Oracle's New App Server Targets Midmarket

At Oracle OpenWorld London, the Redwood Shores, Calif.-based software vendor unveiled Oracle Application Server, Standard Edition One: a combination of application server, Web server and portal software. The new software is priced at $4,995 per CPU for up to two processors or $149 per user with a minimum of five users through Oracle's Named User Plus licensing program.

CRN previously reported that Oracle planned to launch a midmarket version of its 10g application server at the show. Oracle is positioning the release squarely against Microsoft's Small Business Server in the hope it will lure customers in the midsize enterprise market, Thomas Kurian, senior vice president of application servers, said in a CRN interview in early August. The new software and pricing is suited for departmental applications in large enterprises as well.

Oracle also took the wraps off a new version of its e-business suite at the conference.

While Microsoft has traditionally dominated the midmarket, IBM and other Java software vendors have been making a serious play for those customers in the past couple of years. So far, there is little evidence that these vendors are wresting much business away from Microsoft. However, one Oracle solution provider said midmarket customers have been more receptive to hearing about Oracle 10g Application Server in the past six months.

"From a business perspective, there has been an uptick in the middle tier from the application server side," said Ron Holleman, vice president of sales at Tenure Systems, Dallas. "A number of businesses have been more interested [in] what Oracle has to offer."

Holleman attributed this interest partly to the fact that companies are consolidating the number of vendors they work with. "People are tired of best of breed," he said. "[They figure], 'The database is working; let's see what else they have to offer.' "

Holleman added that since Rauline Ochs joined Oracle as group vice president of North American channels last year, the company's partner messaging has been more channel-friendly overall.

In fact, Oracle has invited channel partners to a strategic account partner kickoff meeting in Chicago Sept. 15. This marks the first time Oracle has formally invited partners to meet with its largest customer accounts, according to Holleman. "They're finally opening those up," he said.

Oracle's new midmarket pricing and packaging also might help the vendor capitalize on recent organizational turmoil at BEA Systems that has resulted in the departure of a number of the company's top management and channel executives. In fact, some analysts believe Oracle may make a play to buy the San Jose, Calif.-based vendor. In its lawsuit against the Department of Justice, Oracle revealed that BEA is on its short list of potential acquisition targets.

A July 2004 report by research firm IDC stated that Oracle grew its North American market share more than 11 percent in the application server software platform space from 2002 to 2003. In the same period, BEA lost 4.3 percent market share and IBM gained 6 percent, according to the report.