March 11, 2002 5:05 PM PST

Oracle enhances hosted business apps

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The latest version of Oracle's Small Business Suite moves into the lucrative and popular customer relationship management arena.

The new version of the software, developed and hosted by start-up NetLedger and marketed by Oracle, now includes tools for storing product information and coordinating with marketing partners. NetLedger, financially backed by Oracle Chief Executive Larry Ellison, had already added sales and customer-service components to the software package last fall.

The changes should widen the packages' appeal, according to NetLedger CEO Evan Goldberg. Currently sold mostly to companies with 25 employees or fewer, the upgraded version should appeal to companies with as many as 250 employees.

Goldberg launched the company in 1998 with Ellison, to offer small businesses an alternative to off-the-shelf bookkeeping software from Intuit and Microsoft with an application hosted on the Web.

Last year, Oracle announced it would help sell the suite and brand it as an Oracle product in exchange for a share of NetLedger's revenues, which totaled $2.5 million last year, according to Goldberg.

The company lags behind faster-growing rivals, such as Salesforce.com, another start-up in which Larry Ellison holds a stake. Salesforce.com, which offers hosted CRM software, booked nearly $25 million in revenue last year, according to CEO Marc Benioff.

CRM applications, which are used by a company's entire sales organization, have higher revenue potential for software companies than accounting applications, which may be used by only one or two employees of a small business, said Benioff.

NetLedger also faces competition from Microsoft, which sells hosted and off-the-shelf accounting applications for small businesses and recently announced plans to release a set of CRM applications for small companies by the end of the year.

 

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