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Test Number : 1Z0-336
Test appellation : Oracle Fusion Sales Cloud Service 2016 Implementation Essentials
Vendor appellation : Oracle
braindumps : 75 Dumps Questions
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(EDGAR on-line by the utilize of COMTEX) -- merchandise 7. administration's dialogue and analysis of economic condition and outcomes of Operations
We start management's dialogue and evaluation of monetary situation and results of Operations with a top even view of their agencies and demanding traits. This overview is followed via a summary of their distinguished accounting policies and estimates that they believe are essential to understanding the assumptions and judgments integrated in their mentioned fiscal consequences. They then supply a extra exact analysis of their consequences of operations and monetary situation.
Oracle organisation gives products and functions that address entire features of company tips expertise (IT) environments-purposes, platform and infrastructure. Their functions, platform and infrastructure offerings are brought to purchasers international via numerous resilient and interoperable IT deployment fashions, including cloud-primarily based, on-premise, or hybrid, which enable customer alternative and adaptability. They market and sell their choices globally to corporations of many sizes, executive corporations, tutorial associations and resellers with a worldwide income drive this is employed through their home and exotic subsidiaries and is located to present the combos that most efficacious meet consumer wants.
we Have three corporations: cloud and license; hardware; and features; each and every of which includes a single operating phase. The descriptions set forth beneath as fraction of management's dialogue and evaluation of economic situation and outcomes of Operations and the counsel contained inside celebrate 15 of Notes to Consolidated fiscal Statements blanketed somewhere else during this Annual report supply additional information related to their agencies and operating segments and align as to how their chief operating resolution makers (CODMs), which include their Chief govt Officers and Chief technology Officer, view their operating effects and designate resources.
Cloud and License company
Our cloud and license line of enterprise, which represented 82%, 80% and 78% of their total revenues in fiscal 2018, 2017 and 2016, respectively, markets, sells and provides a wide spectrum of purposes, platform and infrastructure applied sciences through their cloud and license offerings.
Cloud features and license back revenues consist of:
license sheperd revenues, which is their greatest revenues stream. Oracle license back offers rights to unspecified product improvements and renovation releases and patches launched privilege through the time period of the back length, in addition to technical sheperd counsel. notably entire of their valued clientele select to purchase license assist contracts after they purchase Oracle functions, platform and/or infrastructure licenses and extensively entire purchasers renew their license back contracts yearly in an worry to proceed to improvement from Oracle's research and development investments that are utilized as a fraction of unspecified fitful license updates that can breathe released and that purchasers with latest license aid contracts are entitled to. Their license back contracts are commonly priced as a percentage of the net charges paid by using the consumer to access the license, are generally billed in boost of the back features being carried out and are often diagnosed as revenues ratably because the assist features are delivered over the contractual phrases; and
cloud capabilities revenues, which includes revenues from Oracle Cloud utility-as-a-carrier (SaaS), Platform-as-a-carrier (PaaS) and Infrastructure-as-a-carrier (IaaS) offerings (collectively, Oracle Cloud functions), which bring purposes, platform and infrastructure applied sciences, respectively, by means of cloud-primarily based deployment models that they Strengthen performance for, host, exploit and assist and that shoppers entry by means of entering into a subscription agreement with us for a brought up duration. Their IaaS choices likewise include Oracle Managed Cloud functions, which might breathe designed to supply complete application and hardware administration, protection and safety features for customer cloud-based mostly, hybrid IT or different IT infrastructure for a imbue for a pointed out time period. the majority of their Oracle Cloud services preparations Have intervals of 12 to 36 months and are frequently identified as revenues ratably over the contractual length of the constrict or, within the case of utilization model contracts, as the cloud features are consumed. They strive to renew these cloud functions contracts when they're eligible for renewal.
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Cloud license and on-premise license revenues consist of revenues from the licensing of their software items including Oracle purposes, Oracle Database, Oracle Fusion Middleware and Java, amongst others which their shoppers utilize for cloud-based mostly, on-premise and other IT environments. Their cloud license and on-premise license transactions are frequently perpetual in nature and are generally identified when unrestricted access to the license is granted to the client offered entire different salary awareness standards are met. The timing of just a few significant license transactions can substantially affect their quarterly license revenues, which is different than the ordinary revenue cognizance pattern for their cloud features and license assist revenues through which revenues are generally identified ratably over the contractual intervals. Cloud license and on-premise license clients Have the election to buy license assist contracts, as described above.
featuring option and adaptability to their purchasers as to when and how they install their purposes, platform and infrastructure applied sciences is an distinguished aspect of their company method. In fresh periods, consumer demand has increased for their Oracle Cloud functions. To address client demand and enable customer option, we've added certain classes for shoppers to pivot their functions, platform and infrastructure licenses and license back to the Oracle Cloud for brand new deployments and emigrate to and extend with the Oracle Cloud for their latest workloads. They anticipate these tendencies to continue.
Our cloud features revenues growth and their cloud license and on-premise license revenues increase are plagued by the power of criterion fiscal and company situations, governmental budgetary constraints, the approach for and aggressive region of their choices, their acquisitions, their means to deliver and renew their cloud capabilities contracts with their existing shoppers and international exotic money expense fluctuations. Their license back revenues growth is essentially influenced with the aid of three elements: (1) the continuity of extensively entire of their license aid consumer constrict foundation renewing their license aid contracts and significantly entire consumers carrying on with to purchase license sheperd contracts in reference to their buy of a new license; (2) the pricing of license aid contracts offered in reference to the sale of latest licenses; and (3) the pricing of new licenses bought. shoppers accomplish that with a view to improvement from Oracle's analysis and construction investments that are utilized as a fraction of unspecified fitful license updates that may breathe launched and that purchasers with existing license back contracts are entitled to.
On a relentless forex groundwork, they anticipate that their total cloud and license revenues often will continue to raise because of:
anticipated increase in their cloud features and license back choices, together with the lofty percent of valued clientele that buy and renew their license aid contracts;
persevered demand for their cloud license and on-premise license offerings; and
contributions from their acquisitions.
We accept as proper with entire of these factors may noiseless fabricate contributions to future boom in their cloud and license revenues, which should allow us to proceed to fabricate investments in research and construction to enhance and increase their cloud and license items and services.
Our cloud and license enterprise' margin has traditionally trended upward over the route of the 4 quarters within a specific fiscal year as a result of the historical upward style of their cloud license and on-premise license revenues over those quarterly periods and since the majority of their charges for this traffic are commonly mounted within the short term.
Our hardware business, which represented 10%, eleven% and 13% of their total revenues in fiscal 2018, 2017 and 2016, respectively, offers a huge selection of hardware items and hardware-linked utility products including Oracle Engineered methods, servers, storage, business-selected hardware, working programs, virtualization, administration and other hardware connected utility, and connected hardware help. Hardware transactions are generally recognized as revenues upon start to the customer supplied entire other revenue attention standards are met. Their hardware enterprise additionally offers linked hardware aid. They are expecting to fabricate investments in research and construction to Strengthen existing hardware products and functions and to Strengthen new hardware products and capabilities. the majority of their hardware products are offered through oblique channels,
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including unbiased distributors and value-added resellers. Their hardware back offerings supply customers with unspecified software updates for software accessories which are primary to the functionality of their hardware products and associated utility items such as Oracle Solaris. Their hardware sheperd offerings can likewise encompass product repairs, protection capabilities and technical sheperd capabilities. Hardware assist contracts are entered into at the option of the customer, are commonly priced as a percent of the web hardware products charges and are generally identified as revenues ratably as the hardware back functions are delivered over the contractual terms.
We commonly foretell their hardware traffic to Have lower working margins as a percent of revenues than their cloud and license enterprise because of the incremental expenses they incur to provide and ration these products and to supply aid services, together with direct substances and labor charges.
Our quarterly hardware revenues are intricate to predict. Their hardware revenues, cost of hardware and hardware operating margins that they file are plagued by, among others: their means to well timed manufacture or deliver just a few giant hardware transactions; their approach for and the region of their hardware items relative to competitor offerings; customer demand for competing choices corresponding to PaaS and IaaS; the energy of widespread fiscal and company circumstances; governmental budgetary constraints; even if clients approach to a determination to purchase hardware sheperd contracts at or in shut proximity to the time of hardware product sale; the percent of their hardware assist constrict client foundation that renews its aid contracts and the near affiliation between hardware products, which Have a finite lifestyles, and consumer demand for related hardware back as hardware products age; client choices to either retain or Strengthen their present hardware infrastructure to newly developed technologies that are available; positive of their acquisitions; and exotic forex cost fluctuations.
Our services traffic helps consumers and companions maximize the efficiency of their investments in Oracle functions, platform and infrastructure applied sciences. They agree with that their capabilities are differentiated in line with their focal point on Oracle applied sciences, wide event and huge sets of highbrow property and most useful practices. Their features choices encompass consulting features, superior back features and education features and represented eight% of their complete revenues in fiscal 2018 and 9% of their total revenues in every of fiscal 2017 and 2016. Their functions enterprise has lower margins than their cloud and license and hardware businesses. Their functions revenues are impacted through, among others: their strategy for, and the aggressive position of, their services; customer demand for their cloud and license and hardware offerings and the linked functions for these offerings; their strategic stress on turning out to breathe their cloud revenues; certain of their acquisitions; habitual fiscal conditions; governmental budgetary constraints; personnel savings in their purchasers' IT departments; and tighter controls over discretionary spending.
Our selective and lively acquisition software is an additional essential factor of their company approach. In exact years, they Have invested billions of bucks to acquire a brace of complementary agencies, products, services and applied sciences, together with NetSuite in fiscal 2017.
We are expecting to continue to acquire corporations, items, services and technologies in furtherance of their corporate strategy. celebrate 2 of Notes to Consolidated monetary Statements blanketed in other places during this Annual report provides additional info concerning their fresh acquisitions.
We accept as proper with that they are able to fund their future acquisitions with their internally accessible money, cash equivalents and marketable securities, money generated from operations, additional borrowings or from the issuance of extra securities. They assay the fiscal impact of any skills acquisition in regards to profits, working margin, money circulate and return on invested capital pursuits earlier than identifying to go ahead with an acquisition.
important Accounting guidelines and Estimates
Our consolidated fiscal statements are prepared according to U.S. often permitted accounting principles (GAAP) as set forth in the fiscal Accounting specifications Board's (FASB) Accounting requisites
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Codification (ASC), and they accept as proper with the a lot of team of workers accounting bulletins and different applicable suggestions issued by means of the U.S. Securities and exchange commission (SEC). GAAP, as set forth in the ASC, requires us to fabricate certain estimates, judgments and assumptions. They accept as proper with that the estimates, judgments and assumptions upon which they count are low in cost based upon suggestions purchasable to us on the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can Have an consequence on the pronounced quantities of assets and liabilities as of the date of the fiscal statements as neatly as the stated quantities of revenues and fees throughout the durations presented. To the extent that there are transformations between these estimates, judgments or assumptions and genuine results, their monetary statements can breathe affected. The accounting policies that mirror their extra significant estimates, judgments and assumptions and which they agree with are probably the most essential to back in wholly understanding and evaluating their stated monetary results encompass:
Goodwill and Intangible belongings-Impairment Assessments;
Accounting for salary Taxes; and
prison and other Contingencies.
in lots of cases, the accounting treatment of a particular transaction is chiefly dictated by course of GAAP and does not require administration's judgment in its application. There are additionally areas in which administration's judgment in settling on among purchasable alternatives would now not capitulate a materially diverse outcomes. Their senior administration has reviewed their faultfinding accounting guidelines and related disclosures with the Finance and Audit Committee of the Board of directors.
Our sources of revenues encompass:
cloud and license revenues, which encompass the sale of: cloud features and license support; and cloud license and on-premise licenses, which symbolize licenses purchased with the aid of consumers to breathe used in each cloud and on-premise deployments;
hardware revenues, which encompass the sale of hardware items including Oracle Engineered programs, servers, storage, trade-specific hardware; and hardware aid revenues; and
functions revenues, which can breathe earned from presenting cloud-, license- and hardware-related capabilities including consulting, superior customer aid and education services.
revenue consciousness for Cloud features offerings, Hardware products, Hardware sheperd and related capabilities (Non-software facets)
Our income cognizance coverage for non-software deliverables including their cloud functions offerings, hardware items, hardware aid and linked services is based upon the accounting advice contained in ASC 605-25, salary focus, diverse-point arrangements, and they endeavor judgment and utilize estimates in reference to the resolution of the volume of cloud services revenues, hardware products revenues, hardware back and connected functions revenues to breathe diagnosed in each and every accounting duration.
Revenues from the revenue of their non-utility facets are recognized when:
Revenues for their cloud features offerings offered on a subscription basis are commonly identified ratably over the constrict time period commencing with the date the carrier is made available to purchasers. Revenues for cloud features choices bought on a utilization basis are generally diagnosed because the customer consumes the provider, supplied entire different income awareness standards Have been convinced.
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Revenues from the sale of hardware products are commonly identified upon delivery of the hardware product to the client provided entire other revenue focus criteria are convinced. Hardware assist contracts are entered into at the consumer's alternative and are diagnosed ratably over the contractual time period of the arrangements, which is customarily 12 months, provided entire other profits recognition criteria Have been convinced.
salary attention for diverse-aspect arrangements-Cloud functions offerings, Hardware products, Hardware assist and connected features (Non-utility preparations)
We enter into arrangements with consumers that purchase non-software linked products and capabilities from us on the identical time, or inside shut proximity of 1 a further (known as non-application diverse-aspect arrangements). every point inside a non-application distinct-factor association is accounted for as a separate unit of accounting provided privilege here standards are met: the delivered products or services Have expense to the customer on a standalone groundwork; and for an association that contains a ordinary privilege of return relative to the delivered products or capabilities, start or efficiency of the undelivered product or provider is considered probably and is radically controlled by course of us. They believe a deliverable to Have standalone expense if the product or carrier is offered one at a time by means of us or one other dealer or can breathe resold with the aid of the client. extra, their revenue preparations often don't encompass a established confiscate of return relative to the delivered items. the region the aforementioned standards for a separate unit of accounting aren't met, the deliverable is mixed with the undelivered point(s) and treated as a single unit of accounting for the purposes of allocation of the arrangement consideration and income awareness. For these units of accounting that consist of a brace of deliverable however are handled as a single unit of accounting, they often treasure revenues over the contractual duration of the arrangement, or in the case of their cloud functions choices, they generally respect revenues over the contractual term of the cloud services subscription. For the purposes of revenue classification of the features that are accounted for as a single unit of accounting, they designate earnings to the respective profits line objects inside their consolidated statements of operations in line with a rational and consistent methodology utilising their pattern assay of relative selling expenses of such features.
For their non-software dissimilar-aspect arrangements, they designate profits to every element based on a promoting rate hierarchy at the association's inception. The selling cost for each point is primarily based upon here selling expense hierarchy: seller-particular train evidence (VSOE) if available, third-party proof (TPE) if VSOE isn't accessible, or estimated selling rate (ESP) if neither VSOE nor TPE can breathe establish (an contour as to how they assess VSOE, TPE and ESP is provided under). If a tangible hardware product contains software, they examine no matter if the tangible hardware product and the utility work collectively to bring the product's simple performance and, if so, the complete product is treated as a non-application deliverable. the overall arrangement consideration is allocated to each separate unit of accounting for each and every of the non-utility deliverables the usage of the relative promoting expenditures of each unit in accordance with the promoting expense hierarchy. They restrict the quantity of earnings recognized for delivered points to an amount that isn't contingent upon future birth of additional items or functions or assembly of any particular efficiency situations.
When viable, they set up VSOE of selling expense for deliverables in software and non-softwaremultiple-point arrangements the usage of the rate charged for a deliverable when offered one by one. TPE is established by using evaluating an identical and interchangeable competitor items or features in standalone preparations with similarly based shoppers. If they are unable to investigate the selling rate as a result of VSOE or TPE does not exist, they assess ESP for the functions of allocating the association by course of reviewing ancient transactions, including transactions whereby the deliverable was bought on a standalone groundwork and for the intuition that a few other external and inside elements.
salary focus for Cloud License and On-Premise License and License related features (software elements)
The groundwork for their cloud license and on-premise license revenues and related services salary awareness is substantially governed with the aid of the accounting assistance contained in ASC 985-605, utility-salary cognizance. They endeavor judgment and utilize estimates in reference to the election of the quantity of cloud license and on-premise license revenues and related services revenues to breathe identified in every accounting duration.
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For license arrangements that don't require great modification or customization of the underlying license, they respect cloud license and on-premise license revenues when: (1) they enter privilege into a legally binding arrangement with a consumer for the license of software; (2) they convey the items; (3) the sale fee is fixed or determinable and freed from contingencies or huge uncertainties; and (4) collection is possibly. Revenues that aren't identified on the time of license sale since the foregoing situations don't look to breathe met, are generally diagnosed when these conditions are because of this met.
The giant majority of their cloud license and on-premise license arrangements consist of license assist contracts, which can breathe entered into on the client's choice. They recognize the related costs ratably over the time period of the association, usually one year. License back contracts provide purchasers with rights to unspecified utility product upgrades, maintenance releases and patches launched privilege through the term of the sheperd period and consist of internet entry to technical content, as well as cyber web and cell entry to technical aid personnel. License assist contracts are commonly priced as a percent of the web cloud license and on-premise license prices and are often invoiced in full initially of the aid time period. noticeably entire of their shoppers renew their license assist contracts yearly.
revenue focus for numerous-point preparations-Cloud License and On-Premise License, assist and related services (software arrangements)
We often enter into arrangements with customers that purchase cloud licenses and on-premise licenses, license back and linked functions from us at the selfsame time, or inside shut proximity of 1 one other (known as utility linked dissimilar-element arrangements). For those utility connected dissimilar-element preparations, they Have utilized the residual system to investigate the quantity of cloud license and on-premise license revenues to breathe recognized pursuant to ASC 985-605. below the residual system, if VSOE exists for undelivered aspects in a assorted-point association, VSOE of the undelivered aspects is deferred with the final component of the association consideration generally diagnosed upon start of the license. where VSOE doesn't exist for the undelivered factor in such association, no income is identified until the earlier of the factor in time at which 1) VSOE has been conditional for such point; or 2) the aspect that does not Have VSOE has been delivered.
profits awareness for distinct-element preparations-preparations with software and Non-softwareElements
We additionally enter into diverse-factor preparations that may likewise include a combination of their various software connected and non-software connected products and features choices including cloud licenses and on-premise licenses, license aid, cloud capabilities offerings, hardware products, hardware aid, consulting, advanced consumer sheperd functions and schooling. In such arrangements, they first designate the full arrangement consideration based on the relative selling expenses of the utility community of aspects as an entire and the non-application community of features. They then further designate consideration in the application community to the respective facets inside that neighborhood following the tips in ASC 985-605 and their policies as described above. in addition, they designate the glory within the non-software community to each respective aspect within that community in line with a selling fee hierarchy at the association's inception as described above. After the arrangement consideration has been allocated to the application community of aspects and non-software community of points, they account for each respective point within the arrangement as described above and below.
different revenue focus policies germane to application and Non-utility elements
lots of their cloud license and on-premise license preparations encompass consulting implementation capabilities sold one by one below consulting date contracts and are included as a fraction of their functions business. Consulting revenues from these arrangements are generally accounted for one after the other from cloud license and on-premise license revenues because the preparations qualify as capabilities transactions as defined in ASC 985-605. The extra gigantic factors considered in picking out no matter if the revenues may noiseless breathe accounted for one after the other include the character of services (i.e., consideration of even if the services are essential to the performance of the licensed product), degree of possibility, availability of features from different providers, timing of funds and Have an impact on of milestones or acceptance standards on the realizability of the license payment. Revenues for consulting capabilities are frequently identified as the capabilities are performed.
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If an association consists of dissimilar points and does not qualify for separate accounting for the product and service transactions, then cloud license and on-premise license revenues and/or hardware products revenues, including the expenses of hardware items, are often diagnosed along side the services according to constrict accounting the usage of both the percent-of-completion or accomplished-contract components.
We additionally evaluate arrangements with governmental entities containing "fiscal funding" or "termination for comfort" provisions, when such provisions are . . .
Jun 22, 2018
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