Oracle has finally shipped the newest version of its Oracle Collaboration Suite, two years after the software's last major update and more than a year after its intended release date.

Oracle launched its suite in 2002, positioning it as a lower-cost alternative in a market overwhelmingly dominated by Microsoft's Exchange and IBM's Notes/Domino. Like its rivals, Oracle's suite offers personal e-mail and calendar applications, as well as collaborative tools such as group file management and Web conferencing. Oracle's new version, Oracle Collaboration Suite 10g, adds long-awaited instant-messaging functionality and an improved collaboration portal, dubbed Workspaces.

Oracle has kept Collaboration Suite's price constant since launching the software three years ago, at $60 per named user for a perpetual license. Components of the suite can also be purchased piecemeal, for $45 per named user. The suite is available worldwide in 25 languages.

Despite a price tag that frequently undercuts its rivals, Oracle has gained little traction in the market, thanks in part to the suite's more limited functionality. IDC estimates the 2004 worldwide market for "integrated collaborative environments" at $1.9 billion, with Microsoft and IBM together drawing 90% of that spending.

IDC's research puts Microsoft in the number-one spot, with 51.2% of the market share, followed by IBM with 40.1%. Among other vendors, only Novell's GroupWise held a noticeable share, with 6% of the market. Oracle registered seventh on IDC's list, with market share of 0.3%.

Gartner's estimates of the enterprise e-mail and calendaring software market show Oracle similarly distant, in fifth place with 0.3% of the market to IBM and Microsoft's collective 93% share.

"The greatest challenge Oracle faces is getting credibility in the messaging world," said David Ferris, president of messaging and collaboration research firm Ferris Research. "They haven't had the level of penetration they hoped for initially. I think they've had vicissitudes with the product."

Oracle executives are tight-lipped about the reasons for Collaboration Suite's protracted development. "There's been a lot of changes to the product, responding to user feedback during our development process," said Rich Buchheim, Oracle's enterprise content management strategy senior director. "I think the net result of the schedule slip is a better product."

The IDG News Service is a Network World affiliate.