Oracle Renews Focus on Application Server

Thomas Kurian, senior vice president of development for Oracle 9i Application Server, says the company is dedicating more resources and energy to building its Internet application server business. The second largest software company in the world has been promoting the Oracle 9i Application Server Release 2, which will feature support for Java Enterprise Edition 1.3, and has also separated its application server business into its own dedicated division, similar to Oracle's database division. In addition, Oracle is concentrating on building more partnerships with both software vendors and solution providers to increase channel sales.

"The ISV community is coming on board strongly now," Kurian says. "We have close to 800 software vendors porting their products to 9iAS. We're also getting traction with Big Five and second-tier integrators, with more than 3,000 partners trained for 9iAS."

Oracle says its application server customer base tripled in 2001 and that 9iAS has more than 10,000 customers currently. The company also claims Oracle 9i is the fastest-growing application server in the market, with 96 percent year-over revenue growth in the first quarter of fiscal 2002.

Kurian, who delivered a keynote at JavaOne in San Francisco last month, and other member's of Oracle's app server team have been hard at work trying to attract Java developers to 9iAS. John Magee, senior director of product marketing for Oracle 9iAS, says Oracle's committment to Java has helped bring in more Java developers to support 9iAS.

"I think BEA got out in front of us early on in terms of getting Java developers, but now were seeing the trend reverse," Magee says.

Magee also says Oracle is now using its installed base for its database products, which leads the market, to help bolster sales for its application server business.

"We're leveraging existing resellers on the database side for our application server technology," Magee says. "We want to put a 9iAS in front of every Oracle database."

Gartner recently called Oracle 9i a "dark horse" in the application server race not to be counted out against BEA and IBM, which currently control the number one and number two market share spots, respectively, combining for more than two-thirds of the entire market.

Oracle is also championing a recent report from IT analyst firm Hurwitz Group, which declared Oracle number one in the Internet application server market in terms of "organizational penetration" or customer deployments in North America. Hurwitz analyst Evan Quinn wrote that Oracle's application server business is stronger than most people previously thought, primarily based on its database business. Quinn also wrote Oracle 9iAS offers a lower cost of ownership.

"Oracle's pricing runs somewhat lower when compared to BEA and IBM, and Oracle possesses a strongly integrated product story with wide product family breadth," Quinn wrote.

Pricing, however, has been a point of contention for Oracle customers lately. Both the Meta Group and Gartner have criticized Oracle for reinterpreting licensing agreements that have allegedly charged database customers higher fees for existing agreements. Some analysts have suggested Oracle is trying to squeeze additional revenue from current customers after the company's license sales fell steadily over the last few quarters. Oracle officials say the company is simply enforcing the rules of its licensing agreements and performing the usual amount of customer audits.

Whether the negative sentiment damages Oracle's momentum remains to be seen. The software giant has clearly highlighted the channel as a key to growing its application server business, and Oracle insists it has adopted a more partner-friendly approach. Kurian says the company has trained approximately 900 solution providers--some of which were existing database resellers--on its application server over the last three months, and will continue to grow its channel business for 9iAS.

"The VAR community is essential to our application server business because they are the ones that are building the applications on the platform," Kurian says.