December 8, 2000 10:25 AM PST

Oracle to counter Microsoft with Web initiative

Oracle on Monday will become the latest big software company to hitch its future to Web-based software and services.

Oracle is expected to announce its technology road map for helping companies deliver services over the Web, following similar announcements from Microsoft and IBM in recent months. Company executives plan to explain how businesses can use its forthcoming 9i database and e-business software to offer new services via the Net, an Oracle representative said.

The database giant is also expected to announce two new hosted online services for renting Oracle software over the Web. Hosted services let companies lease business software over the Web for a monthly or per-use fee rather than buying and installing it themselves.

Oracle has already unveiled OracleSalesOnline.com, an online service that gives a company's sales force immediate access to sales productivity tools and critical customer information over the Web, based on a pay-per-use model.

Like many of its software rivals, Oracle envisions a future in which people don't have to install software on their PCs or Internet access devices. Instead, they will be able to access the software through the Web as a service, avoiding installation, maintenance and upgrade problems.

The Web services vision has long been touted by Oracle, Hewlett-Packard, Sun Microsystems, IBM and start-ups such as Bowstreet. Microsoft jumped on the bandwagon over the summer with its plan to tie Windows closer to the Web.

Microsoft's new thrust is part of the software giant's goal of keeping Windows the dominant operating system, even as computing begins to move from PCs to Net-enabled wireless devices such as cell phones, Web pads and personal digital assistants.

Good news for Web services
Analysts say Oracle's announcements Monday will help validate the emerging market.

"They are finally introducing an architecture and vision for Web services," said Gartner analyst Daryl Plummer. "We are in the beginning phases of the Web services evolution, but this (Oracle announcement) makes it one step closer to being legitimized."

Sun and BEA Systems are the remaining large software companies yet to announce a software strategy for Web services, Plummer said.

An Oracle representative said Oracle will explain Monday how companies can use its latest release of 8i products and future 9i products to build Web services, which the company is calling "dynamic Web services."

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Oracle sets sights on Microsoft.net
Joshua Greenbaum, analyst, Enterprise Applications Consulting
The 8i and 9i product families are Internet infrastructure software that include the database, software that stores and collects information, and an application server, software that runs e-business transactions.

Central to the Web services vision of both Oracle and Microsoft is XML (Extensible Markup Language), a Web standard for exchanging data. Oracle plans new software that will allow businesses to offer and use Web services. It will also include an online directory that software programmers can use to register their Web service so other people can access it, an Oracle representative said.

Oracle's technology will support many Web standards, including a project created by Ariba, IBM and Microsoft to create a giant online Yellow Pages for businesses to find each other to conduct trades.

As a result, the Oracle representative said, Oracle's technology will work and communicate with competing software. Because XML is the underlying standard, a company using Oracle software can conduct business with a company using Microsoft's technology.

As usual, Oracle's competitors, including Microsoft, tried to throw cold water on Oracle's anticipated Web services unveiling. "It's great that they (Oracle) are validating what the rest of the industry is doing," said Barry Goffe, group manager of Microsoft's .Net developer and enterprise group.

Analysts say early examples of Web services include the delivery of stock quotes and weather reports to cell phones and the ability to rent software, such as accounting or word processing programs, through Web sites.

Future Web services will allow e-businesses to pick and choose which services they want to subscribe to. For example, executives at an e-commerce Web site that needs a credit card validation service can do a search, find the service with the cheapest transaction fees, and then automatically subscribe and use that service.

Software makers are in various stages of releasing their software. HP, one of the more active competitors in the Web services market, has already released its "E-speak" technology. IBM has released test versions of its software. Oracle's Web services technology is available in its latest release of its 8i products, while the 9i products will be available next year, the Oracle representative said.

Microsoft plans to make its software available within two years. The software giant recently released a test version of its next-generation Visual Studio family of software development tools, a key piece in its strategy to help programmers build Web services.

Part of the plan
Oracle's expected announcement of two new hosted online services is part of the company's broad Internet strategy. Besides OracleSalesOnline, the company has created Oracle Business Online, which hosts applications, and OracleMobile, a service that provides Web information over the phone.

Joshua Greenbaum, an analyst who heads Enterprise Applications Consulting, said Oracle is likely to introduce a duo of self-service applications such as human resources or marketing automation software on a pay-as-you-go basis.

"I would expect (Oracle) to continue to push nonstrategic functions (using) the SalesOnline model," Greenbaum said. "They're not going to put supply chain management or any full-blown financial (software) package" online.

Oracle isn't the only company eyeing the potential for hosted business software. Microsoft has created bCentral, a Web site aimed at giving small businesses all the software and services they need to run their companies. And Salesforce.com, the company headed by former Oracle veteran Marc Benioff, has said that it intends to become a total provider of business software services.

Right now, Salesforce provides only sales force automation services. But Benioff has said the company intends to expand into the online financial and human resources arenas in the coming months.

News.com's Melanie Austria Farmer and staff writer Mary Jo Foley contributed to this report.

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