California-based Oracle Corp. is placing its bets on its higher-end servers, and the gains are starting to show. A 12 percent increase in earnings of $8.4 billion was recorded in the opening quarter, with gains of $1.8 billion.

Solid results in brand new software programs purchases and a rise in license updates and support services revenue are chiefly credited with the boost, but double-digit sales gains for its high end servers also played a part. The numbers was just higher than experts' predictions of $8.35 billion.

The corporation has been shifting point of focus away from lower end server systems toward higher-end equipment including the Sun Sparc M4000 servers subsequent to a decline in hardware revenue after the purchase of Sun Microsystems in last year.

Fighting Dropping Revenue

The Sun purchase had caused hardware numbers to drop. Hardware numbers in the 1st quarter were $1.03 billion, a decrease in 5 % from the same quarter last year. There was, nonetheless, expansion in the main Sparc servers line.

Oracle executives recognized that high end hardware systems, such as the Sun Sparc M5000, rose in the double digits for the opening quarter, while x86 server sales maintained their decline, evidence that validates a shift in focus to high end merchandise. Senior leadership said they were not worried concerning the drop in low-end hardware sales and that the point of focus would proceed on premium solutions.

Reason For Changing Sun Servers Point of focus

Upon buying Sun Microsystems, Oracle explained it didn't propose to to compete in the area of lower end server systems but instead focus on higher-end servers, such as the Sun Sparc M4000 and Sun Sparc M5000 servers.

Separate from declining sales for those systems, a big explanation for Oracle not to continue vying to contend for lower end server business is that to have a payoff a robust sales volume is essential. With other hardware leaders like Dell and Hewlett-Packard currently competing in the low-end system market, the chance of rising sales volume to large sufficient numbers to make a profit is a great deal decreased.

High End Sun Servers Being Targeted

Amongst the high-end Sun servers Oracle is moving to are the M-series Sparc servers, including the M3000, M4000, M5000, M8000 and M9000. This series of variable Sun servers is designed for advanced enterprise applications. Oracle's other high end servers are Exadata and Exalogic.

New Sparc servers are on the horizon, too, as part of the shift away from low-end servers, such as x86 servers, to premium products. When reporting earnings for the first quarter, Oracle furthermore reported further revamping of its higher end line, like a new Sparc microprocessor and Sparc Supercluster server.

Oracle officials have said they expect hardware revenues to continue to increase as the specialization in top-notch systems is boosted, over time letting the company get back to the profits it enjoyed previous to buying out Sun.