The software giant’s chief executive on Tuesday unveiled a set of midrange and high-end server systems, powered by a faster version of the Sparc microprocessor line invented by Sun. Oracle said the new systems are much speedier in running an array of applications, including Oracle databases and Java software, and are up to ten times faster than the similarly priced Oracle system it replaces.

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In a conference call yesterday, CFO Safra Catz blamed the problems on issues with sales execution, due in part to all the sales people Oracle has hired in recent months: “Since we’ve been adding literally thousands of new sales reps around the world, the problem was largely sales execution, especially with the new reps, as they ran out of runway in Q3,” Catz said on the call. “As expected, many of the pushed out deals have already closed.”

Analysts today seemed willing to take that explanation at face value. “While the sales execution excuse is hardly bulletproof, we side with Oracle on this one and conclude that the issues are largely internal and can be addressed relatively quickly,” wrote BMO Capital Markets analyst Karl Keirstead in a note to clients today. “We haven’t picked up signs of a February lull in enterprise IT spend.”

Brad Reback of Stifel Nicolaus agreed. “We think the issue was not macro, competitive or product related, but due to training and productivity issues with new sales hires and their inability to close enough ‘bread and butter’ deals,” he wrote in a note today.

However, it’s hard to gauge how much of today’s decline is the result of the quarter’s results, and how much can be attributed to chatter that Oracle President Mark Hurd might, in one scenario, be tapped to run Dell.

Yesterday, Fortune reported that the private equity firm Blackstone Group is mulling a competing bid against Silver Lake Partners and Michael Dell to take that struggling computer company private. In the event that Blackstone were to win the bidding process, it would, the story goes, want Hurd for the CEO job there.

Hurd, whose previous job was running Hewlett-Packard, where he earned a reputation as an aggressive cost-cutter, hasn’t signaled his interest in such an outcome either way. But today The Wall Street Journal reported that Blackstone was in talks with GE concerning a bid on Dell’s financial services unit, meaning that the chatter about Hurd running a Blackstone-owned Dell might be just that — chatter.

Earnings on a per share basis were 65 cents on revenue of $9 billion. That’s a penny short of the consensus view of 66 cents and $400 million shy of the $9.4 billion in revenue that analysts surveyed by Thomson Reuters had expected.

Oracles shares fell 6 percent quickly in after-hours trading. The shares closed up slightly at $35.75 during the regular session.

It looks like there are a lot of reasons for the miss. New software licenses fell by 2 percent, which is completely not what was expected from many analysts, some of whom had predicted new licenses to grow by more than 7 percent.

Hardware sales also continued to fall. Oracle acquired Sun Microsystems in 2010, and has been seeking to rebuild its hardware business with a line of new systems that in time are expected to overtake dwindling sales of the commodity systems. Obviously that hasn’t happened yet, as hardware system sales fell 23 percent year on year to $671 million. Hardware support revenue fell by 6 percent.

Oracle also said that without the currency impact owing to the strong U.S. dollar versus foreign currencies, its per-share earnings on a GAAP basis would have been better by a penny.

Update, 1:58 PM: Oracle shares are now down by more than 7 percent to $33.10 after hours. Another thing that may be weighing on the stock is this story from Fortune concerning Dell and private equity fund Blackstone. Blackstone is seriously weighing a move to bid against Dell CEO and founder Michael Dell and his private equity partner Silver Lake. Additionally, the story says that Blackstone would like Oracle president, and former Hewlett-Packard CEO, Mark Hurd to run Dell if it were to prevail in such a bid. I’m hearing from sources familiar with the matter that Blackstone has indeed been in touch with Hurd.

Here’s Oracle’s original announcement. I’ll have a little more to say as I take a closer look at the numbers.

Oracle Reports Q3 GAAP EPS Up 6% to 52 Cents; Q3 Non-GAAP EPS Up 5% to 65 Cents

Cloud Software as a Service Revenue Up 111%, Trailing Twelve Month Operating Cash Flow of $13.7 Billion

REDWOOD SHORES, CA–(Marketwire – Mar 20, 2013) – Oracle Corporation ( NASDAQ : ORCL ) today announced that fiscal 2013 Q3 total revenues were down 1% to $9.0 billion. New software licenses and cloud software subscriptions revenues were down 2% to $2.3 billion. Software license updates and product support revenues were up 7% to $4.3 billion. Hardware systems products revenues were $671 million. GAAP operating income was up 1% to $3.3 billion, and GAAP operating margin was 37%. Non-GAAP operating income was down 1% to $4.2 billion, and non-GAAP operating margin was 47%. GAAP net income was unchanged at $2.5 billion, while non-GAAP net income was down 1% to $3.1 billion. GAAP earnings per share were $0.52, up 6% compared to last year while non-GAAP earnings per share were up 5% to $0.65. GAAP operating cash flow on a trailing twelve-month basis was $13.7 billion.
Without the impact of the US dollar strengthening compared to foreign currencies, Oracle’s reported Q3 GAAP earnings per share would have been $0.01 higher at $0.53, up 8%, and Q3 non-GAAP earnings per share would have been approximately $0.01 higher. Total revenues also would have been 1% higher and new software licenses and cloud software subscription revenues would have been 2% higher than reported.
“Our non-GAAP operating margin increased to a Q3 record of 47%, and we expect it to reach an all-time high for the fiscal year,” said Oracle President and CFO, Safra Catz. “Both operating cash flow and free cash flow were at record levels for a Q3, with operating cash flow of $13.7 billion over the last twelve months.”
“The Oracle Cloud is the most robust and comprehensive cloud platform available with services at the infrastructure (IaaS), platform (PaaS) and application (SaaS) level,” said Oracle President, Mark Hurd. “In Q3, our SaaS revenue alone grew well over 100% as lots of new customers adopted our Sales, Service, Marketing and Human Capital Management applications in the Cloud.”
“This month we will begin deliveries of servers based on our new SPARC T5 microprocessor: the fastest microprocessor in the world,” said Oracle CEO, Larry Ellison. “The new T5 servers can have up to eight microprocessors while our new M5 system can be configured with up to thirty-two microprocessors. The M5 runs the Oracle database 10 times faster than the M9000 it replaces.”
Q3 Fiscal 2013 Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 2:00 p.m. Pacific. You may listen to the call by dialing (913) 312-6699, Passcode: 591704. To access the live webcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. In addition, Oracle’s Q3 results and Fiscal 2013 financial tables are available on the Oracle Investor Relations website.
A replay of the conference call will also be available by dialing (719) 457-0820 or (888) 203-1112, Passcode: 1437646.
About Oracle
Oracle engineers hardware and software to work together in the cloud and in your data center. For more information about Oracle ( NASDAQ : ORCL ), visit www.oracle.com or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.

The Oracle CEO and multi-billionaire announced this morning he has purchased Island Air, an airline that travels between the Hawaiian islands. Last year, Ellison purchased the vast majority of the island of Lanai, off the coast of Maui.

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Acme is based in Bedford, Mass. Oracle’s purchase gets it into the business of selling gear for things like videoconferencing and IP calling. Acme sells both to service providers and to the enterprise.

All in, the deal is worth about $2 billion, but comes in at $1.7 billion net of Acme’s cash, which stood at $363.4 million at the end of its most recent quarter.

It’s Oracle’s first acquisition of 2013. Last year it made 11 acquisitions, the biggest of which was Taleo, the maker of human-resources software that runs in the cloud, for which it paid $1.9 billion.

In the 15 months since that conversation, SAP has been on the move. HANA is not only done, but all of SAP’s primary applications are running on it. SAP has pivoted from running all of its applications in an old-school on-premise fashion to offering them both in the cloud and on premises, or on a mixed hybrid-cloud basis.

It also made a significant acquisition of SuccessFactors, the cloud-based human capital management (HCM) company. SuccessFactors is now a significant business unit within SAP, and includes all of its previous HCM software assets, and it competes with that market’s fast-moving cloud player, Workday.

Last week, SAP hosted a global launch event to announce that the three-year effort to convert its entire suite of business applications to the cloud — and to the HANA architecture — was complete. It also provided me an opportunity to catch up with McDermott in New York. Here’s a sample of our conversation:

AllThingsD: Bill, the last time we talked about HANA, you hadn’t quite moved all your primary applications over to it. It’s not exactly a huge piece of your business yet, but let’s start there. How is HANA coming along?

McDermott: We have 1,000 customers on it now, so it’s growing really fast. The last update we gave, we indicated that we think it could be a half-billion U.S.-dollar business, which would make it the fastest-growing software product in the history of the world. So it’s big.

The last time we talked, you hadn’t quite moved all your applications over to HANA. The big one that was missing was the Enterprise Resource Planning piece. Can I assume that part of the news today is about that process being completed?

That’s exactly it. The big news today is about the whole SAP suite being moved over to HANA. All the things that the business suite does — how you manage your supply chain and manfacture your products and get them to market, how you manage your people, how you manage your customer relationships, everything around you in that whole end-to-end value chain — runs in what we call the business suite. And we go to market with that suite in 24 industries, small, medium and large, all over the world. Now that whole suite runs on HANA.

For the benefit of people who struggle with the idea of what the software actually does, can you give me a good example of who uses it, and how?

We work with this company HSE24, it’s like a QVC in Europe. They are selling product on television, there’s a meter at the lower right-hand corner of the screen telling you how many of that item are left. That’s run on SAP software. When you call in to the call center, they already know from the sensors on the social networks, via HANA, what you’re likely to want. And then they can also do the upsell and the cross-sell. One of the customers that is going to be featured today is John Deere. We’ll talk about how they can, based on usage history and patterns, provide preventative maintenance on the things that will need it the most.

There’s obviously more to it than simply running existing processes faster and cheaper and more efficiently, right?

The wild part about all this is sort of like this: No one could have predicted that Disney would become the Disney we know today when Walt drew a picture of a mouse. What you have is the limitless potential. CEOs have the ability to rethink business models, based on having the speed and the insight and the simplicity to truly change how they run their companies and transform industries. You and I fly too much, and sometimes flights get canceled. It happens. If I have to get out of Moscow and get back to New York, the airline can charge me more. If my original flight is canceled, and I’m on the line with three other people, you can get more money out of me. Dynamic real-time pricing can transform the airline industry.

Is this all the result of intelligence you’ve brought from the applications themselves, that are getting a new benefit from being run in-memory on HANA?

There are two ways to look at it. The in-memory architecture makes it fast, and simplifies it. The application makes it so smart. You’re combining transactions and analytics. And you’re also doing things we like to call “extreme applications.” You may be a big consumer products company, and you have trade promotions that go to different stores in different geographies. If you ask them how it’s going at a particular store in Brazil, they will have a hard time answering unless they’re using HANA, because it captures all the transaction data. They know exactly who’s buying what, and using which promotion or deal.

Talk to me about the competitive landscape. Oracle CEO Larry Ellison loves to lob verbal grenades at you from time to time. Care to lob one back?

In the old days, the answer would have been yes. What’s happened is that we take it a compliment when people try to spread fear, uncertainty and doubt. It’s a sign they’re worried. But they don’t have to be, because we’re open, and our most important mission is to make customers happy and fulfill their ambitions. We’re fully cooperative with Oracle, with IBM and with Microsoft. So, anything that a customer chooses to do with one of them, they can continue to do it, and we are highly supportive of that.

Obviously, SAP’s applications can now run optionally in the cloud or in a mixed environment. But the pure-play cloud companies like Salesforce.com and Workday are certainly showing some strength. What sort of competitive threat are you seeing from them?

I think SAP has responded in the cloud. SAP Cloud will take care of your customers on-premise or on-demand. We announced SAP Customer 360, and it runs on HANA. So it’s real-time, it’s predictive, and it’s in memory. If you want to buy it on a public cloud on a subscription basis like Salesforce, we now have it. Once people realize it’s running on HANA, we’re going to have an advantage. Salesforce has done a good job of building a large cloud company, but they have done it on an old architecture. You can’t do real-time analytics on the Saleforce.com platform. That’s a big Achilles’ heel. On talent, Workday is a good company, they built a good HCM solution. We bought SuccessFactors, and then we took all the assets of SAP’s existing HCM application and put them under SuccessFactors. So now, as it relates to people, wait until you see, in June, the list of companies who are running SuccessFactors. Workday had a great opportunity to go in where there was no competition, and we didn’t have a response. We had HCM, but it was all on-premise. The market wanted talent in the cloud. Now they are going against us, and there’s a lot of competition.

The marketing software concern for which the software giant will pay $871 million might have also made a logical fit at Salesforce.com, though Salesforce might have had to take on some debt to pay that price.

Anyway, there’s speculation that today’s deal for Eloqua may amount to a starting gun for a new round of acquisitions in the cloud software space. In a note to clients today, Karl Keirstead, an analyst with BMO Capital Markets, argues that Salesforce may answer Oracle with some acquisitions of its own.

“In our view, the deal is a modest net negative for Salesforce.com, making it incrementally tougher for them to pick off Oracle’s Siebel client base,” Keirstead wrote this morning. He also believes that about 50 percent or more of Eloqua’s customers are also Salesforce.com customers.

That might spur Salesforce into action on the acquisition front, he says. Having already made significant acquisitions of Radian6 and Buddy Media in the last two years, Salesforce might move on two privately held cloud-based companies in the marketing field.

One is Marketo, a fast-moving company that specializes in revenue performance management. It raised $50 million in a Series F round led by Battery Ventures last year, bringing its total capital raised to $108 million. Its other investors include Institutional Venture Partners, InterWest Partners, Mayfield Fund and Storm Ventures.

Another possible target for Salesforce, Keirstead argues, is HubSpot, a social media marketing outfit based in Cambridge, Mass. It raised $35 million in a fifth round of funding last month. The round brought its total capital raised to about $101 million, and Salesforce had invested in earlier rounds. Its other investors include Google Ventures, Sequoia Capital, General Catalyst Partners, Matrix Partners, Altimeter Capital and Cross Creek Capital.

The point, Keirstead says, is that Salesforce will seek to build its own “marketing cloud” offering. Of course, Salesforce doesn’t have the financial flexibility that Oracle does. It has only $1.4 billion in combined cash and short- and long-term investments as of the close of its most recent quarter. That’s almost pocket change compared to Oracle’s $34 billion as of the quarter reported earlier this week.

Asa Mathat / AllThingsD.com

The results were better than expected. Earnings on a per-share basis were 64 cents, three cents above the consensus of 61 cents. Sales were $9.11 billion, beating the consensus estimate of $9.03 billion.

As usual, we’ll be listening for hints from Oracle on the state of overall IT spending, which could have important implications for other companies, including Hewlett-Packard, SAP and IBM.

Also, though much of Oracle’s corporate legal dramas with HP and Google have quieted for now, it’s possible that CEO Larry Ellison will have some colorful words about his various competitors.

Update: The call is now over and you can read my abbreviated transcript below. (Sorry, I joined late.) A few highlights: President Mark Hurd declared that Oracle plans to hire more sales people, and to do so fairly aggressively. Ellison reminded the analysts on the call that the surge in hiring has been done without adding much to the expenses. CFO Safra Catz said that sales to federal customers are healthy despite the worries about the federal budget’s “fiscal cliff” that is looming at the end of the year.

2:18 pm: Joining late after a technical foul-up. The Q&A session has already started.

2:19 pm: Question from Merrill Lynch about growth rates of Exadata. Are you tracking closer to the billion-dollar run rate? Also, any changes in customer behavior in regards to the fiscal cliff?

President Mark Hurd: We’re changing nothing. Generally speaking, that’s the trajectory we’re on.

CFO Safra Catz: We’re having a wonderful December so far. People are wanting to spend their budgets. I can tell you our federal customers have been spending money with us even in December.

Question from Wells Fargo: Sales performance and productivity. There were changes in headcount and software licensing. Curious about productivity ramping for net new hires and heading into Q4.

Hurd: Without making too many forward-looking statements, in general we feel great. We’re hiring the best people in the industry and getting them ramped and oriented to sell and beat competition. We’ve lined up our sales force against the secular competitors and trained them to be experts in their products. We don’t expect them to be very productive for the first twelve months. If they are productive, that’s gravy. We feel great about the talent we’re attracting and we feel great about getting them inside. And we’re still hiring.

CEO Larry Ellison pipes up: We’re also hiring in BI (Business Intelligence).

Ellison: Mark and his team have done an extraordinary job of ramping the sales force without increasing the cost. We’ve kept expenses pretty close to flat. We’re going to keep doing that for the next 18 months. We’re going to add to capacity without adding expense.

Question from Goldman Sachs: Given all the enhancements you’ve made with Fusion, can you speak to attach rates of add-ons? Also, given successes you’re seeing in the cloud subscription line, how does that affect the growth rates?

Hurd: Our attach rate, we look at it over a number of years. In the quarter, we had a significant number of logos where we closed a module. It’s a core part of our strategy. (He’s talking about selling additional software modules that work with different software apps.)

Here’s one key bit of news that occurred before I joined the call: “Oracle said it expects new license software revenue growth in the range of 4 percent to 14 percent on constant currency basis and 3 percent to 13 percent in reported dollars. Hardware product revenue growth is expected to range from a negative 10 percent to flat in constant and reported dollars.”

Question about a year-end budget flush.

Catz: Folks wanted to close deals in November and they want to close deals in December. No impact on pricing.

2:30 pm: Ellison is speaking a bit about Oracle 12c and the cloud. He mentioned Salesforce.com as a customer. He says it’s also appropriate for customers building private clouds. The key feature he says is that 12c moves multi-tenancy into the database layer.

Catz: Our customers who are paying for license updates are entitled to the product. Over time they will update to it over a number of years. It will make us more competitive.

Hurd: We had good solid growth in every region in the database business.

Final question from Stifel Nicolaus: Give us some color on increases in coverage in vertical businesses.

Hurd: We put a lot of effort into our verticals. Those are discussions we’re having at the CEO level. The implications are huge. We’ve invested a lot of R&D. We feel great about our position in communications, and in retail. We’ve made big investments in financial services, not just in product, but scaling out the sales force.

And that wraps up the call.

While it’s true that Oracle has fared better than most of its rivals amid a crash in global IT spending, analyst Brendan Barnicle of Pacific Crest Securities in Portland, Ore., argued in a research note to clients last week that analysts may have set the bar a bit high. He expects EPS of 60 cents and sales of $8.94 billion. “In checks, we heard about more large deals than we have in the recent past. Nevertheless, it is likely that macro uncertainty made it difficult to close all the deals. Therefore, we expect November quarter results generally to be in line to slightly lower than consensus,” he wrote.

On top of that, he thinks the outlook for the quarter ahead is too aggressive, given the state of the world economy. “Oracle has a clear practice of guiding conservatively, and in the current macroenvironment, we expect the same,” Barnicle wrote. With that in mind, he thinks the current consensus that calls for earnings of 66 cents on sales of $9.3 billion is a little too high.

Even so, Barnicle expects mostly positive news from Oracle today. With the shares trading at $32.43 this morning, up more than 26 percent this year, he still thinks there’s room to grow. His price target is $36.

Michael Dell said in an interview with the U.K.’s Sunday Telegraph newspaper that Autonomy was shopped to Dell before it wound up in the hands of Hewlett-Packard in 2011.

Dell, CEO of the personal computer and IT concern that bears his name — a company that has been aggressively acquiring software companies in recent months — said he was approached by Autonomy. He passed on the opportunity because it was, in his words, “obviously overpriced.”

The story doesn’t go into any detail about how Dell was approached or when, but it raises some eyebrows for a few important reasons, none of which are entirely helpful to former Autonomy CEO Mike Lynch’s version of events.

On the other hand, it doesn’t make HP’s management team at the time, including former CEO Léo Apotheker and then-director now-CEO Meg Whitman, look any smarter in hindsight.

Recall that Oracle CEO Larry Ellison made a similar claim about passing up on an approach by Autonomy. It’s a sensitive topic because as a British company, it would have been illegal for Autonomy to be “shopping” itself around to potential buyers without first disclosing the fact to shareholders, though rumors that it was in play had been making the rounds since late 2010.

Lynch initially denied Ellison’s version of events, only to have Oracle produce not one but two sets of PowerPoint slides produced by investment banker Frank Quattrone, slides that looked an awful lot like they were intended to help make a deal. Quattrone conceded after a bit of PR back and forth that he had been quietly pitching Autonomy to Oracle as a potential acquisition independently of Lynch.

It’s not clear in Dell’s version of events if Quattrone was involved. I reached out to him this morning and he declined to comment any further.

But here’s why it all matters: While Oracle and Dell might indeed have not been interested in Autonomy, the mere mention of meetings with Dell and Oracle to HP’s then-CEO Léo Apotheker might have had the effect of pushing up the price for Autonomy.

Think about it: Autonomy’s advisers had every motivation to do what they could to drive up the price and make the company seem as valuable as possible. The mention of a whiff of interest from Oracle and Dell, combined with rumors that were already in the water that Microsoft, too, was interested (and which goosed Autonomy’s share price), might have stirred fears of a bidding war. This might in turn have spurred HP to make the rich offer of $11 billion and change that it did. It eventually conceded that Autonomy was worth $5 billion less than it paid for it.

And that only makes Apotheker and his deal team look sillier now than they already did.

Of course, once the offer was on the table, U.K. laws made it all but impossible to walk away, even if the price seemed high after the fact. And so here we are.

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Asa Mathat / AllThingsD.com

You may recall a brief PR kerfuffle in which Oracle disclosed that it had been approached by investment banker Frank Quattrone, who was, as some people have it, shopping Autonomy around for a possible acquisition. Some people, including Quattrone and Autonomy’s founding CEO Mike Lynch, wouldn’t call it “shopping around” because it would have been illegal to “shop around” a U.K.-based company under that country’s securities laws without disclosing the fact to shareholders. But we’re getting ahead of ourselves here.

Remember, however, that in the wake of HP’s move to acquire Autonomy, Ellison said that at something north of $11 billion, HP had paid an “absurdly high” price, and cattily followed that by saying that Oracle had “taken a pass” on Autonomy.

Lynch, in an interview with The Wall Street Journal days later, said that no such overtures to Oracle had ever been made.

Oracle, just to set the record straight, mind you, with absolutely no other agenda in mind, fired back that Lynch apparently had a bad memory and had forgotten about a meeting, indeed a pair of meetings, involving Hurd, Lynch and Quattrone and some PowerPoint slides.

“Oh, you mean those slides,” Lynch said. No, he didn’t really say that, but he might have. Anyway, at that point, Lynch clarified that he had indeed accepted an offer to meet Hurd to talk about database technologies but he was “not there to sell anything.” Okay, then.

Again, just to clarify the record and nothing else, Oracle dug through its files and found the PowerPoint slides from at least two meetings that Lynch and Quattrone had held with Hurd. Quattrone owned up that the slides were his and that the idea had been to pitch Autonomy to Oracle independently of Lynch or Autonomy “as an idea.”

Autonomy had already been the subject of repeated rumors about a nonexistent bidding war for the company that had Oracle and Microsoft wrestling over it. And the meetings at Oracle took place in early 2011 after those rumors had been in the water a little while.

So yesterday’s disclosures by HP certainly put an exclamation mark on a back-and-forth between Oracle and Lynch that had simply quieted but not concluded.

Which brings us to those slides. What’s in them? Some interesting nuggets for sure, but there are no smoking guns concerning Autonomy’s alleged cooking of the books prior to HP’s announcement that it would acquire the software firm on Aug. 18, 2011.

On one slide we see Autonomy’s revenue mix as of early 2010. (Click to make bigger.) Note that the IDOL Product that makes up the blue slice of 29 percent of sales is the “hardware product” that in HP’s telling is the one sold either at a low margin or at a loss in some cases. Those allegedly improper bookings, HP says, amounted to 10 percent to 15 percent of Autonomy’s overall sales, and would otherwise be about half the size shown here.

In another slide we see Autonomy’s revenue and enterprise value as of January 24, 2011 — less than six months before HP’s acquisition — converted to U.S. dollars and compared against other notable software companies. Autonomy is valued at about $5.7 billion, or a little less than six times revenue. Six months later HP would pay nearly twice a much, which struck pretty much anyone paying attention as odd if only for the timing of the deal. Now HP says it paid about $5 billion too much for Autonomy and that amount lines up almost exactly with the increase in Autonomy’s valuation from this point. Coincidence? Maybe. But, interesting! (Click to see it bigger.)

And here we see a list of names of both Autonomy senior executives and members of its board of directors. As yet there’s no indication who it was from within the ranks of Autonomy who came forward to HP after Lynch’s dismissal from HP by CEO Meg Whitman, and so there’s no way to know if this person’s name appears here. Also, Autonomy’s former directors will almost certainly be contacted by both the U.S. Securities and Exchange Commission and the U.K.’s Serious Fraud Office. (Click to see it bigger.)

If you want to read those slides in their entirety yourself, here they are, via Scribd.

Autonomy Presentation 1 503341

Autonomy Presentation 2 503342

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The offering is expected to raise upward of $591 million, and it should command a market capitalization of about $5 billion after trading of its shares begins on the New York Stock Exchange.

The company specializes in human resources software that runs in the cloud, and has a lot of buzz owing much to the story of its origins. Co-founders and co-CEOs Aneel Bhusri and Dave Duffield ran PeopleSoft, a human resources software concern that was targeted for a hostile takeover by Oracle and its CEO Larry Ellison in 2005.

A lot of people have focused on Workday as being something of a revenge project for Bhusri and Duffield, but the pair have tended to dissuade that view. “We don’t think about Larry or have any animosity. …You have to bless Larry’s heart for giving us this opportunity. I would never have been part of this Workday thing without Larry,” Duffield told Bloomberg Businessweek over the summer.

But it’s clear that Ellison has been thinking about Workday. He never misses a chance to disparage it, as he did at D:All Things Digital in June. And according to a count by Bloomberg TV, Ellison has mentioned Workday eight times in Oracle earnings calls, as many as he has another rival, Salesforce.com.

As the old saying goes, there’s no such thing as bad publicity, and when someone like Larry Ellison kicks you in public, people are going to wonder what all the fuss is about. The fuss, it turns out, is real, though not yet sizable.

According to its latest filings with the SEC, Workday has 340 customers, most of them large companies, among them electronics manufacturing giant Flextronics, the Four Seasons hotel chain, insurer AIG and consumer-health giant Kimberly Clark. Workday says its largest deployment is with a customer with a workforce of more than 200,000 people. And another, potentially bigger one, is on the way: Hewlett-Packard CEO Meg Whitman also disclosed last week that HP is deploying Workday, and it has a global work force north of 300,000. Google is a new customer, too.

While that all sounds impressive, and seems like an excellent indicator of momentum, Workday is still relatively small. It reported revenue that was just shy of $120 million in the first six months of the year, and if it finishes the year at double that figure, it doesn’t appear quite muscular enough to pose much of a threat — at least not yet — to Oracle, whose applications software business, including HR apps, was $3 billion in 2012.

However, the story about Workday is less about what it is today than about what it could become in the next few years. A more accurate measure of that potential is bookings — essentially the combined value of multiyear contracts. By that measure, Workday is more impressive: Bookings are on track to break the $500 million mark this year.

Workday’s advantage is that it is supposedly cheaper to operate than the older, established way of installing software on company-owned systems. Customers never have to actually touch cloud software, and therefore don’t have to pay for the ongoing service and support contracts that come with software that runs the old way.

The fundamental pivot toward running applications in the cloud is making many converts. Oracle just spent most of last week talking about how its applications — including its HR software — can run purely on a software-as-a-service basis, or installed on hardware that the customer owns, or in a flexible mix-and-match manner.

So, while Workday may not overtly be about “revenge of the PeopleSoft guys,” its brewing matchup with Oracle, if nothing else, will bear watching in the months and years to come.

Here’s video of the wild scene involving the boat owned by Oracle Racing founder Larry Ellison and skippered by Jimmy Spithill:

But don’t feel too bad for Spithill; his team and his million-dollar boat recovered with little damage. They ended up winning both of the week’s two championships, and finished in first place in the overall regatta on a tie-breaker.

It was hard to be in San Francisco this week without encountering Oracle marketing dollars, between Ellison’s OpenWorld conference clogging up downtown, the Oracle Team USA sailing victory and an Oracle biplane stunt pilot headlining the airshow at Fleet Week. Oh, and wouldn’t you know: The Golden State Warriors are playing their first preseason game tonight at Oracle Arena.

He was my best friend for 25 years. He is irreplaceable. He was our Edison, our Picasso.

– Larry Ellison, speaking of Steve Jobs, via Brooke Hammerling (@brooke)

Asa Mathat / AllThingsD.com

In the TV interview (see it below), Ellison made news, saying that Oracle will not be doing any large acquisitions, especially NetApp, the storage concern that has been occasionally mentioned as a possible target. Ellison said there would be no large acquisitions.

“We think we have all the assets in-house to grow very rapidly on an organic basis,” he said.

Baritoromo had clearly been reading AllThingsD because she made a point to call out Ellison’s 45 percent share of NetSuite. In a subtle dig at Salesforce.com and its CEO Marc Benioff, Ellison has been calling Oracle “the first cloud computing company.”

Then it was on to his keynote — his second of the conference — where he revisited in additional detail some of the points he made in his first keynote from Sunday, but also did some demos.

For one thing, Ellison reminded the audience that while Oracle may not yet be the biggest software-as-a-service company by revenue, it does offer more applications on a SAAS basis than anyone else — which, given Oracle’s just-completed rewrite of its entire suite of applications for the cloud, is a factual claim.

But he also made some important pronouncements around his view of how the cloud runs, again making subtle digs at the competition. “When you run in the cloud, you also pick the infrastructure that it runs on,” he said. That’s a dig at Salesforce and other smaller SAAS companies that seek to compete in some manner or another with Oracle. Sign on for the application, you’re stuck with the platform and other infrastructure that the company selling it has running in their data center.

It was an easy segue from there to Oracle’s public and private cloud offerings. Ellison said Oracle has about 400 customers using its new Fusion applications. He said about two thirds of those customers were running their applications in Oracle’s public cloud, while about one third were doings so on dedicated machines on premise.

But since both the public and private cloud are essentially equivalent — after all, they run on the same hardware and the same software — it’s easy for a company to change its mind. “They can move to an Oracle private cloud or public cloud without changing anything,” he said. “It’s very easy to move applications back and forth.” He thinks many of those customers will do just that and switch over to the public cloud within a year. “We’ll have more visibility into that by this time next year,” he said.

Part one of Ellison’s CNBC interview is below. The other parts, where he talks about increasing Oracle’s dividend, explains why the hardware business shrank, why he bought all those houses, calls his late friend Steve Jobs irreplaceable, and then kidded Baritoromo about buying the LA Lakers are also all online.

While talk of the cloud has been dominating every aspect of Oracle OpenWorld, the massive tech conference that runs through Wednesday Thursday in San Francisco, NetSuite CEO Zach Nelson has been delivering key applications to help executives run their businesses, large and small, from the cloud.

Salesforce and NetSuite were effectively founded as a result of a single 1998 conversation involving Oracle CEO Larry Ellison, Salesforce CEO Marc Benioff and Evan Goldberg, NetSuite’s current CTO. After another company Goldberg had started crashed and burned, Ellison asked him what he wanted to do next. His answer, as Nelson told me by phone yesterday, was a software company like Siebel Systems, but one that delivered a customer relationship application via the Internet’s pipes, without having to be installed on a local machine.

Ellison said it was a fine idea, but that there was a greater need for a company that delivered software in the same way but was used to manage the business. Goldberg took that idea and created what was initially called NetLedger, and is now NetSuite. Benioff called Ellison back two weeks later and said he was going to start the Siebel-like company that Goldberg had initially envisioned.

While Ellison invested in them both, it is NetSuite that is known affectionately as “Larry’s other company.” Now NetSuite is on track to report sales north of $300 million for the year. It next reports earnings on Nov. 2 and is currently in a quiet period, so Nelson couldn’t talk about the state of business right now.

Even so, later today, Nelson will take the stage for a keynote at Oracle OpenWorld. He’ll have some news to make: NetSuite today announced a new two-tier version of its enterprise resource planning (ERP) software that connects to Oracle’s E-Business Suite.

While NetSuite has traditionally been the kind of cloud company where software is accessible to smaller and mid-sized companies, with tens of thousands of customers and an average deal size of $50,000, Nelson says it is starting to move upmarket, penetrating ever larger companies and subsidiaries of major multinational companies.

Nelson explained it like this: When those large multinational companies run ERP software, they tend to standardize on Oracle or its primary competitor SAP. “These are systems that are architected for $2 billion corporations, but not for the next tier down, the $200 million subsidiary,” Nelson said. Those smaller units would run a mixture of ERP systems geared to the midmarket companies like Sage in the U.K., Great Plains in the U.K. and MYOB in Australia. “It was like a Tower of Babel,” Nelson says.

Examples of companies already taking this two-tier approach include Pitney Bowes, which runs SAP at the corporate level but NetSuite in certain divisions. Procter & Gamble uses NetSuite to run several divisions in Asia; at the corporate level, it’s an SAP shop. “That’s the existing two-tier environment today,” Nelson said.

Now those subsidiaries are turning to NetSuite OneWorld, using it to connect with the parent’s Oracle system. Today, NetSuite announced a new version that’s geared toward this “two-tier” approach.

With new versions of NetSuite OneWorld and new SuiteCloud Connectors for Oracle, customers should be able to see a fuller picture of what’s going on across the entire corporation, without the silo effect that tends to happen within subsidiaries and divisions.

NetSuite also announced that numerous partners will be reselling it, including Dell via its cloud-integration service Boomi, IBM via its Cast Iron Systems integration unit, as well as Pervasive Software and Informatica.

In an hour-long keynote address from the Oracle OpenWorld Conference in San Francisco, Ellison announced four key initiatives bolstering the company’s bona fides in the business of offering computing resources as a pay-as-you-go subscription, but also lobbed some criticism at rivals like Salesforce.com and SAP in the process.

Ellison disclosed four new Oracle products and services, including a new version of its database software dubbed 12c — the C is for “cloud” — that he said is tuned for the multi-tenant environments common in the cloud computing world, where software runs not only across several machines, but different physical locations.

Ellison also announced a new version of Oracle’s ExaData database machine, one which loads numerous databases that a company might use into a single machine. Ellison said the machine is designed to run databases “in memory,” meaning that they rely less on conventional hard drives and more on huge banks of flash memory chips. “You virtually never use your disk drives,” Ellison said. “Everything is in semiconductor memory. All your data is migration off old mechanical spinning disk drives and into memory.”

These “in-memory” systems also use strong compression technology to make the database smaller and thus allow it to run faster, but also cheaper. “Some applications will require a huge amount of capacity, and in some cases you can buy a much smaller machine,” Ellison said.

Oracle also announced two cloud services, one which Ellison described as “infrastructure-as-a-service,” the other a private cloud service where customers will be able to enjoy the benefits of public-cloud service provider like Amazon Web Services but on hardware that is installed on the customer’s property where it would be managed by Oracle employees. Ellison said this offering would be “identical” to Oracle’s existing public cloud service, where Oracle owns, manages and operates the hardware in its own data center and sells its computing capacity as a pay-as-you-go service, “except we run it on your floor.”

Ellison also launched a few jabs, reminding the audience that the first cloud computing company was Netsuite, a cloud-software company in which Ellison is himself a key investor, and that it first launched in 1998. Salesforce.com, run by former Ellison protege Marc Benioff, the largest supplier of cloud-based software, was launched in 1999. Ellison also compared cloud computing to the century-old business model of selling electric power as a service. “It’s a good idea, but it is an old idea,” he said. “The utility model has been with us 100 years or more.” He also said that Oracle’s new hardware is faster than hardware from the likes of IBM and SAP.

The disclosures from Oracle came as The Wall Street Journal reported that the company is close to announcing a deal with the Finnish wireless phone company Nokia under which it would license mapping and location data for use alongside its database software. Ellison also said it is working with the Japanese computing company Fujitsu on a new generation of SPARC chips that will go into a new servers. Oracle took over ownership of the SPARC chip architecture when it acquired Sun Microsystems in 2010.

The company says it expects to see 50,000 attendees this year, and is featuring more than 2,500 sessions presented by more than 3,500 speakers across 14 individual venues. And forget about booking a hotel room in San Francisco this week: People attending OpenWorld have booked nearly 98,000 hotel nights.

So what’s on the agenda? Expect to hear a lot about the cloud. Oracle’s latest update to its core database software, known as 12c, will be unveiled. It’s the first major revision to Oracle’s database software in about five years. The “c” naturally stands for cloud, which Oracle is going to be embracing in a significant way at this event.

The speeches kick off Sunday night with the first of two keynotes from Oracle CEO Larry Ellison. Co-President and former Hewlett-Packard CEO Mark Hurd is speaking twice as well, once on Monday and again on Thursday.

Oracle is likely to continue to challenge the notion that it’s on the defensive from companies like Salesforce.com. Ellison has publicly disparagedSalesforce and another cloud-based software company Workday, both of which compete directly with Oracle.

Salesforce (whose recent Dreamforce conference also blocked traffic) has built what’s forecast to be a $3 billion annual business selling customer relationship software that runs in the cloud, and its CEO Marc Benioff is a former Oracle exec and Ellison protégé. Workday, due for a $400 million initial public offering soon, is run by Aneel Bhusri and Dave Duffield, the founders of PeopleSoft, a company Oracle acquired in a hostile takeover. It offers a breed of software known as human capital management software used by HR departments at big companies.

Ellison and Benioff have feuded — sometimes publicly — over their competing visions of the cloud and how software should be delivered to large companies. Benioff is fond of saying that if a company ever takes delivery of a server at a loading dock, they’re not running the “true cloud.” Ellison — who also has a significant hardware business to consider — argues that big customers need a mixed approach: Where some will be happy farming out the work of managing the hardware to someone else, others will want to own it outright, while still others will want to mix and match. He’s also fond of pointing out that Salesforce is a big customer of Oracle’s database.

Oracle isn’t the only company arguing for the mixed cloud approach. IBM and Hewlett-Packard and Dell — hardware vendors all — tend to see the cloud in this way, as does Microsoft, which offers its products in both hosted and on-premise varieties.

Still, there’s no mistaking Oracle has come to embrace the “software-as-a-service” model long personified by Benioff and Bhusri as well as Netsuite, a cloud software player run by former Oracle exec Zach Nelson and in which Ellison is an investor. (Nelson is speaking at Openworld, too.) Oracle is pivoting toward delivering all of its software as a service, allowing customers to choose which approach best suits them. On Oracle’s last earnings call, Hurd made a point of calling out a long list of customer wins for cloud-based CRM and HCM offerings: Accenture, Adobe, Cisco Systems — where Benioff is a new director — Colgate-Palmolive and Proctor & Gamble are all running Oracle applications in the cloud.

Indeed, Oracle has said it is now the second-largest company offering software-as-a-service behind Salesforce itself. It reported $1 billion in bookings for cloud software in June. Expect an update on the size of that business in Ellison’s remarks.

Much of that growth has come from Oracle’s aggressive pace of acquisitions. It has been gobbling up cloud-based software companies such as RightNow and Taleo.

And Oracle’s service offerings don’t stop at software: They extend to hardware, too. Customers can purchase ExaData and ExaLogic hardware and then run them inside an Oracle-owned and -maintained data center. The point is to get the hardware up and running quickly without having to bear the time and expense associated with setting it up.

So, if you care about the cloud — and nearly everyone in enterprise IT does these days — it’s going to be an interesting week.

Asa Mathat / AllThingsD.com

The filing shows that while Ellison took a token $1 salary, his combined compensation from stock options and other items for the year jumped by 24 percent year on year to north of $96 million from $77.6 million in 2011. Ellison’s compensation package included about $90 million worth of stock options, an $8.4 million $3.9 million incentive payment that was only half one-quarter as large as the maximum allowed under the bonus plan, and a $1.5 million payment for security at his home. Most of the increase can be attributed to the value of the options for 7 million shares that Ellison received. He received the same amount of options last year, and they’re simply worth more this year.

Ellison, the company’s founder, who has run it since 1977, already owns more than 23 percent of the outstanding equity in Oracle, amounting to more than 1.1 billion shares. As of Friday’s closing price, his stake in the company is worth more than $37 billion.

Catz, Oracle’s president and CFO, received a 23 percent raise in total compensation. Oracle reported her combined compensation in salary, stock options and other payments as $51.7 million, up from $42.1 million the year before, including options awards worth more than $48.3 million, and an annual base salary of $950,000. She owns a stake in the company amounting to more than 23.5 million shares, which, as of Friday’s closing price, is worth more than $763 million.

Hurd, who joined the company in 2010 after leaving Hewlett-Packard, where he was CEO, saw his total compensation for the year drop to $51.7 million from $78.4 million the year before. The decrease is because of a big one-time bonus in stock-option grants that Oracle gave him when he joined. His base salary is equal to Catz’s, at $950,000, and also included $48.3 million worth of stock options. Hurd owns 5.4 million shares in the company, which, as of Friday, was worth north of $176 million.

Hurd and Catz also each received a $2.4 million incentive payment out of a possible $10.4 million.

The compensation was for Oracle’s fiscal year 2012, which ended May 31, a period during which the company’s share price fell by 19.5 percent, annual revenue rose by 4.2 percent, and net profits rose by 16.8 percent.

While the shares fell in after-hours trading, as markets opened in New York investors sent the share soaring by 68 cents, or more than 2 percent, to $32.94. Profits on a per-share basis were 53 cents, in line with what analysts had expected, while revenue, at $8.2 billion, was off the consensus by about $200 million. What gives? It’s subtle, and it all comes down to two big bets Oracle has made that are close to — but not yet — paying off: Hardware and cloud computing.

First, there’s the hardware business, the remnant of the former Sun Microsystems that Oracle acquired in 2010. Oracle has been rebuilding those product lines into what it calls its “engineered systems” line, hardware sold under the brand name Exa: There’s Exadata, Exalogic and Exalytics. (Oracle president Mark Hurd described them in detail in an interview with AllThingsD in June.) It also sells other lines of hardware, the T and M lines that are leftover Sun products. Here, revenue was $779 million for the quarter.

On a constant currency basis, hardware sales are down by more than 20 percent. As analyst Karl Keirstead of BMO Capital Markets put it, Oracle missed the estimates for hardware sales “by a mile,” and he doesn’t expect it to begin growing until the fourth quarter of the 2013 fiscal year. (Yesterday’s report was for Q1 of fiscal 2013.) In fact, Oracle said that it expects hardware sales next quarter to show year-on-year declines in the range of 8 percent to 18 percent on a constant currency basis.

And yet the shares are rising this morning. For one thing, declining hardware sales are all part of the long-term plan. CEO Larry Ellison has spoken many times of letting lower-margin portions of the hardware business fade away while growing sales of hardware that has a higher margin. That’s what the Exa line is all about. Why sell a bucket of peaches for a $2 profit when you can make peach pie and make a $20 profit? Oracle’s only problem is that its peach pie — that would be the new hardware business — is still getting traction, while the older business selling T-Series and M-Series servers is still hanging around. There was progress: Operating margins rose to 44 percent, up from 42 percent a year ago. Oracle’s goal is to get those margins back to 48 percent, which is where they were before the Sun acquisition.

Analyst Brad Reback of Stifel Nicolaus says the trend may turn in Oracle’s favor by next summer or fall. “We think traction for Oracle’s engineered systems continues to accelerate … However, we believe the ‘bleed off’ of its commodity business and cannibalization of its [higher-priced] M-series is masking strength in these other businesses. We believe by 4Q this trend could reverse and expect growth in its hardware business in FY14.”

Combined with headwinds brought on the by the strength of the U.S. dollar versus several foreign currencies, especially the euro, the miss in hardware essentially dragged down the rest of the business. It certainly could have been worse.

Meanwhile, Oracle made a lot of noise about its burgeoning business of offering applications in the cloud, or on a “software-as-a-service” basis. Remember that Oracle has been spending big on cloud acquisitions in the last year or so, nabbing the HR software firm Taleo and the customer support company RightNow, among others. Keirstead reckons that those deals added 11 percent to Oracle’s top line on a constant currency basis.

The new embrace of the cloud constitutes a pivot toward a second fundamental transition. Oracle has long been one of the leaders in the old-school “on-premise” type of software that runs internally on a company’s hardware. Cloud software runs in remote data centers and is generally sold on a subscription basis, where the customer pays for what they use.

Of the $1.6 billion in new software-license and cloud-subscription revenue, return derived from cloud software amounted to $222 million. Its biggest success in the cloud appears to be in the HCM (Human Capital Management) space, which would include the Taleo acquisition. It said less about its Customer Relationship Management suite, which Keirstead thinks suggests that Oracle is getting serious pressure on that front from Salesforce.com.

Whatever the case, CEO Larry Ellison said that more cloud announcements are coming at Oracle’s annual OpenWorld conference in San Francisco next month. “Oracle has clearly signaled that it is pivoting to the cloud more assertively, which may reassure investors worried that it was late in doing so,” Keirstead wrote in a note to clients this morning. For now, the Street likes the cloud.

One of the bigger ones is Oracle’s OpenWorld, which runs from Sept. 30 to Oct. 4 in San Francisco. The software giant just announced on its Web site that it has hired Pearl Jam to play an event on Oct. 3, with Kings of Leon also on the bill. They join Oracle’s expanding roster of big-name acts, which includes Sting, who played at OpenWorld in May of 2011.

That makes the fall start to look like a battle of the bands from the early 1990s. Salesforce.com has its own Dreamforce event running Sept. 18 to 22, and the company has hired the Red Hot Chili Peppers, who were preceded by Metallica last year, and Stevie Wonder the year before that.

If last year’s OpenWorld is any indicator, there may be some fireworks. Remember that Oracle booted Salesforce CEO Marc Benioff from its keynote stage during last October’s OpenWorld. The kerfuffle was a high-profile blip in a complicated, slowly simmering feud between Benioff and Oracle CEO Larry Ellison. Benioff later made it sound like an argument in a high-school cafeteria, saying it had something to do with something he said about Ellison on Facebook. Given how close the events are on the calendar, they’ll probably find ways to tweak each other in public.

Below is Pearl Jam’s 2009 video “Amongst the Waves,” which is the video Oracle has embedded on its conference-promotion site:

But the questions stemming from the dispute don’t stop with the decision by Judge James Kleinberg ruling that Oracle must abide by the terms of promises it made to HP in 2010 when it settled an unrelated lawsuit concerning Oracle’s hiring of former HP CEO Mark Hurd.

First off for HP is the question of whether the damage to its Business Critical Server business unit, which sells the Integrity line of servers that use the chips, can be reversed. The damage is plain to see in HP’s financial results. For the first six months of the year, sales are off by $275 million, in a business unit that last year saw sales north of $1.1 billion. The uncertainty brought about by the lawsuit has hurt sales, and HP has made it clear it expects them to remain under pressure.

But it’s not lost sales that are hurting HP the most: A half-billion-dollar drop in sales at a company on track do $123 billion this year isn’t much to get excited about. It’s the profits. Legal filings made public over the course of the suit showed that HP derives a healthy portion of its profits from ongoing service and support contracts with companies that buy its Integrity servers. While HP doesn’t routinely break these numbers out in regulatory filings, documents showed that in 2010, HP derived about 15 percent of its profits on an EBIT basis (Earnings Before Interest and Taxes) on business related to Itanium.

Reversing the trend will be hard. For one thing, the legal fight isn’t over. Oracle has promised both to appeal the decision and to continue to press its counter-claims against HP in court, so the uncertainty among HP customers will continue, though as HP’s enterprise chief Dave Donatelli put it to me in an interview in June, the first step toward saving the BCS business is winning the lawsuit.

HP does have a plan to move Itanium customers onto more mainstream servers. It’s called Odyssey, and it involves building a new generation of Business Critical Servers on a more mainstream platform, probably Intel’s Xeon. Over time — and it would take several years — Integrity customers could be persuaded to move in this direction. Exactly how HP preserves the highly profitable service and sales contracts upon which it has relied all these years isn’t entirely clear. One key piece of the strategy would likely involve the creation by HP of a version of its Unix operating system, called HP-UX, that runs on Intel’s mainstream x86 chips.

For Oracle’s part, while its appeal is pending it will have to rejigger its plans and issue an update to its database software for Itanium systems. Existing customers had nothing to worry about in the first place. But it now faces the prospect of paying out a significant damages award to HP. Even if it is as high as $4 billion as many reports have suggested — and it likely won’t be — Oracle’s balance sheet, flush with almost $31 billion in combined cash and short term investments, can take the hit.

But why let it go that far? HP CEO Meg Whitman has referred to the historical relationship that existed between HP and Oracle as “one of the great partnerships in IT history.” And Oracle CEO Larry Ellison has said he likes Whitman.

There have been at least two rounds of settlement talks held before and during the trial. Now that the primary issue of the trial — whether Oracle was bound to stick to an agreement it made in 2010 — has been decided, perhaps there’s ground upon which to build the foundations of a third way out of the dispute.

Oracle’s point that the Itanium chip is nearing the end of its life has more merit than either HP or Intel would care to admit. There may indeed be a few more generations left of Itanium, but nothing can change the fact that the world of enterprise computing is turning its back on Unix and non-x86 chips. The research firm IDC noted in May that the size of the market for non-x86 servers as a percentage of the overall server market has declined to the lowest it has ever seen.

Both HP and Oracle have to respond to this. HP’s response is Odyssey. Oracle, which owns the legacy Sun Microsystems business of SPARC-based servers running Solaris, has its Exadata, Exalogic and Exalytics hardware systems, all of which are based on Intel x86 chips. As the migration away from Unix plays out, customers of both HP’s Integrity line and Oracle’s SPARC systems are going to be forced to choose a way forward.

Depending on the case, both Oracle and HP will be jockeying for this emerging segment of post-Unix customers. One would think they’d want to do so with the maximum amount of customer goodwill. These are specialized customers — shared customers were the basis of the partnership in the first place — who don’t make their computing choices lightly and who tend to stick with one vendor for a long time. For them, the sight of these two tech industry heavyweights fighting so bitterly must be getting tiresome.

The top brass at most Fortune 500 companies are opting for the latter. At least, that’s what a new study to be released on Thursday from data analytics company Domo claims.

Some 70 percent of Fortune 500 CEOs are nowhere to be found across the top social networks — like Facebook, Twitter, Pinterest and Google+ — according to the study.

Why? The report, unfortunately, doesn’t go there, so your guess is as good as ours. Perhaps they’re not convinced that they need a social presence themselves, or perhaps they just don’t have the time to put into it. Or maybe they don’t want to go through the embarrassment and potential fallout caused by a social media faux pas (lord knows Anthony Weiner learned this the hard way).

Domo founder Josh James, however, thinks that opting out entirely is a bad idea.

“The primary reason you have to be social is because that is where your customer lives,” James wrote in a blog post published Wednesday evening. “Even if you are not leveraging it to close business and interact with your customers, you have to spend enough time online to at least understand the shift in the world.”

James’s company does have some skin in the game. Backed by $63 million in venture funding from the likes of Andreessen Horowitz and Benchmark Capital, Domo offers executive-level customers a dashboard-like set of social analytics and management tools to keep an eye on their company. James is so gung ho on the social concept inside the workplace, he recently launched a companywide experiment, dubbed #Domosocial, where every Domo employee will be required to use outside social platforms for two months, essentially practicing what his company preaches.

To be sure, the CEOs in the study have some presence online currently. That’s mostly on static, less engagement-heavy platforms like LinkedIn — where more than 25 percent have profiles — or even Wikipedia, where upward of 36 percent of CEOs have their own Wikipedia pages.

The other platforms that thrive on higher engagement aren’t so populated. Around 4 percent of the CEOs surveyed have Twitter accounts, while nearly 7 percent have Facebook accounts. And forget about Google+ and Pinterest — fewer than 1 percent of CEOs are on Google’s social network, and absolutely none of them are pinning LOLcat pics to their own Pinterest boards.

Is this going to change in the coming years? Perhaps, given the recent Twitter account adoptions from high-profile CEOs like Rupert Murdoch, head of News Corp. (and my boss, by proxy of News Corp’s ownership of Dow Jones, AllThingsD’s parent company), and Larry Ellison, the famously mouthy CEO of Oracle. If enough CEOs see the ripples caused by these magnates, and the conversation it generates, it could coax a few new inductees to go social.

That is, unless we end up with another Weiner moment on our hands.

Earlier this month, the company surprised analysts by reporting quarterly results that were better than anyone expected, and with the revelation that Oracle is now the second-largest provider of software-as-a-service after Salesforce.com, it has challenged the conventional wisdom that it was more of an old-school software company.

But that’s not the most interesting thing I noticed in looking over Oracle’s most recent financials. I saw that a lot of operating expenses were lower — $174 million lower, to be exact — in Oracle’s fiscal 2012 versus fiscal 2011. It looked to me like the Mark Hurd playbook is alive and well. It was the first thing that came to mind when I sat down with the Oracle president (and former CEO of both Hewlett-Packard and NCR) at Oracle’s offices in New York for his second on-the-record interview (here’s the first) with AllThingsD. A transcript of our conversation is below:

AllThingsD: Mark, Oracle had a pretty good quarter, when people expected it to be tougher. Software sales are up, hardware is down. But when I went back and looked at the results, I saw something that looked familiar: Shrinking expense lines in things like marketing and general and administrative. I thought that looked a bit like the old Mark Hurd playbook from HP, and NCR before that. Is that part of what’s going on?

Mark Hurd: I think it was a good quarter for us. The quarter behaved well across virtually every metric. Our pipelines were up. Our conversion rates, which is our ability to convert pipeline into orders, was strong. I think, to your point, we managed our expenses. I think, in the context, if you look at the quarter, we added 3,300 people to our sales organization. And those are really the quota-carrying people, plus the technical people who support the sales people. And we did that while keeping our sales and marketing expenses relatively flat year over year. I think anytime you can realign your capital so you can get it into R&D, or into sales, as we have, it tends to show up. We’ve got more opportunities than we can deal with right now, so we had to increase, and it’s a great thing for us.

And that increase is taking place at a time when some people expected you to cut back. Are you trimming in some places and adding in others?

We’re doing exactly what you’d expect us to do. We’re looking at everything in the company, and trying to ensure that we have our investments in the right place. It’s a team sport. We’ve done a lot of work across Oracle to be prudent in some areas with expenses. But at the same time, we’re investing. Our investment in Research and Development is up. As as you’ve seen, our investment in sales and technical people is up. We’re investing into the business because we think we’ve got a great hand and we want to go play it.

Are you investing in Europe, too? Everyone is concerned about their exposure there, given all the sovereign debt problems and the economic troubles there.

We invested during the year across all the geographies. We grew our U.S. sales organization. We grew our European sales organization. We grew in Latin America, and we grew in Asia. And we grew across most pillars of our business. We made material investments in our applications business, and our cloud applications business. We made investments in middleware — we think we have a very strong suite of middleware, and we want to increase our sales force there. We made investments in business intelligence. We think we have a strong offering with Exalytics, and we want to boost our efforts there. And we’ve made investments in engineered systems, and they’re showing up. If you look at the quarter, we booked almost as many systems in Q4 of 2012 as we did in all of 2011. So I think that’s a compliment to both the product and the capacity of the sales force.

Let’s talk about your engineered systems business, because I think that’s the newest piece that people are just beginning to understand. These are the Exadata, Exalogic and Exalytics systems you’ve been talking about. You’ve got the legacy Sun hardware business on one hand, but what’s fundamentally different about the engineered systems versus the traditional systems?

When you look at Sun, it’s a server line that has the SPARC chip and the Solaris operating system, and it has a very long history. So there’s a couple things we’ve done. Exadata is really a little different than a traditional Sun server. It’s a combination of five different technologies. It has a lot of DRAM memory in it. It has a lot of flash memory in it. It’s got incredible compression technology. We can take a database and shrink it and make it one-tenth the size that it was before. We network it with Infiniband, which gives us 10 times better performance inside it. When you shrink the database by a factor of 10, and run the data inside the computer 10 times faster, you’re doing what you did before 100 times faster. A report that used to take 100 minutes to generate now takes one. And, by the way, you can turn that into a cost benefit or a performance benefit. By that I mean, if you’re happy with 100 minutes, you need only one-tenth of the computer. Or you can run 100 reports in the time it used to take you to run one. It also really combines a server, storage and a database. It’s all of those things, and that’s why we call it an engineered system. And just as important as all of that is the fact that we put it together for you, we provision it for you. Our engineers take the Exadata and integrate everything, which normally you’d have your own people do.

And then you have specific flavors of these systems that are designed for specific industries, say retail or finance or health care?

Depending on how far up the stack goes. Think of Exadata up through the database layer. Exalogic goes up through the middleware layer. Exalytics takes the foundation of Oracle’s business intelligence suite. So they’re three different engineered systems that are built around different parts of the Oracle software stack.

So where does that leave the traditional Sun hardware business?

I think when you speak of Sun, you think of the T Series computer line and the M Series computer line. Larry [CEO Larry Ellison] has done a lot of investments in that core line. So in the traditional server line we’ve done new SPARC silicon, the T4, we’ve brought out a new version of the Solaris operating system, all in an effort to drive better performance and total cost of ownership. And we think now, as we push new releases of SPARC, we think we’re going to have the highest-performing silicon in the computer industry. No one argues that Solaris is the most advanced operating system of the Unixes that are available today. Now we’ve also done something new. We’ve introduced a SPARC Supercluster, and that’s all those different pieces in Exadata, built on a SPARC chip and running Solaris. So if you’re an older Sun-SPARC customer and want the benefit you get from Exadata, but you don’t want to switch over to Intel and Linux, which is what Exadata is built on, you can get them and keep SPARC and Solaris. We’re investing into the Sun base.

That brings me to another interesting point. Without diving too deep into the circumstances around the departure of Keith Block, he got caught in court documents saying some things about Sun products; and earlier, there were some statements made by Larry about letting the business around some older commodity products — Sun products, products where the profit margin is lower — shrink. Obviously you’re not going to defend what Block said, but at the same time, you’ve got Larry saying that it’s okay with him if the sales of certain hardware products fall to zero. Putting myself in the shoes of a longtime Sun customer, I wonder if you can unpack those two ends of a spectrum for me?

The best thing to do is tell you what we’re doing. We’re interested in selling intellectual property that differentiates Oracle in helping our customers run their IT better. That’s what we’re focused on. Those things manifest themselves in the T4 chip and Solaris 11 and SPARC Supercluster, and Exadata and Exalogic, and so on. A product that we bring to the customer that merely passes through our distribution channels and passes through our books, we don’t think we add a lot of value to that. We continue to do it mainly, though with less emphasis, because the customer has asked us to do it. Our view is that Oracle adds value where we can bring to bear differentiated intellectual property that gives people a better, more advanced solution that helps them do something cool and exciting.

Let’s talk about the cloud. Larry said Oracle is on track to be the No. 2 software-as-a-service (SaaS) provider after Salesforce.com, after all those acquisitions you’ve made. Oracle has always been kind of a traditional on-premise software player. How do you see the cloud strategy shaping up?

Let me first say this: You have to separate “cloud” from SaaS. First, there’s an incredible amount of Oracle technology running in the cloud: Oracle databases, Oracle middleware, Exadata, Exalogic. … So if you asked us to give us to give you cloud revenue, it would be huge. But that’s separate from SaaS. Just to be clear: We are No. 2 today in SaaS; we have roughly a billion dollars in SaaS revenue. And we’re just getting started. Our stuff is only just now hitting the market. We will have most of our Oracle portfolio running as SaaS on the Oracle cloud by the end of the calendar year. And when you look at our cloud, it’s best on our technology, running our apps. And by the way, that other SaaS company you mentioned — I can’t remember their name — their stuff is built on Oracle. And it was built three decades ago, in the ’90s. Our stuff is fresh, it’s new and modern and built on Fusion middleware.

Speaking of acquisitions, are you still in the hunt? You did Taleo and RightNow and Collective Intellect recently in the SaaS space. Are you still looking around?

We’ve said we’ve got a balanced capital allocation strategy. We’ve been big buyers of our stock. We’re increasing our dividend. And we’re continuing to look at deals that make sense. Larry has said that sometimes the best growth in Oracle’s history has been during economic downturns. And it’s because so many properties become available.

Did you kick tires on Quest Software?

I can’t comment on M&A matters.

When I talked to Meg Whitman at HP earlier this month, she talked about her desire to have a better relationship with Oracle, and how HP and Oracle crafted one of the “great partnerships in IT industry history.” It sounded a little like an olive branch to me. You’re unique in that you sat on both ends of that partnership at various times. Do you share her sentiment?

I can’t comment on that.

You’re coming up on two years at Oracle. Tell me a little about the division of labor. You work with Larry and CFO Safra Catz. How does it work?

It’s just like Larry said at D: All Things Digital. [See the full video here.] He does a lot on products, as he said. I run the revenue, and Safra runs most of our operations. And then, to be blunt, the three of us come together on the strategic issues, and we talk about the issues that cross the areas.

The deal by the Oracle Corp. chief executive to buy about 98 percent of Lanai from Castle & Cooke Inc., which came to light late Wednesday, comes along with two luxury resorts, two golf courses, water and transportation utilities, a large solar-energy farm and more than 88,000 acres of land.

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