Does Oracle even talk about databases anymore?
True, the company recently bragged that Oracle 9i was unbreakable and intermittently mutters about Release 2, which will arrive this summer boasting some cool new native XML capabilities. But for most of the last year, the Oracle marketing machine has focused relentlessly on the Oracle 11i E-Business Suite.
Analysts say the reason behind Oracle's 11i obsession is that the database business has stabilized--so the company needs to plow e-business opportunities to grow revenue. But that's not the only reason. Oracle's chief rival, IBM, is nibbling away at Oracle's database market share by offering wide-ranging solutions that include DB2 as part of the package. Likewise, when customers purchase Oracle 11i, they're also buying the Oracle 9i database, which 11i uses for its data store.
Leaving aside the issue of making up for lagging database sales, Oracle's push to sell a monolithic suite of 11i applications is diametrically opposed to IBM's systems-integration approach. At this month's Oracle AppsWorld, Larry Ellison proudly called 11i "probably the largest collection of application software ever produced by a single vendor."
But Ellison also made an uncharacteristic admission about 11i's capabilities: "It is literally impossible to anticipate absolutely everything a customer could want in every industry." Previously, Oracle had warned customers against customizing 11i, arguing that any changes would bleed time and money. Worse, a customized version of 11i could easily screw up the installation of future upgrades.
Understandably, customers balked at this hands-off decree. So now Ellison is encouraging customers to use Oracle's J2EE-based 9i Application Server and integrated JDeveloper development environment to add functionality where needed--as long as customers don't modify Oracle's code, which is still a no-no.
The central proposition of Oracle 11i, however, still stands: Buy all your e-business applications from us. On a philosophical level, the underlying argument--a single data model for enterprise apps, all of which run on the same application server--is powerful. For example, Ellison says that if you scatter customer marketing, sales, and billing information among diverse applications, you'll never get "a 360-degree view" of your customers. Buy the whole Oracle 11i enchilada and all your applications use the same data store--giving you instant access to that unified view. Plus, you'll avoid spending all that time and money on systems integration.
The problem, as many have pointed out, is reality. No large enterprise is going to clear the decks and start fresh with an all-Oracle shop. At least, not now. The time for ripping and replacing was the 1990s, when everyone installed client/server ERP systems in preparation for Y2K. Leaving aside the decline of Baan, ERP market share numbers have changed little since then (SAP leads with about a third of the market, Oracle's in second with 15 percent). That's why Oracle is pitching attractive new 11i upgrade programs to its existing e-business customers, half of whom still run the old Oracle 10.7 client/server version.
Oracle's best source of converts to its unified solution may be SMEs that opt for a hosted solution. Because 11i is browser-based anyway, businesses that can stomach the idea of someone else maintaining their critical data can save a lot of server deployment hassles. In fact, Oracle hopes to reap $1 billion in revenue from hosted services over the next five years.
But ultimately, customers would be better-served if Oracle faced the fact that we live in an increasingly modular, integrated world. Even Ellison acknowledges that customers can use its app server and Java development tools to integrate 11i with legacy software--and what happens to the single data model then?
In the real world, large businesses always have to integrate multiple data stores. Oracle has a great foundation for the systems integration it scorns with Oracle 9i Application Server plus portal and business intelligence solutions to match. Let's hope that the next Oracle concession is to drop the hard sell, encourage customers to choose just the Oracle e-business applications they need, and use Oracle's J2EE platform to pull their motley crew of enterprise apps together.
Is the single data model promised by 11i the sweet spot for enterprise apps--or just sweet talk on the part of Oracle? E-mail Eric or TalkBack below.
