Oracle 2010 Annual Report Download - page 201

SEGMENT INFORMATION
SEGMENT INFORMATION
(USD $)
12 Months Ended
05/31/2011
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 in
fiscal 2010, 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) Cloud
Services, which was formerly named 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 generally includes database management software, application server
software, Service-Oriented Architecture and business process management software, data integration software, business
intelligence software, identity and access management software, content management software, portals and user interaction
software, and development tools. Our database and middleware software product offerings also include Java, which is a global
software development platform used in a wide range of computers, networks and devices. Applications software generally
provides enterprise information that enables companies to manage their business cycles and provides intelligence and includes
enterprise resource planning software, customer relationship management software, enterprise performance management
software, supply chain management software, business intelligence applications software, enterprise portfolio project
management software, web commerce software and industry-specific applications software.
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 and
hardware-related software, including the Oracle Solaris Operating System. Most of our computer servers are based on our
SPARC family of microprocessors and on microprocessors from Intel Corporation. Our servers range from high performance
computing servers to cost efficient, entry-level servers, and run with Oracle Solaris, Oracle 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 and IT strategy alignment, enterprise
architecture planning and design, initial product implementation and integration, and ongoing product enhancements and
upgrades. Cloud Services include Oracle Cloud Services and Advanced Customer Services offerings. Oracle Cloud Services are
designed to provide comprehensive software and hardware management and maintenance services for customers hosted at our
Oracle data center facilities, select partner data centers or physically on-site at customer facilities. Advanced Customer Services
provides support services, both on-site and remote, to customers to enable increased performance and higher availability of their
products and 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) 2011 2010 2009
New software licenses:
Revenues(1) $ 9,220 $ 7,525 $ 7,112
Sales and distribution expenses 4,692 3,980 4,006
Margin(2) $ 4,528 $ 3,545 $ 3,106
Software license updates and product support:
Revenues(1) $ 14,876 $ 13,175 $ 11,997
Software license update and product support expenses 1,144 958 1,012
Margin(2) $ 13,732 $ 12,217 $ 10,985
Total software business:
Source: ORACLE CORP, 10-K, June 28, 2011 Powered by Morningstar® Document Research℠