Oracle 2009 Annual Report Download - page 215

SEGMENT INFORMATION
SEGMENT INFORMATION
(USD $)
12 Months Ended
05/31/2010
SEGMENT INFORMATION 16. SEGMENT INFORMATION
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are
defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the
chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.
Our chief operating decision maker is our Chief Executive Officer. We are organized geographically and by line of business.
While our Chief Executive Officer evaluates results in a number of different ways, the line of business management structure is
the primary basis for which the allocation of resources and financial results are assessed. As a result of our acquisition of Sun, we
entered into a new hardware systems business with two operating segments as described further below. We have three
businesses—software, hardware systems and services—which are further divided into seven operating segments. Our software
business is comprised of two operating segments: (1) new software licenses and (2) software license updates and product
support. Our hardware systems business is comprised of two operating segments: (1) hardware systems products and (2)
hardware systems support. Our services business is comprised of three operating segments: (1) consulting, (2) On Demand and
(3) education.
The new software licenses line of business is engaged in the licensing of database and middleware software as well as our
applications software. Database and middleware software includes database management software, application server software,
business intelligence software, identification and access management software, content management software, portal and user
interaction software, Service-Oriented Architecture and business process management software, data integration software and
development tools. As a result of our acquisition of Sun, we acquired certain software technologies that expanded and enhanced
our existing database and middleware software product offerings, including Java, which is a global software development
platform used in a wide range of computers, networks and devices. Applications software provides enterprise information that
enables companies to manage their business cycles and provide intelligence in functional areas such as customer relationship
management, financials, human resources, maintenance management, manufacturing, marketing, order fulfillment, product
lifecycle management, enterprise project portfolio management, enterprise performance management, procurement, sales,
services, enterprise resource planning and supply chain planning.
The software license updates and product support line of business provides customers with rights to unspecified software product
upgrades and maintenance releases, internet access to technical content, as well as internet and telephone access to technical
support personnel during the support period.
The hardware systems products line of business consists primarily of computer server and storage product offerings. Most of our
computer servers are based on our SPARC family of microprocessors and on Intel Xeon microprocessors. Our servers range
from high performance computing servers to cost efficient, entry-level servers, and run with our Solaris Operating System, Linux
and certain other operating systems environments. Our storage products are designed to securely manage, protect, archive and
restore customers' data assets and consist of tape, disk and networking solutions for open systems and mainframe server
environments. Customers that purchase our hardware systems products may also elect to purchase our hardware systems support
offerings. Our hardware systems support offerings provide customers with software updates for the software components that are
essential to the functionality of our hardware systems and storage products and can include product repairs, maintenance
services, and technical support services.
The consulting line of business primarily provides services to customers in business strategy and analysis, business process
simplification, solutions integration and the implementation, enhancement and upgrade of our database, middleware and
applications software. On Demand includes Oracle On Demand and Advanced Customer Services. Oracle On Demand provides
multi-featured software and hardware management and maintenance services for customers that are delivered at our data center
facilities, select partner data centers or customer facilities. Advanced Customer Services consists of solution lifecycle
management services, industry-specific solution support centers, hardware systems expert services, packaged offerings that
support the installation and optimization of our hardware products and remote and on-site expert services. The education line of
business provides instructor-led, media-based and internet-based training in the use of our software and hardware products.
We do not track our assets by operating segments. Consequently, it is not practical to show assets by operating segments results.
The following table presents a summary of our businesses' and operating segments' results:
Year Ended May 31,
(in millions) 2010 2009 2008
New software licenses:
Revenues(1) $ 7,525 $ 7,112 $ 7,501
Sales and distribution expenses 3,980 4,006 4,040
Margin(2) $ 3,545 $ 3,106 $ 3,461
Software license updates and product support:
Revenues(1) $ 13,175 $ 11,997 $ 10,507
Software license update and product support expenses 958 1,012 933
Margin(2) $ 12,217 $ 10,985 $ 9,574
Total software business:
Revenues(1) $ 20,700 $ 19,109 $ 18,008
Expenses 4,938 5,018 4,973
Margin(2) $ 15,762 $ 14,091 $ 13,035
Hardware systems products:
Revenues $ 1,493 $ — $ —
Hardware systems products expenses 850 — —
Sales and distribution expenses 307 — —
Margin(2) $ 336 $ — $ —
Hardware systems support:
Revenues(1) $ 912 $ — $ —
Hardware systems support expenses 408 — —
Margin (2) $ 504 $ — $ —
Total hardware systems business:
Revenues (1) $ 2,405 $ — $ —
Expenses 1,565 — —
Margin (2) $ 840 $ — $ —
Source: ORACLE CORP, 10-K, July 01, 2010 Powered by Morningstar® Document Research℠