We develop, manufacture, market, distribute and service database software and
infrastructure software, including application server, collaborative software
and development tools, that help our customers manage and grow their businesses
and operations. We also offer an integrated suite of business applications software.
Our goal is to provide a wide range of customers with scalable, reliable and
secure database technology software and integrated business applications software
that give them transactional efficiency and quality information at a low total
cost of ownership.
We are organized into two businesses, which are further organized into five
operating segments. Our software business is comprised of two operating segments:
(1)'new software licenses and (2)'software license updates and product support.
Our services business is comprised of three operating segments: (1)'consulting,
(2)'advanced product services, and (3)'education.
Sales Distribution Channels
In the United States, we market our products and services primarily through
our own direct sales and service organization. Sales and service employees are
based in our headquarters and in field offices located in approximately 55'metropolitan
areas.
Outside the United States, we market our products and services primarily through
our subsidiary sales and service organizations. Our subsidiaries license and
support our products in their local countries as well as within other foreign
countries where we do not operate through a direct sales subsidiary.
We also market our products worldwide through indirect channels. The companies
that comprise our indirect channel network are members of the Oracle Partner
Network. Our partners resell our products or combine our database, development
tools and applications with computer hardware, software application packages
or services for subsequent redistribution and/or implementation.
The Oracle Partner Network allows us to pursue new business opportunities through
partners as well as with direct customers. Partners in the program include consultants,
education providers, internet service providers, network integrators, resellers,
independent software vendors and system integrators/implementers. Partners can
also participate in the Oracle Technology Network. This program is specifically
designed for the database administrator, internet developer and applications
suite user communities. We provide applications, technology, education and technical
support that enable our partners to effectively integrate our products into
their business offerings. The combination of the Oracle technology stack, the
Oracle E-Business Suite and our partners' expertise broadens our exposure in
new markets.
International
We have offices in more than 70 countries and conduct business worldwide. We
believe our geographic diversity allows us to draw on business and technical
expertise from a worldwide workforce, provides stability to our operations and
revenue streams to offset geography-specific economic trends and offers us an
opportunity to take advantage of new markets for maturing products.
Customers
Our customer base consists of a significant number of businesses of many sizes,
government agencies, educational institutions and resellers. Our primary industry
markets include defense and government, education, financial services, technology,
transportation, life sciences, telecommunications, manufacturing and healthcare.
Competition
The software industry is intensely competitive and rapidly evolving. We compete
in various markets including the database management system, data warehouse,
collaboration, application server, development tools, applications, consulting,
education and outsourcing markets. Total cost of ownership, performance, functionality,
ease of use, product reliability, security and quality of technical support
are the key competitive factors that face us in each of the markets in which
we compete.
Our principal software competitors in the database management system and collaboration
markets are International Business Machines Corporation and Microsoft Corporation.
In the data warehousing market, our online analytical processing products compete
primarily with those of Business Objects S.A., Cognos Incorporated, Hyperion
Solutions Corporation and NCR Corporation. In the application server market,
our competitors include BEA Systems, Inc., IBM, Microsoft and SAP Aktiengesellschaft
Systeme. In the development tools market, we compete primarily against Borland
Software Corporation, IBM and Microsoft. In the applications market, we compete
against Lawson Software, Inc., Microsoft, PeopleSoft, SAP, Siebel Systems, Inc.
and many other application providers, as well as outsourced and in-house solutions
for customers. We may also face competition in the open source software initiatives,
in which companies such as JBoss and MySQL provide software and intellectual
property free over the internet. Among the business process outsourcers that
we compete against include Automatic Data Processing, Inc., Fidelity Investments,
Ceridian Corporation, Hewitt-Cyborg Limited and others. In the consulting and
technical outsourcing markets, we periodically compete against Accenture Ltd.,
Electronic Data Systems Corporation, IBM Global Services and other smaller service
providers.
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