Oracle 2015 Annual Report Download - page 62

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Table of Contents
Excluding the effects of favorable currency rate fluctuations of 5 percentage points, total cloud software and on-premise software expenses increased during fiscal
2016 primarily due to higher employee related expenses from increased headcount and higher cloud SaaS and PaaS expenses incurred to support the related
revenues increase. These fiscal 2016 constant currency expense increases were partially offset by a reduction in expenses associated with certain of our intangible
assets that became fully amortized.
Excluding the effects of unfavorable currency rate fluctuations, our cloud software and on-premise software segment’s total margin and total margin as a
percentage of revenues decreased in fiscal 2016 due primarily to growth in our total expenses for this operating segment.
Fiscal 2015 Compared to Fiscal 2014: Excluding the effects of unfavorable currency rate fluctuations, cloud software and on-premise software revenues were
flat during fiscal 2015 as growth in our cloud SaaS and PaaS revenues and contributions from our acquisitions were offset by a decline in our new software licenses
revenues. Similar to the fiscal 2016 trend noted above, the increase in our cloud SaaS and PaaS revenues and decrease in our new software licenses revenues during
fiscal 2015 were primarily due to the strategic emphasis placed on selling, marketing and growing our cloud software offerings. In constant currency, fiscal 2015
revenue growth in the Americas region was offset by revenue declines in the EMEA and Asia Pacific regions.
In reported currency, new software licenses revenues earned from transactions of $3 million or greater decreased by 15% in fiscal 2015 and represented 31% of our
new software licenses revenues in fiscal 2015 in comparison to 33% in fiscal 2014.
Excluding the effects of favorable currency rate fluctuations, total cloud software and on-premise software expenses increased in fiscal 2015 primarily due to
higher employee related expenses from increased headcount, higher variable compensation expenses, and higher cloud SaaS and PaaS expenses incurred to support
the related revenues increase.
Excluding the effects of unfavorable currency rate fluctuations, our cloud software and on-premise software segment’s total margin and total margin as a
percentage of revenues decreased in fiscal 2015 due primarily to the growth in our total expenses during fiscal 2015 for this operating segment.
Cloud Infrastructure as a Service: Our cloud IaaS segment provides infrastructure cloud services that are enterprise-grade, hosted and supported within the
Oracle Cloud to perform elastic compute, storage and networking services on a subscription basis. Our cloud IaaS segment also offers Oracle Managed Cloud
Services, which are comprehensive software and hardware management and maintenance services for customer IT infrastructure for a fee for a stated term that are
hosted at our Oracle data center facilities, select partner data centers or physically on-premise at customer facilities. Cloud IaaS expenses consist primarily of
personnel related expenditures, technology infrastructure expenditures and facilities costs. Operating expenses associated with our IaaS offerings also include sales
and marketing expenses, which are largely personnel related, and amortization of intangible assets. For all periods presented, our cloud IaaS segment’s revenues
and expenses were substantially attributable to our Oracle Managed Cloud Services offerings.
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