Oracle 2010 Annual Report Download - page 20

Table of Contents
In the United States, our sales and service employees are based in our headquarters and in field offices throughout the country. Outside the United States, our
international subsidiaries sell and support our products in their local countries as well as within other foreign countries where we do not operate through a direct
sales subsidiary. Our geographic coverage allows us to draw on business and technical expertise from a global workforce, provides stability to our operations and
revenue streams to offset geography-specific economic trends and offers us an opportunity to take advantage of new markets for our products. Our international
operations subject us to certain risks, which are more fully described in “Risk Factors” included in Item 1A. of this Annual Report. A summary of our domestic
and international revenues and long-lived assets is set forth in Note 16 of Notes to Consolidated Financial Statements.
We also market our products worldwide through indirect channels. The companies that comprise our indirect channel network are members of the Oracle Partner
Network. The Oracle Partner Network is a global program that manages our business relationships with a large, broad-based network of companies, including
independent software and hardware vendors, system integrators and resellers who deliver innovative solutions and services based upon our products. By offering
our partners access to our premier products, educational information, technical services, marketing and sales support, the Oracle Partner Network program
extends our market reach by providing our partners with the resources they need to be successful in delivering solutions to customers globally. The majority of
our hardware systems products are sold through indirect channels, including independent distributors and value added resellers. We have enhanced direct sales
coverage for our hardware systems products and intend that our direct sales force will sell proportionately more of our hardware systems products in the future
than they do currently.
Seasonality and Cyclicality
Our quarterly results reflect distinct seasonality in the sale of our products and services. Our total revenues and operating margins are typically highest in our
fourth fiscal quarter and lowest in our first fiscal quarter. General economic conditions also have an impact on our business and financial results. The markets in
which we sell our products and services have, at times, experienced weak economic conditions that have negatively affected our revenues. See “Selected
Quarterly Financial Data” in Item 7 of this Annual Report for a more complete description of the seasonality and cyclicality of our revenues, expenses and
margins.
Competition
We face intense competition in all aspects of our business. The nature of the IT industry creates a competitive landscape that is constantly evolving as firms
emerge, expand or are acquired, as technology evolves and as customer demands and competitive pressures otherwise change.
Our customers are demanding less complexity and lower total cost in the implementation, sourcing, integration and ongoing maintenance of their enterprise
software and hardware systems, which has led increasingly to our product offerings being viewed as a “stack” of software and hardware designed to work
together in a standards-compliant environment. Our enterprise software and hardware offerings compete directly with some offerings from the most competitive
companies in the world, including Microsoft Corporation (Microsoft), International Business Machines Corporation (IBM), Hewlett-Packard Company (HP),
SAP AG, and Intel, as well as many others. In addition, the low barriers to entry in many of our market segments regularly introduce new technologies and new
and growing competitors to challenge our offerings. Our competitors range from companies offering broad IT solutions across many of our lines of business to
vendors providing point solutions, or offerings focused on a specific functionality, product area or industry. In addition, as we expand into new market segments,
we will face increased competition as we will compete with existing competitors, as well as firms that may be partners in other areas of our business and other
firms with whom we have not previously competed. Moreover, we or our competitors may take certain strategic actions—including acquisitions, partnerships and
joint ventures, or repositioning of product lines—which invite even greater competition in one or more product categories.
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Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠