Oracle 2013 Annual Report Download - page 39

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Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
We begin Management’s Discussion and Analysis of Financial Condition and Results of Operations with an overview of our key operating
business segments and significant trends. This overview is followed by a summary of our critical accounting policies and estimates that we
believe are important to understanding the assumptions and judgments incorporated in our reported financial results. We then provide a more
detailed analysis of our results of operations and financial condition.
Business Overview
We are the world’
s largest provider of enterprise software and a leading provider of computer hardware products and services that are engineered
to work together in the cloud and in the data center. Our offerings include Oracle database and middleware software, application software, cloud
infrastructure, hardware systems—including computer server, storage and networking products—and related services. We develop and maintain
our products and services to be enterprise-grade, reliable, secure and interoperable while offering customers a choice in deployment models that
best meet their information technology (IT) needs. Our customers can subscribe to use many Oracle software and hardware products through our
Oracle Cloud offerings, or purchase our software and hardware products and related services to build their own internal clouds or on-premise IT
environments.
Cloud computing IT environments, including those offered through our Oracle Cloud Software-as-a-Service (SaaS), Platform-as-a-Service
(PaaS) and Infrastructure-as-a-Service offerings, are designed to be attractive and cost-effective options for our customers as we integrate the
software and hardware on the customers’ behalf in IT environments that we deploy, support and manage on the customers’ behalf. We are a
leader in the core technologies of cloud computing, including database and middleware software as well as web-based applications,
virtualization, clustering, large-scale systems management and related infrastructure. Our products and services are the building blocks of our
own cloud services, our partners’ cloud services and our customers’ cloud IT environments. An important element of our corporate strategy is to
deliver reliable, secure and scalable products and services that are built upon industry standards and are engineered to work both together or
independently, regardless of the deployment model selected.
We believe that our investments in, and continued innovation with respect to, our software and cloud, hardware, and services businesses are the
foundation of our long-
term strategic plans. In fiscal 2014, 2013, and 2012 we invested $5.2 billion, $4.9 billion and $4.5 billion, respectively, in
research and development to enhance our existing portfolio of products and services and to develop new products and services. We have
expanded our enterprise-grade cloud computing offerings through our continued investments in research and development and through targeted
acquisitions in order to broaden our Oracle Cloud offerings. For example, our Oracle Cloud Software-as-a-
Service offerings, including our sales,
marketing, customer service, financials, project management, human capital and talent management cloud solutions, among others, enable us to
provide IT functionality that customers can use to manage critical business functions in a rapidly deployable delivery model with lower upfront
customer investment. Certain of our enterprise-grade cloud computing offerings include infrastructure based upon our Oracle Engineered
Systems, including our Oracle Exadata Database Machine, Oracle Exalogic Elastic Cloud and Oracle SuperCluster products, among others. We
designed our Oracle Engineered Systems to combine certain of our hardware and software offerings to increase computing performance relative
to our competitors’ products, creating cost efficiencies, time savings and operational cost advantages for our customers. Our Oracle Engineered
Systems provide the core infrastructure for our own on-premise IT data centers and those of our customers, and for cloud IT environments,
including our own Oracle Cloud services, our partners’ cloud services and our customers’ cloud environments. We also continue to demonstrate
our commitment to customer choice through ongoing enhancements to our Oracle E-Business Suite, Siebel, PeopleSoft and JD Edwards
application software products and services, amongst others.
We believe that an active acquisition program is another important element of our corporate strategy as it enhances the products and services that
we can offer to customers, expands our customer base, provides greater scale to accelerate innovation, grows our revenues and earnings and
increases stockholder value. In recent years, we have invested billions of dollars to acquire a number of companies, products, services and
technologies that add to, are complementary to, or have otherwise enhanced our existing offerings. We expect to continue to acquire companies,
products, services and technologies to further our corporate strategy.
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