Ellison bets on the 'Net

By Marc Ferranti and Sandra Gittlen
Network World Fusion, 10/8/98

Last year, Oracle Chairman and CEO Larry Ellison looked somber as he took to the Fall Internet World stage a day after Oracle's stock plummeted. But yesterday, a revitalized Oracle Chairman and CEO Larry Ellison unveiled the company's heavy-handed push into the Internet.

Ellison said the company is betting its future on the Internet, abandoning its mantra of network computing in favor of Internet computing, aiming to tap an explosion in business-to-business software services that will soon be unleashed.

In his keynote at Internet World, Ellison reiterated the selling points of Oracle8i, the new version of the company's flagship product due out at the end of the year, and outlined plans for upcoming Internet-based applications and the new Oracle Business Online service that it is launching.

These new products and services are based on the premise that businesses will buy into the concept of using small numbers of industrial-strength databases, to which users connect over the Internet to access applications and data. This is a departure from the client/server model, which requires larger numbers of smaller databases placed at every local-area network, Ellison said.

"What we've done with the client/server model is distribute complexity," Ellison said. "It takes a tremendous amount of work to back up and maintain all that data and applications on users' desktops."

The Internet computing model, a name change away from last year's network computing model, combines the best of the mainframe and client/server worlds, according to Ellison.

"You have professionally backed up data ... and users have a great graphical interface," he said.

Oracle8i was built to run applications over the Internet, and supports both interpreted and compiled Java, Ellison stressed. He portrayed it as a platform that can consolidate not only data but Java objects and Windows files through its Internet File System (IFS). Users can drag and drop application files into IFS and search on the fields just as they would search and query database data, Ellison said.

The Internet model of small numbers of large servers will encourage business-to-business software commerce over the 'Net, as developers and systems integrators offer to maintain applications for small businesses.

Rather than have doctors offices buy software and maintain it, for example, an accounting software developer trying to appeal to the niche medical market can offer to maintain the application and data on a server. The doctor's office, which probably does not have an IT specialist, can access that server over the Internet, Ellison explained.

"There's a lot more money in business-to-business than there is in business-to-consumer," Elision said.

Oracle is putting its money where Ellison's mouth is -- the next release of its Oracle application suite, including sales and marketing applications, will no longer be offered in client/server versions.

The applications will be designed to run on servers to which users will have access over the Internet or intranets, Ellison explained.

"We believe in this so much that we won't sell you client/server version of our applications any more," Ellison said. "We're betting the future of the company on the Internet."

In addition, Oracle is launching Business Online, a service where Oracle will maintain Web-based applications for businesses, using Oracle8, Application Server 4.0, and the upcoming Release 11 of Oracle's application series.

Several attendees here said they thought parts of Ellison's strategy were appealing, but also said some aspects could be problematic.

"For Business Online, we have to see how much Oracle is investing to make it work -- up to now they have been in the business of selling software licenses; this is a different business model for them -- a services business," said Egon Scherer, manager of media services with G. Braun Electronic Media Services GmbH in Karlsruhe, Germany.

But at a press conference after the keynote Ellison said extra investments are not needed.

"We are not going to invest anything at all," Ellison said.

The work required to offer Business Online is the same work Oracle's data centers already do, Ellison said. However, if Business Online is a success Oracle would consider setting it up as a separate business entity, he said.

Paul Ng, manager of Voltdelta, a directory search service for phone companies based in New York, said that the Internet-based application concept would not work for his company. The company charges for every search query, and there is no mechanism to do that on the Web, he said.