Oracle shedding its skin for the 'Net

Last week's annual Oracle OpenWorld '99 conference showed a company that's racing to change itself as the Internet changes Oracle's customers.

For the past 18 months, Oracle has been shifting its message. It's no longer a database company; rather, it's the company whose software "powers the Internet."

As proof, the company points to top consumer Web sites, such as Amazon.com, that rely on the Oracle database and related products to support buying and selling over the Internet.

Jeremy Burton, Oracle's vice president of Internet platform marketing, claims that some venture capitalists now refuse to fund Internet start-ups unless Oracle software is part of the start-ups' business plans.

But the reality is a bit more complex, as shown by Oracle's numbers for the past five fiscal quarters. Gains have been steady, and in some quarters, remarkable. And Oracle's most important product - Oracle8i - is doing well.

Oracle says 5,000 8i licenses have been sold since the product was released last spring. However, what's not clear is the rate of migration from earlier Oracle versions to 8i. And Oracle officials, from CEO Larry Ellison on down, won't be specific about migration figures.

But Burton says that in a recent Oracle survey of 3,600 companies, 845 said they planned to deploy 8i within three months, and another 1,500 planned to do so within a year. About one-third of all respondents cited Java (which is supported in 8i along with Oracle's Jdeveloper tool set) as the main reason for moving to 8i.

But many customers still rate traditional concerns such as scalability and reliability far above any grandiose concepts that Oracle might have.

"I looked at Windows NT and Microsoft SQL Server on NT and concluded that NT will never scale, at least in my lifetime," says Max Gano, director of technologies at Onvia.com, a start-up that provides small companies with a variety of online business and operational services. "You need an operating system and database that can scale in a high-availability environment. That is much more mature with the Sun Solaris-Oracle combination. I can't take chances."

Many Oracle Applications users take a similar tack. Oracle Applications is a package of customer relationship management and back-end business and financial applications designed to work together through the Oracle database.

But that's not why Specialized Bicycle Components in Morgan City, Calif., ended up using Oracle for its e-commerce launch. The $200 million-per-year company, which despite the name, builds bicycles and sells them through a nationwide network of retailers, had already selected Oracle Applications to run its internal business systems.

When Specialized Bicycle sought bids for a Web-based e-commerce site, executives were dismayed at the steep costs. And they were even more dismayed to realize they were still expected to tie the Web site into their back-end applications on their own, Chief Information Officer Ron Pollard says.

The answer was to go with Oracle iStore: a ready-to-use, Web-based electronic store that has tight links with back-end Oracle Applications.

"We went from the original idea of having a Web site to going live in just seven months," Pollard says.

In the long run, one of Oracle's most critical steps may be one that's largely invisible to most of the industry: the wooing of hundreds of thousands of application developers.

New approach

According to Burton, Oracle did something brand new when it launched Oracle 8i: The company spent $20 million to reach application developers, explaining and showing them how Internet applications could be built with the new technologies.

The company created a Web site, Oracle Technology Network, whose membership has exploded from 50,000 to more than 450,000 in the past 12 months. However, it's not clear from that total how many members are active or how active they are.