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Table of Contents
Marketing and Sales
We directly market and sell our products and services to businesses of many sizes and in many industries, government agencies and educational
institutions. We also market and sell our products through indirect channels. No single customer accounted for 10% or more of our total
revenues in fiscal 2014, 2013 or 2012.
In the United States, our sales and services employees are based in our headquarters and in field offices throughout the country. Outside the
United States, our international subsidiaries sell, support and service 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 included elsewhere in this Annual Report.
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 that deliver innovative solutions
and services based upon our product offerings. By offering our partners access to our product offerings, 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.
Seasonality and Cyclicality
Our quarterly revenues have historically been affected by a variety of seasonal factors, including the structure of our sales force incentive
compensation plans, which are common in the technology industry. Our total revenues and operating margins are typically highest in our fourth
fiscal quarter and lowest in our first fiscal quarter. The operating margins of our businesses are generally affected by seasonal factors in a similar
manner as our revenues (in particular, our new software licenses and cloud software subscriptions segment) as certain expenses within our cost
structure are relatively fixed in the short term. 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. Our enterprise software and cloud and hardware offerings compete directly with some offerings from
some of the largest and most competitive companies in the world, including Microsoft Corporation (Microsoft), International Business Machines
Corporation (IBM), Intel, Hewlett-Packard Company (HP) and SAP AG and smaller companies like salesforce.com, inc. and Workday, Inc., as
well as many others. In addition, due to the low barriers to entry in
14
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advanced customer support services, which are provided on-premise and remotely to our customers to enable increased performance
and higher availability of their Oracle products and services; and
•
education services for Oracle products and services, including training and certification programs that are offered to customers, partners
and employees through a variety of formats, including instructor-led classes at our education centers, live virtual training, self-paced
online training, private events and custom training.