Oracle 2014 Annual Report Download - page 62

Table of Contents
Software and Cloud Business
Our software and cloud business consists of our new software licenses and cloud software subscriptions segment, our cloud infrastructure as a
service segment and our software license updates and product support segment.
New Software Licenses and Cloud Software Subscriptions:
New software licenses revenues represent fees earned from granting customers
licenses to use our database and middleware and our application software products. Cloud software subscriptions include revenues from our
cloud SaaS and PaaS offerings, which grant customers access to a broad range of our software offerings on a subscription basis in a secure,
standards-based, cloud computing environment that includes access, hosting, infrastructure management, the use of software updates, and
support. We continue to place significant emphasis, both domestically and internationally, on direct sales through our own sales force. We also
continue to market our products through indirect channels. Costs associated with our new software licenses and cloud software subscriptions
segment are included in sales and marketing expenses, cloud SaaS and PaaS expenses and amortization of intangible assets. These costs are
largely personnel related and include commissions earned by our sales force for the sale of our software offerings, marketing program costs, the
cost of providing our cloud SaaS and PaaS offerings and amortization of intangible assets.
Fiscal 2015 Compared to Fiscal 2014: Excluding the effects of unfavorable currency rate fluctuations of 5 percentage points, total new
software licenses and cloud software subscriptions revenues remained flat during fiscal 2015 as growth in our cloud SaaS and PaaS revenues and
contributions from our recent acquisitions were offset by a decline in our new software licenses revenues. In constant currency, fiscal 2015
revenue growth in the Americas region was offset by revenue declines in the EMEA and Asia Pacific regions.
As a result of our acquisitions, we recorded adjustments to reduce assumed cloud SaaS and PaaS obligations to their estimated fair values at the
acquisition dates. Due to our application of business combination accounting rules, cloud SaaS and PaaS revenues in the amounts of $12 million,
$17 million and $45 million that would have
58
Year Ended May 31,
Percent Change
Percent Change
(Dollars in millions)
2015
Actual
Constant
2014
Actual
Constant
2013
New Software Licenses and Cloud Software Subscriptions Revenues:
Americas
$
5,742
4%
6%
$
5,544
1%
3%
$
5,465
EMEA
2,715
-
16%
-
8%
3,249
10%
6%
2,959
Asia Pacific
1,563
-
10%
-
5%
1,744
-
8%
-
2%
1,897
Total revenues
10,020
-
5%
0%
10,537
2%
3%
10,321
Expenses:
Cloud software as a service and platform as a service
763
71%
76%
447
41%
42%
317
Sales and marketing
6,474
2%
6%
6,350
7%
8%
5,935
Stock
-
based compensation
179
8%
8%
166
17%
17%
142
Amortization of intangible assets
1,008
3%
3%
977
-
1%
-
1%
986
Total expenses
8,424
6%
10%
7,940
8%
8%
7,380
Total Margin
$
1,596
-
39%
-
31%
$
2,597
-
12%
-
11%
$
2,941
Total Margin %
16%
25%
28%
% Revenues by Geography:
Americas
57%
53%
53%
EMEA
27%
31%
29%
Asia Pacific
16%
16%
18%
Revenues by Software Offerings:
New software licenses
$
8,535
-
9%
-
4%
$
9,416
0%
1%
$
9,411
Cloud software as a service and platform as a service
1,485
32%
35%
1,121
23%
24%
910
Total new software licenses and cloud software subscriptions revenues
$
10,020
-
5%
0%
$
10,537
2%
3%
$
10,321
% Revenues by Software Offerings:
New software licenses
85%
89%
91%
Cloud software as a service and platform as a service
15%
11%
9%
Excluding stock
-
based compensation
Included as a component of
‘
Amortization of Intangible Assets
’
in our consolidated statements of operations
(1)
(1)
(2)
(1)
(2)