Oracle 2014 Annual Report Download - page 46

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Table of Contents
the acquired businesses as independent entities in the amounts of $4 million, $11 million and $14 million for fiscal 2015, 2014 and 2013,
respectively. To the extent underlying hardware systems support contracts are renewed with us following an acquisition, we will recognize the
revenues for the full values of the hardware systems support contracts over the respective support periods.
Services Business
Our services business, which represented 9%, 10% and 11% of our total revenues in fiscal 2015, fiscal 2014 and fiscal 2013, respectively, is
comprised of the remainder of our operating segments. Our services business has lower margins than our software and cloud and hardware
businesses. Our services revenues are impacted by our strategy for and the competitive position of our services, certain of our acquisitions,
general economic conditions, governmental budgetary constraints, personnel reductions in our customers’ IT departments, tighter controls over
discretionary spending and the growth in our software and hardware systems products revenues. Our services business’ offerings include:
Acquisitions
A selective and active acquisition program is another important element of our corporate strategy. In recent years, we have invested billions of
dollars to acquire a number of complementary companies, products, services and technologies including MICROS Systems, Inc. (MICROS) in
fiscal 2015, Responsys, Inc. (Responsys) and Tekelec Global, Inc. (Tekelec) in fiscal 2014, and Acme Packet, Inc. (Acme Packet) in fiscal 2013,
among others. We believe our acquisition program strengthens our competitive position, 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. We expect to continue to acquire companies, products, services and technologies in furtherance of our corporate strategy.
Note 2 of Notes to Consolidated Financial Statements included elsewhere in this Annual Report provides additional information related to our
recent acquisitions.
We believe we can fund our future acquisitions with our internally available cash, cash equivalents and marketable securities, cash generated
from operations, additional borrowings or from the issuance of additional securities. We estimate the financial impact of any potential
acquisition with regard to earnings, operating margin, cash flow and return on invested capital targets before deciding to move forward with an
acquisition.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP) as set forth in the
Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) and we consider the various staff accounting
bulletins and other applicable guidance issued by the United States Securities and Exchange Commission (SEC). GAAP, as set forth within the
ASC, requires us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which
we rely are reasonable based upon information available to us at the time that these
42
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consulting services that are designed to help our customers and global system integrator partners more successfully architect and deploy
our products, including IT strategy alignment, enterprise architecture planning and design, initial product implementation and
integration, and ongoing product enhancements and upgrades. We utilize a global, blended delivery model to optimize value for our
customers and partners, consisting of on-premises consultants from local geographies, industry specialists and consultants from our
global delivery and solution centers;
•
advanced customer support services, which are provided on-premises 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.