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Test Code : 1Z0-338
Test cognomen : Oracle Exadata Database Machine and Cloud Service 2017 Implementation Essen
Vendor cognomen : Oracle
: 72 real Questions
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(EDGAR on-line by route of COMTEX) -- detail 2. management's dialogue and analysis of economic situation and results of Operations
We start administration's discussion and evaluation of monetary situation and consequences of Operations with a top smooth view of their agencies, key working segments and demanding trends. This overview is adopted with the aid of a abstract of their captious accounting policies and estimates that they accept as telling with are vital to realizing the assumptions and judgments integrated in their pronounced monetary effects. They then deliver a greater detailed analysis of their results of operations and fiscal situation.
Oracle employer gives items and capabilities that address bar not one points of company counsel technology (IT) environments-application, platform and infrastructure. Their Oracle Cloud choices deliver a finished and wholly built-in stack of software, platform, compute, storage, and networking functions in bar not one three primary layers of the cloud: software as a provider (SaaS), Platform as a carrier (PaaS) and Infrastructure as a service (IaaS). Their on-premise choices encompass Oracle database and middleware software, utility utility, hardware (Oracle Engineered programs, servers, storage, networking and business-particular items), and connected advocate and capabilities. They provide their cloud and on-premise choices to clients worldwide by route of deployment models that most usurp swimsuit their wants.
Our finished and wholly built-in stack of SaaS, PaaS and IaaS offerings combine the application, hardware and capabilities on the valued clientele' behalf in IT environments that they installation, advocate and control for the client. Their integrated Oracle Cloud offerings are designed to live swiftly deployable to enable customers shorter time to innovation; with ease maintainable to sever back integration and checking out work; connectable among differing deployment fashions to permit interchangeability and extendibility between cloud and on-premise IT environments; usurp to effortlessly strain workloads between on-premise IT environments and the Oracle Cloud; competitively priced by means of requiring lower upfront client investment; and relaxed, requirements-primarily based and authentic. they are a leader within the core technologies of cloud IT environments, together with database and middleware application as well as traffic applications, virtualization, clustering, tremendous-scale systems management and related infrastructure. Their items and capabilities are the constructing blocks of their Oracle Cloud capabilities, their partners' cloud capabilities and their consumers' cloud IT environments.
moreover featuring a wide spectrum of cloud offerings, they enhance and sell their items and functions to their clients worldwide to live used in their world statistics facilities and on-premise IT environments. a crucial constituent of their company approach is to proceed their investments in, and innovation with esteem to, their items and functions that they proffer via their cloud and on-premise application, hardware and services organizations. they now believe a profound understanding as to how bar not one accessories inside IT environments-application, platform and infrastructure-engage and duty with one an extra. They focus their construction efforts on enhancing the performance, safety, operation and integration of those differing applied sciences to invent them more competitively priced and simpler to deploy, control and preserve for their valued clientele and to enrich their computing performance relative to their competitors. After the initial purchase of Oracle items and capabilities, their consumers can proceed to engage talents of their analysis and progress investments and profound IT competencies with the aid of procuring and renewing Oracle befriend choices, which may too involve product enhancements that they periodically deliver to their software items, among others, and through renewing their SaaS, PaaS and IaaS contracts with us.
As valued clientele install with the Oracle Cloud, many are adopting a hybrid IT mannequin whereby positive of their IT elements are deployed and managed through the Oracle Cloud, whereas other of their IT elements are deployed and managed on-premise,and both units of supplies will too live managed as one. They focus of attention the engineering of their products and features to most efficient relate these several deployment models to permit flexibility, ease, agility, compatibility, extensibility and seamlessness.
Our selective and lively acquisition software is one more crucial point of their company method. They accept as telling with that their acquisitions raise the items and capabilities that they can present to shoppers, extend their customer base, provide improved scale to accelerate innovation, grow their revenues and revenue, and enhance stockholder price. In fresh years, they now believe invested billions of bucks to acquire a number of agencies, items, features and applied sciences that add to, are complementary to, or believe otherwise improved their current offerings. bar not one through the 2d quarter of fiscal 2017, they received NetSuite Inc. (NetSuite), which contributed to the growth in their cloud
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SaaS and PaaS revenues, amongst others, from the date of acquisition. live sensible 2 of Notes to Condensed Consolidated financial Statements, protected in other places during this Quarterly report, offers more information involving their acquisition of NetSuite. They are expecting to proceed to acquire corporations, items, functions and technologies to further their corporate method.
we now believe three agencies that carry their application, platform and infrastructure technologies: cloud and on-premise utility, hardware and capabilities. These organizations can live further divided into positive operating segments (observe 12 of Notes to Condensed Consolidated fiscal Statements, protected somewhere else during this Quarterly report, provides additional information regarding their working segments). each of their organizations and operating segments has unique characteristics and faces several opportunities and challenges. a top smooth view of their three corporations and linked operating segments follows.
Cloud and On-Premise software company
Our cloud and on-premise utility company, which represented 80% of their complete revenues on a trailing 4-quarter groundwork, is made out of three working segments: (1) cloud utility and on-premise utility, (2) cloud IaaS and
Cloud application and On-Premise utility: Their cloud software and on-premise application line of enterprise markets, sells and offers a wide spectrum of software and platform technologies through their SaaS and PaaS choices, which might live positive of their application applications and systems that are delivered via a cloud-primarily based IT atmosphere that they host, maneuver and assist. Their cloud software and on-premise application line of traffic too licenses their application items together with Oracle functions, Oracle Database, Oracle Fusion Middleware and Java, among others, for on-premise and different IT environments.
We believe that the comprehensiveness and breadth of their SaaS, PaaS and on-premise application offerings provide superior improvement to their purchasers and differentiates us from many of their opponents that proffer more restrained or really respectable software choices. Their SaaS and PaaS choices are designed to live interoperable with one one other, thereby limiting the combination and tuning of multiple cloud applications from several providers. Their SaaS and PaaS choices are designed to bring relaxed information isolation and multifaceted improvements, self-carrier access controls for users, a carrier-Oriented architecture (SOA) for integration with on-premise systems, and a elevated efficiency, inordinate availability infrastructure based on their infrastructure technologies including their Oracle Engineered techniques. Their on-premise utility offerings are radically designed to duty on both single server and clustered server configurations for cloud or on-premise IT environments, and to advocate a choice of operating systems including Oracle Solaris, Oracle Linux, Microsoft windows and third party UNIX products, among others. Their dedication to industry requirements consequences in utility offerings that toil in customer environments with Oracle or non-Oracle hardware or software accessories and that can too live tailored to fullfil specific trade or enterprise wants. They focal point the engineering of their products and features to most efficient relate cloud and on-premise deployment models to allow flexibility, ease, agility, compatibility, extensibility and seamlessness. bar not one of these methods are designed to advocate customer option and sever back client risk. Their valued clientele encompass groups of many sizes, govt corporations, academic associations and resellers. They market and sell their cloud utility and on-premise application offerings to these customers with a revenue compel placed to proffer the combos that top of the line well client needs. They permit clients to apt and transform to significantly any IT ambiance at some thing pace is most acceptable for them.
Our SaaS and PaaS revenues and new utility licenses revenues are plagued by the power of customary financial and traffic conditions, governmental budgetary constraints, the method for and aggressive space of their utility choices, their acquisitions, their capability to carry and renew their SaaS and PaaS contracts with their current valued clientele and international alien money fee fluctuations. In recent periods, we've placed significant strategic emphasis on growing to live their cloud SaaS and PaaS revenues, which has affected the growth of their cloud SaaS and
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PaaS revenues and their new utility licenses revenues and the connected charges. They call these developments will continue. Their SaaS and PaaS arrangements are often one to a few years in duration and they try to resume these contracts when they're eligible for renewal. The vast majority of their new utility license transactions are characterized by route of lengthy sales cycles and the timing of just a few big application license transactions can greatly influence their quarterly new software licenses revenues.
Cloud utility and on-premisesoftware revenues represented 27% of their complete revenues on a trailing 4-quarter basis. Their cloud software and on-premise software phase's margin has historically trended upward over the course of the four quarters within a particular fiscal yr due to the historical upward style of their new software licenses revenues over those quarterly periods and because the majority of their expenses for this angle are predominantly mounted within the short term. As mentioned further beneath under "Supplemental Disclosure involving unavoidable charges," their cloud software and on-premise application phase's margin has been and may continue to live affected by the impartial cost adjustments concerning the cloud SaaS and PaaS tasks that they assumed in their company combos and by means of the amortization of intangible assets linked to companies and technologies that we've received.
Cloud Infrastructure as aService: Their cloud IaaS segment, which represented 2% of their total revenues on a trailing 4-quarter groundwork, provides Oracle Cloud IaaS offerings, that are infrastructure cloud capabilities that are business-grade, hosted and supported within the Oracle Cloud to operate elastic compute, storage and networking services on a subscription groundwork. Their cloud IaaS angle too presents Oracle Managed Cloud features, which might live complete software and hardware management and renovation features for customer IT infrastructure for a cost for a cited term that are hosted at their Oracle information middle amenities, opt for accomplice statistics facilities or physically on-premise at customer facilities. They dependence that their Oracle Cloud IaaS choices complement their SaaS and PaaS choices and permit us to present clients extra alternatives to entry Oracle technologies throughout the Oracle Cloud to fulfill their IT wants.
software License Updates andProduct guide: utility license updates and product advocate revenues are generated in the course of the sale of utility befriend contracts relating to on-premise new application licenses bought through their shoppers. shoppers that buy utility license updates and product assist are granted rights to unspecified product upgrades and preservation releases and patches released throughout the time epoch of the advocate length, in addition to technical advocate information. Their utility license updates and product guide contracts are frequently 12 months in length. greatly bar not one of their on-premise application license valued clientele renew their application license updates and product guide contracts yearly. The growth of application license updates and product assist revenues is primarily influenced by using four factors: (1) the percentage of their software guide compress consumer basis that renews its software aid contracts; (2) the quantity of new software guide contracts offered in connection with the sale of new application licenses; (3) the amount of new utility license revenues offered; and (4) the volume of utility befriend contracts assumed from corporations they believe received.
Our application license updates and product advocate section, which represented 51% of their total revenues on a trailing four-quarter basis, is their highest margin traffic unit. Their application befriend margins over the trailing 4-quarters believe been 93% and accounted for 87% of their total margins over the equal length. Over the long run, they accept as telling with that application license updates and product befriend revenues and margins will develop for here motives:
appreciably bar not one new software licenses transactions result within the sale of application license updates and product assist contracts, which add to their software guide compress base;
noticeably bar not one of their on-premise new application license customers, together with purchasers from bought companies, renew their utility aid contracts when eligible for renewal; and
our acquisitions believe increased their application befriend compress base, as neatly because the portfolio of items obtainable to live licensed and supported.
Our hardware traffic is made out of two operating segments: (1) hardware items and (2) hardware guide. Their hardware enterprise represented 12% of their total revenues on a trailing four-quarter groundwork. They anticipate our
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hardware traffic to believe lessen operating margins as a percent of revenues than their cloud and on-premise software enterprise due to the incremental prices they incur to supply and ration these items and to supply advocate capabilities, together with direct substances and labor fees. They are expecting to invent investments in analysis and construction to augment current hardware products and services and to develop new hardware items and functions.
Hardware products: They provide a extensive choice of hardware and linked functions, together with Oracle Engineered methods, servers, storage, networking, workstations and linked gadgets, trade-specific hardware, virtualization application, operating techniques, and management utility to advocate several IT environments, together with cloud computing environments. They engineer their hardware products with virtualization and administration capabilities to enable the swift deployment and efficient management of cloud and on-premise IT infrastructures. Their hardware items aid many of the world's greatest cloud infrastructures, including the Oracle Cloud.
Our hardware items are designed to live simpler to install, manage and preserve for their shoppers and to enrich computing efficiency relative to their opponents' offerings. They design their hardware products to seamlessly connect cloud and on-premise IT environments to further permit interoperability, interchangeability and extendibility and to toil in client environments that may too encompass other Oracle or non-Oracle hardware or software components. Their springy and open approach gives Oracle valued clientele with a big ambit of choices in how they install their hardware products, which they harmonize with is a precedence for their customers.
Oracle Engineered programs are core to their hardware offerings and are essential elements of their information focus and cloud computing choices together with the Oracle Cloud. These pre-integrated products are designed to combine numerous Oracle technology components to toil collectively to bring greater efficiency, availability, protection and operational efficiency relative to their competitors' products; to live upgraded conveniently and successfully; and to simplify renovation cycles through featuring a single retort for software patching. Oracle Engineered programs are confirmed before they're shipped to valued clientele and delivered capable-to-run, enabling customers to curtail deployment time to production. They present positive of their Oracle Engineered methods technologies through bendy deployment alternate options including as a cloud carrier and for on-premise IT environments.
We proffer a wide ambit of server products the consume of their SPARC microprocessor. Their SPARC servers elope the Oracle Solaris operating gadget and are designed to live differentiated by route of their reliability, security and scalability. Their mid-size and big servers are designed to present enhanced efficiency and lessen complete impregnate of possession than competitive UNIX programs for enterprise captious applications, for purchasers having extra computationally intensive wants, and as structures for constructing cloud computing IT environments. Their SPARC servers are too a core Part of the Oracle SuperCluster, one in every of their Oracle Engineered techniques.
We additionally present commercial enterprise x86 servers. These x86 servers are based on microprocessors from Intel enterprise and are compatible with Oracle Solaris, Oracle Linux, Microsoft windows and different working programs. Their x86 servers are additionally a core Part of many of their Oracle Engineered systems including the Oracle Exadata Database desktop, Oracle Exalogic Elastic Cloud, Oracle Exalytics In-reminiscence machine and the Oracle big statistics appliance.
Our storage products are engineered for the cloud and designed to securely save, control, protect, archive, backup and recover clients' mission captious records property. Their storage products involve disk, flash, tape, digital tape and hardware-linked software including file programs software, returned-up and archive utility, hierarchical storage management software and networking for mainframe and heterogeneous methods environments. They too proffer positive of their storage offerings as a cloud service.
Our networking and information focus cloth items, together with Oracle digital Networking, and Oracle InfiniBand and Ethernet technologies, are used with their server and storage items and are built-in into their management paraphernalia to assist traffic purchasers augment infrastructure performance, sever back can impregnate and complexity and simplify storage and server connectivity.
We present hardware products and functions designed for positive particular industries. Their point-of-sale hardware choices involve point-of-sale terminals and related hardware that are designed for managing groups inside the food and beverage, lodge and retail industries, among others. Their hardware items and features for
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communications networks encompass network signaling, policy control and subscriber facts management options, and session rim manage expertise, among others.
nearly bar not one of their hardware products are sold via roundabout channels, including impartial distributors and cost-added resellers.
to bear their hardware products, they import on each their internal manufacturing operations as well as third birthday party manufacturing companions. Their internal manufacturing operations consist essentially of substances procurement, meeting, checking out and nice manage of their Oracle Engineered programs and unavoidable of their enterprise and information core servers and storage items. For bar not one other manufacturing, they generally import on third birthday party manufacturing companions to provide their hardware-connected add-ons and hardware items and they can too accommodate their internal manufacturing operations in the closing assembly, testing and nice maneuver techniques for these add-ons and items. They ration most of their hardware products both from their amenities or companion facilities. They strive to reduce costs by using simplifying their manufacturing processes through expanded standardization of components across product varieties and a "construct-to-order" manufacturing method during which items generally are constructed best after shoppers believe positioned company orders.
Our hardware products revenues, can impregnate of hardware items and hardware working margins that they report are plagued by their approach for and the competitive space of their hardware items, the power of widespread financial and enterprise circumstances, governmental budgetary constraints, positive of their acquisitions and overseas forex fee fluctuations.
Our quarterly hardware items revenues are problematic to foretell. The timing of client orders and delays in their potential to timely manufacture or convey a number of immense hardware transactions, among other factors, could extensively believe an upshot on the volume of hardware products revenues, prices and working margins that they report.
Hardware support: Their hardware befriend offerings provide purchasers with utility updates for application components which are elementary to the performance of their hardware products, akin to Oracle Solaris and unavoidable other application products, and may involve product repairs, renovation services and technical guide functions. typically, their hardware befriend compress arrangements are priced as a percentage of the internet hardware products expenses, are invoiced to the consumer firstly of the befriend epoch and are 12 months in period. They continue to conform hardware advocate strategies which are intended to proactively determine and resolve Great considerations and to augment the volume of latest and renewed hardware advocate contracts bought in connection with the revenue of their hardware items. Their hardware befriend revenues that they report are influenced via a few factors, together with the extent of purchases of hardware items, the pricing and blend of hardware items purchased, whether valued clientele choose to purchase hardware befriend contracts at or in nigh proximity to the time of hardware product sale, the percent of their hardware guide compress client basis that renews its aid contracts and their acquisitions. considerably bar not one of these factors are closely influenced by their consumers' selections to either maintain or upgrade their present hardware infrastructure to newly developed technologies that can live found.
Our capabilities business, which represented eight% of their total revenues on a trailing 4-quarter basis, is comprised of the residue of their working segments. Their services traffic has lessen margins than their cloud and on-premise application and hardware corporations. Their capabilities revenues are impacted by their approach for and the aggressive position of their services, unavoidable of their acquisitions, customary financial circumstances, governmental budgetary constraints, personnel discounts in their customers' IT departments, tighter controls over discretionary spending, their strategic emphasis on transforming into their cloud revenues and the augment in their software and hardware offerings. Their features enterprise' choices include:
consulting features that are designed to advocate their consumers and international system integrator companions extra successfully architect and deploy their offerings, together with IT strategy alignment, commercial enterprise structure planning and design, initial cloud and software implementation and integration, and ongoing software enhancements and upgrades. They utilize a global, blended delivery model to optimize value for their clients and partners, consisting of on-premise consultants from local geographies, industry consultants and consultants from their world birth and retort centers;
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schooling features for Oracle products and features, together with working towards and certification classes which are provided to customers, companions and employees via a number of codecs, together with teacher-led classes at their schooling facilities, are living digital training, self-paced on-line practicing, inner most routine and customized practicing.
Our selective and energetic acquisition software is another captious point of their corporate approach. In coincident years, they believe invested billions of dollars to purchase a few complementary agencies, items, features and applied sciences.
we believe obtained unavoidable companies and technologies bar not one over the fiscal 2017 and 2016 durations introduced during this Quarterly document, including NetSuite. notice 2 of Notes to Condensed Consolidated financial Statements included in different places during this Quarterly record gives additional information regarding their fresh acquisitions.
We deem that their acquisition application strengthens their aggressive place, enhances the products and capabilities that they are able to present to purchasers, expands their customer base, gives more advantageous scale to accelerate innovation, grows their revenues and earnings and raises stockholder value. They anticipate to continue to acquire corporations, items, features and technologies in furtherance of their company method.
We harmonize with that they can fund their pending and future acquisitions with their internally purchasable cash, money equivalents and marketable securities, money generated from operations, further borrowings or from the issuance of additional securities. They rate the monetary believe an repercussion on of any abilities acquisition with reference to revenue, operating margin, money movement and recrudesce on invested capital objectives before figuring out to stream forward with an acquisition.
crucial Accounting policies and Estimates
Our consolidated financial statements are organized in response to U.S. generally approved accounting concepts (GAAP) as set forth within the fiscal Accounting necessities Board's (FASB) Accounting necessities Codification (ASC), and they harmonize with the a considerable number of body of workers accounting bulletins and other applicable information issued by route of the U.S. Securities and exchange fee. GAAP, as set forth in the ASC, requires us to live sure estimates, judgments and assumptions. They dependence that the estimates, judgments and assumptions upon which they depend are within your means based mostly upon tips attainable to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can influence the pronounced quantities of assets and liabilities as of the date of the financial statements as smartly as the reported amounts of revenues and fees bar not one through the intervals offered. To the extent that there are adjustments between these estimates, judgments or assumptions and genuine results, their monetary statements will live affected. The accounting guidelines that mirror their extra colossal estimates, judgments and assumptions and which they believe are probably the most captious to aid in completely figuring out and evaluating their said fiscal outcomes encompass:
Goodwill and Intangible assets-Impairment Assessments;
Accounting for revenue Taxes; and
criminal and other Contingencies.
in lots of circumstances, the accounting medicine of a particular transaction is peculiarly dictated through GAAP and does not require management's judgment in its utility. There are too areas wherein administration's judgment in picking out . . .
Mar 17, 2017
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