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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: lml who wrote (15335)	2/21/2001 7:57:56 PM
From: Bipin Prasad	Read Replies (1) \| Respond to of 19079

Oracle sets up new division for software services By Siobhan Kennedy NEW YORK, Feb 21 (Reuters) - Oracle Corp.(NASDAQ:ORCL), seeking to boost sales of its enterprise and front office software, is setting up a new division called Oracle.com to target the small but growing market for renting software over the Internet. The moves marks the first time Oracle, a leading maker of software used in electronic commerce, has brought all its hosted offerings together under one umbrella, said Jeremy Burton, Oracle's senior vice president of product and services marketing. "We're creating a single brand name around software services," he told Reuters. "So from now on you'll only hear us talk about Oracle, the software business, and Oracle.com, the software services business ." Oracle, which announced the Oracle.com division at its applications user conference in New Orleans this week, is not new to the application services provider market, where companies access software over the Web on a monthly, pay-as-you-go basis. Boston based AMR Research says the ASP market was worth $350 million in 1999 and increased to $950 million in 2000. Looking ahead, however, the analyst firm says the market will decrease in size, to just $800 million, in 2001, on account of businesses' lack of uptake for rented software. Redwood Shores, Calif.-based Oracle already offers its enterprise and front office software over the Internet, through its Oracle Business Online unit. In addition, it hosts portal software, effectively a gateway into a company's Web site. It also hosts and manages online business-to-business exchanges, which bring buyers and sellers together over the Internet. Oracle is not the only large high tech vendor to push the "software as a service" message. Microsoft Corp. (NASDAQ:MSFT) is doing something similar with its .Net server software initiative, while Hewlett-Packard Co touts its e-Services strategy and SAP AG (SAPG) (SAPG_p) its mySAP.com Internet mantra. Oracle has an opportunity to sell its software over the Internet, but not if it targeted its usual customer base of large enterprises, said Sanjiv Hingorani, analyst with Dresdner Kleinwort Wasserstein. "If it goes for large businesses, which are Oracle's primary customers, I think the opportunity is limited because most large enterprises want control of their IT infrastructure themselves," he said. "This market has been one which has been talked about a lot but I don't see any meaningful revenues for anyone," he said. "Not Oracle, or any of the third party hosting companies like USinternetworking Inc. (NASDAQ:USIX) or Corio Inc. (NASDAQ:CRIO)." Burton noted, however, that last year, just one-tenth of a percent of Oracle customers were accessing its applications for a fee over the Internet. "But today it's 11 percent," he said. "And we expect that figure to massively ramp up over time." Oracle will offer its software alongside Internet content, such as news bulletins or stock quotes relevant to each industry, such as financial services or electronics, he said. Burton said Oracle's story was much more convincing than those of its competitors because its software was designed from ground up to run over the Internet.