Ellison's CFO Safra Catz explained that Oracle is also compensating its sales teams on margin, not just revenue, shifting Sun's sales mix from loss-making commodity products. These changes will enable Oracle to grow revenue and profits from Sun's hardware in fiscal 2011, she added. Analyst firm Jefferies raised its Oracle price target from $26 to $30 on Friday, thanks partly to the streamlined Sun. "We continue to edge our price target higher as our estimates tick up, given strong performance from core Oracle and higher confidence on accretion targets from the Sun acquisition," wrote Ross MacMillan, a Jefferies analyst, in a note. After completing the acquisition in January, Sun contributed only one month of revenue to Oracle's third-quarter results, although the software maker said that the $596 million haul was more than they were expecting. Excluding items, Oracle expects Sun to contribute $1.5 billion of operating income in fiscal 2011 and $2 billion in fiscal 2012. "Oracle is fixing the Sun business model, which is no mean feat," wrote Patrick Walravens, an analyst at JMP Securities, in a note, adding that the software maker is also taking app share from rival SAP ( SAP). There were some raised eyebrows when Oracle launched its Sun bid last year. In addition to Sun's longstanding execution problems, the move also marked a strategic shift for Oracle into hardware. Oracle made its initial hardware play back in 2008 when it launched its Exadata database device. Initially built on Hewlett-Packard ( HPQ) kit, Oracle tapped Sun for its Exadata gear last year and is reaping the benefits of the hardware/software combo.