Oracle 2005 Annual Report Download - page 12

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Table of Contents
(VisualStudio.NET), Sun Microsystems (Sun Studio), Sybase (PowerBuilder), open source Eclipse and others. The success of our development tools is closely
related to the relative popularity of our platform (database and middleware) compared to our competitors, as well as the larger competition between Java and
Microsoft’s .NET.
The sale of applications software, in particular, is changing rapidly due to the development and deployment of SOA and web services, application integration
middleware as well as “software as a service” offerings, such as those from salesforce.com and RightNow Technologies Inc. in CRM applications. As a result of
our acquisitions of PeopleSoft and Siebel, we presently offer several product lines, which are suited for different needs of customers in different industries. We
compete against SAP, Lawson Software, Inc., Infor, Microsoft Dynamics (Great Plains, Solomon, Axapta, Navision), Sage, Inc., SSA Global Technologies, Inc.
and many other application providers. These include numerous point solution providers such as Epicor Software Corporation (accounting), SunGard Data
Systems Inc. (treasury), Kronos Incorporated (time and attendance), Taleo Corporation (recruitment), Callidus Software Inc. (compensation), Automatic Data
Processing, Inc. (HR, payroll, and BPO), Ariba, Inc. (procurement), i2 Technologies, Inc. (supply chain management), MRO Software, Inc. (enterprise asset
management), DSCI Corporation (logistics), Extensity (ERP), Broadvision, Inc. (marketing), Kana Software, Inc. (analytics), salesforce.com (sales force
automation) and Amdocs Limited (customer service).
In addition, we compete with numerous specialized applications providers focused in specific vertical industries, such as financial services, retail,
telecommunications and others. SAP is a major competitor in every industry vertical. Specialized industry vertical solutions such as retail and banking are also
influenced heavily by the presence of customized solutions and in-house development.
With SOA, our packaged applications also compete with custom solutions either developed in-house or by large systems integrators such as Accenture Ltd. or
IBM Global Services. Our pre-packaged applications also compete against business process outsourcers including ADP, Fidelity Investments, Ceridian
Corporation, Hewitt-Cyborg Limited and others. Our application products are architected around a single database model, which we believe is a key
differentiator between our most significant competitors and us.
In the sale of consulting and systems integration services, we both partner with and compete against Accenture Ltd., Electronic Data Systems Corporation, IBM
Global Services, Bearing Point, Inc., CapGemini Group and many others.
Research and Development
We develop the majority of our products internally. In addition, we have acquired technology through business acquisitions. We also purchase or license
intellectual property rights in certain circumstances. Internal development allows us to maintain technical control over the design and development of our
products. We have a number of United States and foreign patents and pending applications that relate to various aspects of our products and technology. While
we believe that our patents have value, no single patent is essential to us or to any of our principal business segments.
Research and development expenditures were $1.9 billion, $1.5 billion and $1.3 billion, or 13% of total revenues, in fiscal 2006, 2005 and 2004, respectively. As
a percentage of new software license revenues, research and development expenditures were 38%, 37% and 36% in fiscal 2006, 2005 and 2004, respectively.
Rapid technological advances in hardware and software development, evolving standards in computer hardware and software technology, changing customer
needs and frequent new product introductions and enhancements characterize the software markets in which we compete. We plan on continuing to dedicate a
significant amount of resources to research and development efforts to maintain and improve our database, middleware technology and applications software. We
plan to continue to maintain and enhance the Oracle E-Business, PeopleSoft, JD Edwards and Siebel application suites in addition to investing in Oracle Fusion
Applications.
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Source: ORACLE CORP, 10-K, July 21, 2006 Powered by Morningstar® Document Research℠