list for 12c.

On the applications front, we will hopefully hear some details on the uptake of Fusion Applications. The next generation of Oracle applications has been generally available for almost a year now, and so Oracle is expected to talk about how successful they have been.

Finally on the hardware side, we will likely hear more about Oracle’s integrated systems. Oracle executives said at the last earnings call that hardware will start to become a “growth story” in this fiscal year, so we’ll see how that has done. We’ll expect some possible talk about the Oracle Database Appliance, which was geared toward medium-sized businesses looking for an integrated database device. There may also be some hints or details about Oracle’s future hardware plans, whether that be the next generation of Exadata or some other new integrated hardware platform.

First, they announced their first scalable, entry level tape library, the Oracle StorageTek SL150. It’s targeted at small-to-medium sized businesses with remote offices, and will be replacing SL24, SL48 (which were both entry-level libraries) and the SL500 (which was midrange). The tape hardware is StorageTek, but the SL150 runs on Oracle’s Fusion Middleware Software. It’s also designed so end users can install it themselves. This is an exciting development in both the midmarket and storage parts of Oracle’s business.

In other news, Oracle released 78 security patches as a part of its Critical Patch Update (CPU) advisory for July, and the general consensus seems to be that it was about time. Of one of the vulnerabilities in Oracle JRockit, Marcus Carey, security researcher at Rapid7, said, “This is like a perfect storm… You can access it over multiple protocols, and it opens you up to remote exploits without a password. It can be accessed across the network unless there is an access controller in the middle to block the attempt. And, the attacker can get control over the full range of data. So this would, in essence, be ‘game over.’”

So, you heard it here- If you don’t want your game to be over, download those security patches! Oracle usually deploys its security patch updates every three months; the next one is expected in October.

Also, Oracle published the results of a study they did where they found most organizations are woefully unprepared for the deluge of big data many companies are experiencing. The study was based on a survey of 333 American and Canadian C-Level execs from 11 different industries. On a whole, the public sector, utilities and healthcare were the least prepared, while communications, manufacturing and retail leaders generally reported feeling fairly prepared.

Well, it’s been another exciting week, with mostly good, upbeat news for once. Don’t worry, folks- This is Oracle, it can’t last for long.

First, a few quotes from the call.

“The pipeline for Exalogic is building rapidly with customers building out their private clouds with both Exalogic and Exadata,” President Mark Hurd said. Regarding Exadata sales in the last quarter, Hurd said it was “pretty broad-based. There were a good number of quarter-racks in the quarter, which we look at as very positive in terms of seeing the future. We did see some adoption of (Exadata V2-8) in the quarter.” Finally, Hurd said this about Exadata: “It’s just good stuff. There is no secret here. The stuff works.”

In the U.S. Securities and Exchange Commission (SEC) filing Oracle filed for the quarter, it showed that Oracle’s hardware revenue increased 263% year over year. Wow, that seems great, doesn’t it? I guess, but you have to remember that it compares to the same quarter last year. That quarter was a time of turmoil, when Sun was on its last legs and Oracle had just acquired it.

As it turns out, the most recent quarterly hardware revenue numbers are the lowest Oracle has had in the last four quarters. Take a look at this chart I put together using SEC filings. It looks at Oracle hardware revenues, expenses and profit over the last four quarters (click for full-size):

As you can see, hardware revenues are down. But hardware profits are up. Why? Because Oracle has slashed operating expenses on the hardware side, both with systems and support. Over the last four quarters, Oracle hardware revenue has gone down 9%. But hardware expenses have dropped almost 23%. The result? Hardware profits are up about 6.5% over the last four quarters.

Now those are total hardware revenues. Oracle isn’t just selling Exadata and Exalogic. It is still selling commodity x86 and Sparc servers. And Oracle doesn’t break down the numbers specifically enough to know what servers are selling and which aren’t. So it’s possible that Exadata and Exalogic are selling while their commodity x86 and Sparc hardware are dive-bombing.

What we do know is that Oracle’s hardware revenue overall has declined over the last year. For more perspective, check out my colleague Barb Darrow’s post about how Oracle hardware remains a mystery over at the Channel Marker blog.

The Service Industry Association, a group made up of about 130 hardware maintenance providers, is calling Oracle’s hardware maintenance policies anticompetitive and has filed an appeal with the U.S. Department of Justice (DOJ).  The DOJ gave Oracle the green light for the Oracle Sun acquisition last year, and the European Commission approved the deal in January after assuring that fair competition would be preserved in the market.

But the SIA has a different view.  It claims that Oracle is abusing its dominant market position with its new hardware maintenance policies, especially in regards to the $2.4 million of Sun maintenance business contracted to Independent Service Organizations (ISOs).  ISOs are now prevented from servicing the hardware break-fix needs of its Sun hardware customers, it claims.

Alleged anticompetitive practices of Oracle by the SIA include:

• Oracle restricts access to its operating systems only to those users with existing hardware maintenance contracts.
• Oracle has enacted “Return to Oracle” service restoration fees for those who use an ISO but then later return to Oracle support.
• Those using ISOs cannot split their service requirements between the ISO and Oracle, and Oracle will not support any of an ISO customer’s Sun hardware.

In other news, Oracle has filed a lawsuit of its own against a hardware partner, Multis. Multis had a contract with Sun Microsystems when Oracle purchased Sun, and its contract involved services related to remanufacturing Sun technology, such as product refurbishing and distribution.

Multis has had three burglaries at one of its warehouses since July 2009, and now Oracle is seeking damages of at least $328,742. The software giant is claiming its partner did not have insurance to cover the losses from the thefts, and according to their contract, Multis is liable for the product losses and damages from the burglaries.

     Reuters photo

Reuters posted a lengthy and detailed story on Oracle and Larry Ellison today. As usual, whenever someone talks to Ellison, there is plenty of dirt. In this story, Ellison dishes on former Sun CEO Jonathan Schwartz, basically saying he wasn’t a good CEO, and forecasts the future of Oracle hardware.

Ellison criticizes Schwartz at length in the story, saying he spent too much time on his blog and not enough time managing the company correctly.

“The underlying engineering teams are so good, but the direction they got was so astonishingly bad that even they couldn’t succeed,” Ellison told Reuters. “Really great blogs do not take the place of great microprocessors. Great blogs do not replace great software. Lots and lots of blogs does not replace lots and lots of sales.”

Ellison added that the sales deals Sun made — and the commission structure around them — were often nonsensical. In some cases, Sun would lose $1 million on a deal. And the salespeople were making commission on the size of the deal, rather than the size of the profit.

This, of course, is no surprise to any Oracle watchers. Oracle has always been about extracting big profit margins whenever and wherever it can. That explains the reason why Ellison and Oracle are pushing Exadata and Sun’s Sparc-based servers over commodity x86. It makes more money, even in a declining Unix market.

Ellison details why Oracle dropped Sun’s “Rock” processor, a yearslong project that encountered multiple delays and never got off the ground. According to Ellison, it ran too slow and ran too hot, and was basically a time and money sink.

“It was so hot that they had to put about 12 inches of cooling fans on top of it to cool the processor,” Ellison told Reuters. “It was just madness to continue that project.”

Ellison said Oracle would be “pruning” down its x86 server line and will continue to push its stack strategy hard. It plans to unveil more Exadata-like products this fall at Oracle, including one that includes the yet-to-be-released new group of Fusion applications. It already announced Exadata 2 last year, a Sparc-based box built for data warehousing and OLTP. Whether it succeeds is a question, as it only sold about 20 of its previous HP-based Exadata appliance.