Oracle 2014 Annual Report Download - page 25

Table of Contents
offerings, which could reduce our revenues and profitability, at least in the near-term. If we do not successfully execute our cloud computing
strategy or anticipate the cloud computing needs of our customers, our reputation as a cloud services provider could be harmed and our revenues
and profitability could decline.
Our cloud offerings are generally purchased by customers on a subscription basis and revenues from these offerings are generally recognized
ratably over the term of the subscriptions. The deferred revenue that results from sales of our cloud offerings may prevent any deterioration in
sales activity associated with our cloud offerings from becoming immediately observable in our consolidated statement of operations. This is in
contrast to revenues associated with our new software licenses arrangements whereby new software licenses revenues are generally recognized
in full at the time of delivery of the related software licenses. We incur certain expenses associated with the infrastructures and marketing of our
cloud offerings in advance of our ability to recognize the revenues associated with these offerings. As customer demand for our cloud offerings
increases, we experience volatility in our reported revenues and operating results due to the differences in timing of revenue recognition between
our new software licenses arrangements and cloud offering arrangements.
We have also acquired a number of cloud computing companies, and the integration of these companies into our Oracle Cloud strategy may not
be as efficient or scalable as anticipated, which could adversely affect our ability to fully realize the benefits anticipated from these acquisitions.
Our success depends upon our ability to develop new products and services, integrate acquired products and services and enhance our
existing products and services. Rapid technological advances and evolving standards in computer hardware and software development and
communications infrastructure, changing and increasingly sophisticated customer needs and frequent new product introductions and
enhancements characterize the industries in which we compete. If we are unable to develop new or sufficiently differentiated products and
services, enhance and improve our products and support services in a timely manner or position and price our products and services to meet
demand, customers may not purchase or subscribe to our software, hardware or cloud offerings or renew software support, hardware support or
cloud subscriptions contracts. Renewals of these contracts are important to the growth of our business. In addition, we cannot provide any
assurance that the standards on which we choose to develop new products will allow us to compete effectively for business opportunities in
emerging areas.
We have continued to refresh and release new offerings of our software and cloud and hardware products and services, including our Database
Multitenant, Database In-
Memory, SaaS, PaaS, IaaS, DaaS and Oracle Engineered Systems offerings. Our business may be adversely affected if:
If our security measures for our software, hardware, services or Oracle Cloud offerings are compromised and as a result, our data, our
customers’ data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be
perceived as vulnerable, our brand and reputation could be damaged, the IT services we provide to our customers could be disrupted, and
customers may stop using our products and services, all of which could reduce our revenue and earnings, increase our expenses and expose
us to legal claims and regulatory actions.
We are in the information technology business, and our products and services, including our Oracle
Cloud offerings, store, retrieve, manipulate and manage our customers’ information and data, external data, as well as our own data. We have a
reputation for secure and reliable product offerings and related services and we have invested a great deal of time and resources in protecting the
integrity and security of our products, services and the internal and external data that we manage.
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we do not continue to develop and release these or other new or enhanced products and services within the anticipated time frames;
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there is a delay in market acceptance of a new, enhanced or acquired product line or service;
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there are changes in information technology trends that we do not adequately anticipate or address with our product development
efforts;
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we do not timely optimize complementary product lines and services; or
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we fail to adequately integrate, support or enhance acquired product lines or services.