Oracle 2013 Annual Report Download - page 60

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Table of Contents
2013 and 2012, respectively. To the extent underlying cloud SaaS and PaaS contracts are renewed with us following an acquisition, we will
recognize the revenues for the full values of the cloud SaaS and PaaS contracts over the respective contractual periods.
In reported currency, new software licenses revenues earned from transactions of $3 million or greater increased by 3% in fiscal 2014 and
represented 33% of our new software licenses revenues in fiscal 2014 in comparison to 32% in fiscal 2013.
Excluding the effect of favorable currency rate fluctuations, total new software licenses and cloud software subscriptions expenses increased in
fiscal 2014 primarily due to higher employee related expenses from increased headcount, higher variable compensation expenses due to revenues
growth, and higher cloud SaaS and PaaS expenses resulting from costs incurred to support the related revenue increases.
Excluding the effect of unfavorable currency rate fluctuations, total new software licenses and cloud software subscriptions margin and margin
as a percentage of revenues decreased in fiscal 2014 as our total expenses increased at a faster rate than our total revenues for this operating
segment.
Fiscal 2013 Compared to Fiscal 2012: Excluding the effect of foreign currency rate fluctuations, total new software licenses and cloud
software subscriptions revenues increased during fiscal 2013 due to growth across all regions and incremental revenues from our acquisitions.
On a constant currency basis, the Americas contributed 69%, EMEA contributed 23% and Asia Pacific contributed 8% to the increase in new
software licenses and cloud software subscriptions revenues during fiscal 2013.
In constant currency, our new software licenses revenues increased by 1% and our cloud SaaS and PaaS revenues increased by 100% in fiscal
2013 primarily due to incremental revenues from our acquisitions. As described above, the amount of new software licenses and cloud software
subscriptions revenues that we recognized in fiscal 2013 and fiscal 2012 were affected by business combination accounting rules.
In reported currency, new software licenses revenues earned from transactions of $3 million or greater increased by 11% in fiscal 2013 and
represented 32% of our total new software licenses revenues in fiscal 2013 in comparison to 29% in fiscal 2012.
Excluding the effect of currency rate fluctuations, total new software licenses and cloud software subscriptions expenses increased in fiscal 2013
primarily due to higher employee related expenses and stock-based compensation from increased headcount, and higher intangible asset
amortization, partially offset by a decrease in certain legal costs.
Excluding the effect of unfavorable currency rate fluctuations, total new software licenses and cloud software subscriptions margin and margin
as a percentage of revenues decreased in fiscal 2013 as our total expenses increased at a faster rate than our total revenues for this operating
segment.
Cloud Infrastructure-as-a-Service: Our cloud infrastructure-as-a-service segment provides deployment and management offerings for our
software and hardware and related IT infrastructure including virtual machine instances that are subscription-based and designed for computing
and reliable and secure object storage; Oracle Engineered Systems hardware and related support that are deployed in our customers’ data centers
for a monthly fee; and comprehensive software and hardware management and maintenance services for customer IT infrastructure for a fee for
a stated term that is hosted at our data center facilities, select partner data centers or physically on-premise at customer facilities. Cloud
infrastructure-as-a-service expenses consist primarily of personnel related expenditures, technology infrastructure expenditures and facilities
costs. For all periods presented, our cloud-infrastructure-as-a-service segment’s revenues and expenses were substantially attributable to our IT
infrastructure management, maintenance and hosting services offerings.
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