Oracle: More Than Just The Database These Days
Condensing 75 products into two is firm's latest move in becoming an e-business
By DAN VERTON
When Oracle Corp. CEO Larry Ellison called the PC "a ridiculous device" at the European IT Forum in 1995, many industry onlookers chalked up his comments to little more than a personal rivalry with Microsoft Corp. Chairman Bill Gates.
However, when Ellison repeated those words at this month's Oracle OpenWorld conference in San Francisco, people listened as Ellison described Oracle's transformation from a database vendor only to a full-fledged e-business focused on the Internet.
"Software is destined to become a service," said Ellison. "We look at every [application service provider] not as a threat but as a potential customer."
According to Ellison, Oracle wants to change the way software is manufactured and sold. As a first step, the company has embarked upon a somewhat risky plan to consolidate its 75 different product offerings into two Web-centric packages.
"We engineer our products to work together. It's a fundamentally different view of the world" - one that's particularly different from the traditional systems integration model, Ellison said.
And Oracle has taken steps to prove it. In fact, according to Chuck Rozwat, executive vice president for server technologies, the company saved a billion dollars last year by "eating its own dog food" - that is, by using its own software to convert Oracle from a traditional business to an e-business.
Users seem to be paying attention. "We're seeing the shift to the Internet in our users as well," said Rich Niemiec, president of the International Oracle Users Group in Chicago. "The fact that they use their own software is huge. Users think [Oracle is] more likely to fix glitches."
The key factor in Oracle's plans has been its recently released Oracle9i Database server and Oracle9i Application Server (iAS), which consolidated more than 75 of the company's products. The iAS release also includes a patent-pending Web-cache technology that works with server clusters to dramatically increase Web performance and is able to tolerate machine failures.
"Oracle is far more than a database company," said Phil Russom, director of business intelligence at Hurwitz Group Inc. in Framingham, Mass. "In hindsight, I can now see that what I once thought was an unrealistically aggressive and possibly dangerous product consolidation plan has now turned out to be a long-range and accurate vision of what is required for a broad, scalable and robust platform for Internet-based applications."
However, the consolidation of products has both an upside and a downside, said Russom. Although it may simplify licensing and integration for many customers, he said, others may be forced to buy the application server in order to get the individual products they need, such as Oracle's reporting tool. "This may increase integration tasks and may possibly increase the cost of the software," he noted.
And many long-time Oracle users say they aren't happy with pricing changes that have accompanied the new products. Some customers told Computerworld that they're so upset by what they view as exorbitant capacity-based pricing that they're actively evaluating alternatives to Oracle [News, Sept. 18, Oct. 9].
There are other risks to Ellison's long-term vision as well. "I think the main missing element of their ASP platform is a competitive [Enterprise JavaBeans] application server," said Mike Gilpin, an analyst at Giga Information Group Inc. in Cambridge, Mass.
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