Krista Bessinger - IR Safra Catz - President and CFO Lawrence Ellison - CEO Charles Phillips - President

Heather Bellini - UBS Brent Thill - Citigroup Sarah Friar - Goldman Sachs Jason Maynard - Credit Suisse Adam Holt - JP Morgan Tim Klasell - Thomas Weisel Partners Peter Goldmacher - Cowen & Company Kirk Materne - Banc of America Peter Kuper - Morgan Stanley John DiFucci - Bear Stearns Krista Bessinger: Good afternoon, everyone and welcome to Oracle's first quarter fiscal year 2008 earnings conference call. With me on this call are Oracle Chief Executive Officer Larry Ellison; Oracle President Charles Phillips; and Oracle President and Chief Financial Officer, Safra Catz. As usual, our prepared remarks will be followed by Q & A. Before we begin, however, I'd like to remind you that today 's discussion may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are 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 or publicly release the results of any revisions of these forward-looking statements in light of new information or future events. Throughout today's discussion, we'll attempt to present some important factors relating to our business that may affect our predictions and you should also review our most recent Form 10-K and Form 10-Q for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. A PDF copy of our press release and financial tables, which include a GAAP to non-GAAP reconciliation, can be viewed and downloaded on the Oracle Investor Relations website at www.oracle.com/investor. So with that I'd like to turn the call over to Safra Catz for her opening comments.

Thanks, Krista. Good afternoon, everyone and thanks for joining us. I'm going to first focus on our non-GAAP results for Q1, and then I'll review guidance for Q2 and turn the call over to Larry and Charles. As you can see, we had another excellent quarter and a super strong start to our fiscal year. We delivered these results against a very big Q1 last year, as many of you probably remember, and following a very strong Q4. The strength in the quarter was very broad based across all product lines and once again, the quarter's results were not dependent upon any unusually large deals. We reported new software license revenues up 35% to $1.1 billion, the strongest growth in any quarter in a decade. Hyperion contributed $80 million to the quarter and Agile, roughly about $7 million. We saw exceptional strengthen our technology business with license revenues growing 23% year over year; again, our fastest Q1 growth since August of 2000. We grew technology license revenues 23% in the Americas, 38% in EMEA and 4% in APAC. Our applications business was also up a strong 65% year over year, and geographically, we turned in a strong performance across all regions with 58% in the Americas, 77% in EMEA and 67% in APAC. As our license results show, we continue to grow faster than the market and faster than our primary competitors taking share in all product categories. Chronic update and support revenue was up 22% on a non-GAAP basis to $2.4 billion. We've also been able to again demonstrate this quarter that we can grow both revenue and profitability simultaneously. Non-GAAP income from operations grew 28% to $1.7 billion resulting in operating margins of 37%, up from 36% in Q1 of last year. EPS grew 27% to $0.22 on a non-GAAP basis excluding stock option expense as compared to $0.18 in the Q1 of last year. Stock-based compensation was less than $0.01. Operating cash flows for the trailing 12 months increased by a $1.9 billion to $6.6 billion while free cash flow increased 40%. In Q1, we spent $0.5 billion on our buyback and bought back approximately a little bit more than 25 million shares and we paid down a $1.4 billion of our commercial paper. As we have said, the rate of our buyback will fluctuate each quarter taking into account our other uses. We also recently swapped out our floating rate debt into a lower, fixed rate resulting in a meaningful debt service reductions going forward and we actually just did that a couple weeks ago. Finally, the currency impact for the quarter was positive 3 points on the new license and 4 points on total revenue. Now, let me turn to the guidance as follows: For new software license revenues, we're expecting them to be up 15% to 25% year over year. For total revenues, we're expecting it to be up 18% to 21% year over year on a non-GAAP basis, and 19% to 21% on a GAAP basis. Non-GAAP EPS, excluding stock based comp, is expected to be $0.26 or $0.27 as compared to $0.22 last year, and GAAP EPS for the second quarter is expected to be $0.20 to $.21, up from $0.18 last year. Now, this guidance assumes a tax rate of 28.7% for Q2, which is very close to what it was last year which was 28.6%. Now, if current exchange rates hold for the entire quarter, that will result in about 4 points of positive currency impact on our Q1 total revenues. Now of course you know, currencies are likely to fluctuate. As a result, that may impact our Q2. With that, I'm going to turn the call over to Larry for his comments.

Thanks, Safra. It was an all-around spectacular quarter for us and we're very pleased and what I'm going to do is to review our goals for our three businesses, and review how we're doing. Our goal is to be number one in all three of our businesses: number one in database, number one in middleware, and number one in applications. We've been number one in database for a very, very long time and the database market which is the most mature business we're in, has come down to three major players and a number of niche players, not surprisingly. With Oracle number 1, IBM number 2 and Microsoft number 3. According to the latest analyst reports, Oracle continues to gain share against the number 2 player, IBM. We picked up another point of share this past year against IBM. So, we're doing extremely well against them, and we do very well against Microsoft, whose system is only available on Windows. We're by far and away the strongest database on the fastest growing operating system, which is Linux. There are some interesting niche players. Sybase gets smaller every year. Teradata, a database machine and now there's some new database machine players, Neteeza, and let me say that Oracle is a very innovative company and I think you'll see us with a response to some of these niche players some time at the end of this year or next year. In middleware, while Oracle is not number 1 like we are in database, we are by far the fastest growing middleware company. As Safra pointed out, our growth in software was the fastest it's been in a decade and that was really led by our middleware group whose growth was just spectacular. It looks like the middleware business is coming down to the same big three players, but in the exact opposite order. Microsoft, with their middleware, a lot of which is embedded in Windows, Microsoft being the number 1 player, IBM being the number 2 player, and Oracle being the number 3 player in middleware. We passed all the other niche players. We really separated ourselves from the niche players. BEA, we're almost twice as large as BEA right now, BEA is shrinking in terms of new license sales. So, it's come down to the same big three, but we're growing dramatically faster than our competitors and our target really is to beat IBM because it's very difficult to measure the size of Microsoft's middleware business because so much of it is embedded in Windows. Also as I said before, Microsoft is proprietary technology where IBM and Oracle both have a strategy to deliver middleware based on industry standards. According to our current growth rate, if we maintain our trajectory and IBM maintains their trajectory we could pass them as early as the end of this year or certainly next year to be the number 2 player in middleware. So, again, that's very, very exciting. The niche players again are falling backwards, and one of the niche players, NetWeaver from SAP, has virtually disappeared, since Shai Agassi's abrupt departure from SAP, you never hear anything about NetWeaver anymore and they are just not doing very well. That moves us on to apps where we're the number 2 player, but once again we're growing much faster than our primary competitor SAP. The results, again, speak for themselves. We grew 65% this last quarter in apps. SAP grew 18% in their most recent quarter, but it's not about the past, it's all about the future. What I'd like to highlight here is the radically different strategies of the two companies for growth. Our strategy for growth is to find a way to add more value to the same customers we already serve, which are the large end of the mid-market and large companies. What we're doing here is moving beyond ERP to industry specific software. So in the telecommunications industry that would be billing systems and network provisioning systems and network inventory systems; core applications to run their business, to run telco. Core applications to run a bank. Core applications to run a retail chain of stores. Core applications to run a utility. That's our focus, and that allows us to leverage the existing relationships that we have because we already sell databases to these companies, we sell middleware to these companies. We sell ERP and CRM to these companies, and now we want to sell this industry-specific software. It's very different than SAP's strategy which is to go after small companies; small companies with their new Business ByDesign, formerly known as A1S product. Now, we see the problem in that because we've looked at going down market. We've looked very closely at it, and we think it's very hard to make money because there is no synergy. To go down market you need a new product and new product development teams. You spend a lot of money developing a whole new product for the low end. But you also need an all new sales force because we don't call on those customers. We don't call on small businesses, and it's very expensive to call on small businesses. It's very expensive to do ERP implementations in small businesses. The cost of sales is high. The cost of implementation is high. There are virtually no synergies in sales, marketing, and product development and support. So while we think it's an interesting market -- the small market -- because it's large, we just haven't figured out a way to make a substantial profit in that market. We think it's hard to make money. Our strategy: add more value, go upstream, sell industry-specific software to our existing customers, and we'll watch and see how SAP does going after small companies. Especially with in Software as a Service which we think is very interesting, but so far no one has figured out how to make any money at it. Thank you very much. Charles. Charles Phillips: Thanks, Larry. I just want to make a few comments from an operational perspective. We had a very good start to the year, very well executed in EMEA and North America, particularly. I want to thank the guys there and our retail vertical had a blow out, as well. So I think part of the reason is we had fewer changes in terms of territories, we've learned how to minimize that over the years and so that maintains relationship consistency. We're managing the timing of the kickoffs better so they're earlier the quarter, although we could have done better and we will next year. We also improving productivity; 35% license growth, about 30 % sales and marketing growth in terms of expenses, but we think there's more improvement to make it there as well. A few product area highlights. On the database business, the enterprise options continue to do very well. What was encouraging is our newer options are coming on so if you take Oracle Database Audit Vault, for instance, which we released last April, that was up 48% quarter to quarter. If you look at Content Database and Records Database, both of those were up nearly 300%, so these new areas are coming on. Also in the quarter, keep in mind we released a major new release of the Oracle database, 11g. In the first month, we had 35,000 downloads. Also with that product, we picked up four new options which is, of course, important. They include advanced compression, total recall, real application testing and active data guard. In middleware, you heard Larry talk about our strength there. We grew 129% compared to a decline of 9% for BEA. I guess we'll have to stop using them, they are becoming less relevant by the day and find somebody else to pick on; but nonetheless, we're getting significant share. We now have 53,000 customers there and more importantly, these customers are upgrading, so we're releasing every 48 months. If you look at our latest two releases, 85% of our customer base is on that release. We get a number of awards every quarter and too numerous to list. One I thought was important to mention, because it's the seminal report in middleware. Forrester evaluated nine platform vendors in middleware against 175 criteria, five different use cases, 100-page report and once again, Oracle came out the leader. We repeated as a leader. We were the leader last year as well. So that continues to go well technically. Some of the key wins in the quarter, Intuit made a commitment to our entire suite of offerings, as did Thomas Cook. Both of those were wins against IBM, University of Virginia. Enterprise performance management wins, Ford Motor Company, Cisco, Baker Hughes. Business intelligence against the usual competitors, Anheuser-Busch, U.S. Steel we won and several others. Content management, which I mentioned was very hot, Symbion, a very large airliner, the U.S. Department of Agriculture, and those were wins over Documentum and a replacement of IBM Filenet. Management enterprise-wide rollout at Royal Bank of Scotland and Scandia. We beat Sun, IBM and C8 in those deals. Turning to applications, I think what's really happening in our applications business is customers are getting our story now. We are the only company offering an end-to-end application suite that spans ERP, CRM, and the vertical applications as Larry talked about, all in a standard technology stack. Now we're delivering those integrations across the stack so customers can get best of breed products which are pre-integrated by Oracle with modern middleware. If you look at our integration in platform, which we call Application Integration and Architecture, or AIA for short, we are pre-integrating key processes across our application portfolio. For instance, order to cash, which would represent a flow from Siebel to Oracle EDS. We call that a process integration pack and we've been shipping them over the summer. These packs add immediate value for our customers since they can stop maintaining the custom integrations, and they can also modify their processes more easily. Let me talk about some of the key wins and some of their specific applications areas. In CRM On Demand, we released Version 14 of our service. We won a very large pharmaceutical company, one of the Top 5 in the world with 300 seats and it will be larger over time. Also I wanted to clear up the discussion over ADP. We mentioned that one last quarter and there were rumors out there was only five or 10 seats. That's over 300 users, that was a standalone deal made by ADP, not the acquisition. That continues to go well. Also we had a very large software company in Europe that standardized on us. So we're seeing nice growth, especially in Europe and Asia since those are newer geographies for us. We now have a dedicated salesforce that needs to be larger. We're hiring as fast as we can and we have a coverage issue so we have to keep hiring there, but we think we're very competitive. It's a very competitive market. We need to stay focused, but we are doing exactly that. Also, on the on-premise applications we had a lot of new releases that we talked about earlier in the year. If you remember, in January we had five new releases of our ERP and CRM products and that has gone very well. For instance, on PeopleSoft Version 9, over 30% of the installed base has upgraded already. Key companies like ABN Ambro, Northwestern University, Wyoming Department of Transportation and so on are upgrading. They are finding the upgrade process easier because we can engineer it across the stack and that means with have more upsale opportunities. We have key customers going to 8.12 this quarter like Land O'Lakes and Johnson & Johnson. J.D. Edwards, they had not had a new release in a decade so we put out the product for release 89.1. We have over 100 customers actively upgrading right now. Of course, we just shipped a new release of the Business Suite Version 12. Some key wins in the quarter, CVS Corp., Hyatt, Encore ERP, SMB Market, the YMCA of Greater New York and G-Log, some of these extended ERP areas, G-Log, Sprint Nextel, 20th Century Fox and Timex, GE Plastics. The retail vertical had a blowout with Ahold which was a major deal in the quarter, and also the Commonwealth of Pennsylvania Liquor Control Board since that's right in Pennsylvania, we thought we could mention that one, as well. Some of the verticals, just to wrap up. In the telco area, we won PCCW; that was a win over Amdocs and Keenan. Canal in EMEA, that was a win over Comverse, the Indian solution in communications. In banking, through iflex, we won the Korea Exchange Bank, and also for the fifth year in a row, iflex was named as the number 1 core banking product in terms of new installations for the last 12 months. To wrap up with tax and utilities, we had some key wins there in these new areas like the enterprise tax platform. So for instance, the Commonwealth of Kentucky will move their entire state tax system to Oracle. That was a key win over SAP working with EDS. Transurban, which is one of the largest toll road billing companies, collecting companies in the world, they are standardizing on the SPL product, as well. Lastly, I just want to remind everyone, Open World this year is November 11 through the 15 in San Francisco, and it's our 30-year anniversary. You don't want to miss it; 42,000 attendees and our friends will be there. See you there. Krista Bessinger: So, with that, we have time for a couple of questions. Allen, could you please poll for questions?

Your first question comes from Jason Maynard - Credit Suisse. Jason Maynard - Credit Suisse: Many of your large cap tech peers have actually struggled to deliver both revenue growth and market expansion. It's usually a trade-off where you get one or the other. This past quarter you guys actually had revenue acceleration even in your core business while growing operating margins. Can you just dive into a little bit more detail and talk about some of the dynamics that are actually enabling you to deliver that performance? Safra Catz: Sure. A number of things are going on. First of all, our installed base has grown very, very dramatically, and that's really the engine of all of this. So you all focus on the new license growth; it's really about the base and the new licenses are really just adding to the base every quarter and every year. So as that continues to grow, it helps us on the margin side continuously. Secondly, as these acquisitions come in, as I've said before, as they first come in, they bring in a lot of expenses and oftentimes not a lot of revenues because of our different, more conservative accounting policies and the investment that we put in globalizing and really making the products at a level that we're comfortable with for our increased distribution channel, so expenses come in. However, after awhile, these acquisitions start to really pay back. A few quarters ago, we sort of crossed the line here, and though our margins were not decreasing, they've now started to increase as these acquisitions, we can recognize more of the revenue and also, we actually have higher revenues from them over time that the benefits us. So as the costs are overshadowed by the revenue increases, obviously, automatically you have increasing margins and we do expect that to continue. Jason Maynard - Credit Suisse: As a follow-up on that, within some of your high growth verticals like retail, fiserv, telco, what's your best guess for penetration and how far do you think you can go just in terms of driving into the market or at least picking up more productivity as you get deeper into the verticals? Lawrence Ellison: We're just at the very beginning in terms of penetrating these markets. We really purchased verticals that were the technology leaders, not necessarily the market leaders. If you look at Portal versus Amdocs, I mean, Amdocs is clearly the overwhelming market leader in the telco space but we think the Portal technology is more modern, much more flexible as telcos go into all these interesting new businesses of reselling data services. We think we're ideally equipped to start penetrating as they roll out new systems. So this is the very beginning. We think there's a huge amount of head room for these verticals to grow enormously, and we think they're going to be a bigger and bigger part of our business every year. Charles Phillips: I echo that because I think what's happening is in many of these conversations, we're selling against a custom application and a legacy system. So most of what they have is legacy systems from 10 years ago. So this is very early on and we're still trying to convince people that off the shelf software is useable. So that's where we are. We're early on in some of these verticals, so we have plenty of room to go. Now this is a first time that they've had a large application vendor show up who will support it forever, to say that you can buy off the shelf. It's changing their thinking, and those conversations are underway right now. That's what's driving the growth in those verticals as people switch over.

Your next question comes from Heather Bellini - UBS. Heather Bellini - UBS: I had a follow-up to Jason's question. Just a little bit more detail, for fiscal year '07 last year I think you had 40 basis points of operating margin expansion. Looking out to this year, how should we be thinking of that given what you showed this quarter? Safra Catz: Well, you know, it's interesting. We did about 60 in the quarter, and this is always the very toughest quarter because we go into the quarter with really all of the expenses at a run rate of Q4 and it's always a seasonally lower revenue quarter for us. So if things were not going very well, this would be where you'd see it, and of course, it went very well. I think you should expect it actually to increase as we are able to reduce some of the costs that we've picked up in some of our previous acquisitions. Now, of course, if we do another acquisition, it may slow the improvement down a little bit, but we expect margins to improve $0.01 to $0.02 this year, 100 to 200 basis points. Heather Bellini - UBS: This year 100 to 200 basis points? Safra Catz: Yes, compared to last year. Heather Bellini - UBS: My follow-up, Safra, is just seeing that the great quarter that you guys just posted on the license line, how do you feel about the pipeline entering November versus say last November? Do you feel as if you're being more conservative given the macro environment right now? Safra Catz: Well, the reality is that pipelines are extremely strong but we read the same papers you do. So pipelines are strong, very strong, stronger than they were, much stronger than -- well, very strong. Pipelines are very strong, but as I said, we read the papers too and though we are of course, geographically diverse and obviously we're diversified by sector and all that and of course we're getting great benefit from a weak dollar. We feel our pipelines look very good, but we do take into account what's going on. Heather Bellini - UBS: So you're giving yourself cushion? Safra Catz: You are never going to get me to say that.

Your next question comes from Adam Holt – JP Morgan. Adam Holt - JP Morgan: My first question is about some of the internal execution in the first quarter. Charles, I believe you mentioned there was less territory movement than you've seen in maybe previous years. Given that a couple years back the first quarter was a little bit more dicey, you've now had two very strong Q1s in a row. Could you maybe detail a little bit some of the things that you've done to solidify execution in the period? Charles Phillips: We finally did what Larry has been telling us for five years, quit making so many changes, that helps. Secondly, our structure as we are currently set up helps a lot. As we make these acquisitions, because we have specialized sales forces and business units, we don't have to disrupt the entire organization to add one more sales force. So that structure is very helpful to accommodating the acquisitions, so that's worked as well. I think also, people have just been working together longer. Now that we have all of these products, we're doing more footprint deals where people are going in jointly together in these specialized sales forces, and saying we're all going to do better if we tell the entire Oracle story, and so more of those deals are happening, as well. That's helping. Adam Holt - JP Morgan: If I could just ask a follow-up on cash flow, it looked like it was particularly strong, by my calculation, up over 60% year on year in the quarter. It looked like deferred was quite strong and I wanted to know whether or not there was anything unusual or if it was just good renewals and maintenance, et cetera, as well as collections look like they were particularly strong? Safra Catz: Well, all of the above. The collections are always very strong this quarter. We had just such an enormous Q4. Some of our customers are signing up for things that we just aren't booking right now because they don't meet our revenue recognition policies for booking now, so you'll see some of that. They've paid us, but we're not calling it revenues here. We have a long history of that kind of conservatism. We don't actually consider it conservative, we actually consider it appropriate. But as our customers pay us, got to put it on the balance sheet somewhere and we got a lot of money in Q1, as we usually do. Adam Holt - JP Morgan: So would that suggest there was actually a shift in deferred, maybe towards a little bit more license revenue being in deferred than we've seen in the past? Safra Catz: It kind of depends where. The bulk of deferred revenues is maintenance, and that's the bulk of it and there's just no two ways to look at it. So everything that moves around is generally, mostly maintenance, but there are obviously customers and remember, all of that maintenance they pay us generally upfront and it just sits there on the balance sheet until we can count it as revenue.

We'll now go to Sarah Friar - Goldman Sachs. Sarah Friar - Goldman Sachs: Good afternoon, everyone. You obviously came off an incredible quarter on the database and middleware side, and you mentioned the launch of 11g back in early July. Do you think that that actually started to have an impact this quarter or is that still to come really as customers get a look at the new options? Lawrence Ellison: I think our database announcements neither freeze the market or expand the market. Of course when you buy a database from Oracle, you get the rights. As long as you're paying maintenance, you get the rights to the next release and the next release and the next release after that. Now, we think it's just the fact that our products are getting better and better relative to the competition. Charles mentioned one particular product called Datavault, and that allows us to conceal data from what -- I don't want to get into too much technical detail -- but database administrators for DB2 and database administrators, the technicians who create the DB2 databases and create the SQL server databases, those technicians can actually see the data that's in the database. With Oracle Datavault, we can have the technical people screened off of the data. So we can secure the data from the technical people. So that Datavault, that security option is a huge, not only is it a possibility for us to sell more options, but it's a huge differentiator where our database is dramatically more secure than what's offered by the competition. Again, I think over time, we're actually distancing ourselves. We're able to invest more than Microsoft in database. We're able to invest more than IBM in database because our business is bigger. We continue to innovate, we continue to focus on security, on reliability, on scalability with rack and grid computing, and we're just taking share right away from that IBM on mainframes and we're taking share away from Microsoft using Linux. So we're now the cost leader, I guess is the long answer; we're now the cost leader. We announced last quarter that for the first time ever we had better price performance. We've always had better performance than Microsoft, but now we have better price performance than Microsoft. So whether you're looking at high end security issues or just transactions per dollar, we're the leader across the board and we expect our technology business to grow pretty rapidly from here on out. Sarah Friar - Goldman Sachs: So it looks like we can at least still see some double-digit type growth across that area for the next couple quarters it sounds like? Lawrence Ellison: I believe at least, yes. Sarah Friar - Goldman Sachs: Just one other one for you since you did comment on the macro and everyone's concerned about it. As you talked, particularly in the financial vertical to those customers, can you give us any incremental color on how they might be feeling about budget cycles as we look out into '08? Charles Phillips: I was just there last week, meeting with a lot of financial customers and it hasn't translated yet to any definite change in spending from what we can tell, although there will be layoffs, of course. That's coming, so we'll have to wait and see. We're watching it, but none of my guys have seen anything. I haven't seen anything yet.

Your next question comes from John DiFucci - Bear Stearns. John DiFucci - Bear Stearns: Most of my questions have been asked, but just kind of looking at the results it looks like strength across everything here. But just a quick question on Asia-Pac. It looks like the tech area of Asia-Pac was not as strong as some of the other areas and perhaps you can comment on that? Charles Phillips: There were a few deals that we're coming on in Asia-Pac; not Japan, just in core Asia-Pac that did not close, that has since made progress. One of them has closed already, that was lower than what we were looking for. We think we have it addressed and hopefully that will come back this quarter.

Your next question comes from Brent Thill - Citigroup. Brent Thill - Citigroup: Just a quick follow-up on the deferred. The long term was more than 2X any quarter last year and that seems pretty unusual relative to a Q1. So, were there any major changes or is that just as a result of the prepaid maintenance? Safra Catz: It's a bunch of stuff. It's customers paying for things that apply to them for multiple years and so we're not booking it yet. That's how it works. So if it's out of current, it's because we won't be booking it in the next year. It's out there in the future and because of acquisitions and otherwise, there's really a move towards companies making much longer term commitments to us for multiple years. Obviously, we're not going to book that upfront when it isn't the thing to do. Lawrence Ellison: As Safra pointed out, when we make an acquisition, often these vertical software companies sell a project which includes vertical software and consulting services. As the customer continues to pay, we can't recognize that software revenue because it doesn't meet our revenue recognition principles. So some of these cases where it's a project that's been sold that includes software, we recognize the software perhaps either ratably at the end of the project. Brent Thill - Citigroup: Safra, since you're so excited to talk about the pipeline maybe we can just get a sense from you. When you look at the pipeline, would you characterize it as late stage pipeline that you're seeing the strength or early stage or how do you characterize the phases as you as you head into Q2? Safra Catz: Well, I'll tell you, I don't characterize it young, old, short, or tall. I mean, mostly what we're doing is we follow the exact same process every single quarter. We get the forecast from the field. We get the pipeline which is what we expect to close in the quarter, okay? Now, it is always a multiple of the actual forecast. It is true it is a larger multiple of the forecast this quarter than previous quarters -- and by the way, that's the trend we've been having. I have to assume historical, some sort of close rates and we have to make an assumption on those and we look at historical trends. But the pipeline is exactly the same age as it is every quarter. It is the pipeline that we see, two and a half, three weeks out of what the field thinks they're going to close in the quarter and so it's exactly the same age. That's not the variable that moves. The variable that moves is the close rate, which is a judgment based on a lot of facts and the forecast.

We have time actually now for just one more question, operator.

Your final question comes from Peter Kuper - Morgan Stanley. Peter Kuper - Morgan Stanley: Larry, in your comments, you mentioned talking about SAP and them going to the lower end as a challenge. Thinking about Siebel On Demand and some of the other On Demand efforts going on within Oracle, where do you see this market targeting for you guys? The SMB is probably the more open terrain at this point versus the installed base which you guys have certainly locked up quite a bit of. Is that a fair read that On Demand is not going down too far downstream? How should we look at that market segment? Lawrence Ellison: Well, it appears that the small business is open terrain because I guess Oracle doesn't sell a lot to small business and SAP doesn't sell a lot to small business. However, Intuit does and there are players in that market. I'm not sure it's open; it may appear open to us because we don't sell to them, but I'm not quite sure how open terrain that is, and I'm not sure how big that market is. You count a lot of companies, but you look at the total IT spend, and how they implement these big ERP systems and we think there's a significant cost of sales, a significant cost of implementation, and a limited amount of money you can charge. So that business looks a bit challenging, my view is challenging. Then when you add in the fact that you're going to recognize revenue ratably because you're going to deliver the service on your own computers, you're going to deliver software as a service, the best software as a service company in the world by far, I think, is Salesforce.com and they don't make any money. And there are no synergies. For us to go down market, we have to have an all new sales force because we don't call on these customers. We'd have to have all new marketing and advertising campaigns because we don't advertise to those customers. We would have to have an all new product and an all new product development team because our products are inappropriate for those customers. And then you have to build the business and walk up the experience curve; so we think that's enormously challenging. Peter Kuper - Morgan Stanley: IBM, Larry you were talking earlier, security identity management, you guys are certainly building out quite a suite via the acquisitions, and it sounds like that's going well for you. Is systems management, or IBM typically more directly, is that something you guys would consider offering as well as part of the overall Oracle software suite here? Lawrence Ellison: We looked to going into that business and we decided to largely stay out of that. We have a product called Enterprise Manager where we do applications monitoring, measurement and management and that's an important business to us. But we have no intention of going head-to-head with Tivoli or going head-to-head with HP, or CA or BMC in these management applications. We occupy a niche. We believe that's the right strategy for us to be a niche player for our database, middleware and applications. For enterprise monitoring and management we've chosen not to expand into that marketplace.

Thanks, everyone for participating in today's call. There will be a telephone replay that will be available for 24 hours, and that replay number is 719-457-0820 with passcode 9004474. You can access a webcast replay also on the Oracle Investor Relations website and that will be available through the close of market on September 27. Thank you all for joining us.