When Oracle executives in January publicly described the vendor's Fusion project to create a new suite of enterprise applications as halfway done, they were referring to the completion of the smaller middleware piece of the massive multibillion dollar project, according to the man in charge of that undertaking. Much work remains to be done on the larger applications piece of Fusion.

"We're less than halfway through," John Wookey, senior vice president of application development at Oracle, said this week. However, he was quick to point out that the work Oracle has already done to create new Fusion middleware will be a vital foundation for work on the applications side of the project.

For Oracle, Fusion is all about wrestling the number-one applications provider spot away from bitter rival SAP, Wookey said. The first full version of the new Fusion applications suite due out in 2008 will be based on J2EE (Java 2, Enterprise Edition) and reflect the SOA (service-oriented architecture) approach to developing and managing IT systems through reusable technologies.

At the same time as thousands of Oracle employees are involved in the development of Fusion, the company is running a parallel effort to invest in its existing applications, Wookey said. These include its homegrown Oracle E-Business Suite and the ERP (enterprise resource planning) and CRM (customer relationship management) applications it picked up through the multibillion-dollar acquisitions of PeopleSoft and Siebel.

While Oracle expects the "great majority of customers" will move to Fusion, the vendor doesn't want users to feel forced to migrate from their present applications. Customers, who typically look to upgrade their applications every four to six years, need to be able to move to Fusion once the new applications suite provides real benefits for their businesses, he said.

Does Wookey anticipate that some Oracle customers may never move to Fusion? "Absolutely," he said. "The poster child for this would be JD Edwards World customers on [IBM's] iSeries." Oracle gained the JD Edwards users through its PeopleSoft purchase. Many of these customers are very small businesses with very limited IT budgets. "There's a possibility we would continue to support these products forever," Wookey added.

As Oracle gets deeper into Fusion development, the company is benefiting from having retained more than 90 percent of the development and support teams of PeopleSoft and Siebel. "There's been a misunderstanding that Fusion will be built on E-Business Suite," Wookey said. "We used it as a starting point." What Oracle is working on is generating a new applications suite based on the intellectual property contained in all its applications, he added.

"We're leveraging the best ideas in E-Business Suite, PeopleSoft and Siebel CRM," Wookey said. "We're integrating a bit of yours, mine and ours." For instance, on the CRM side, Oracle is using Siebel as a starting point, while using PeopleSoft technology as its initial discussion focus for work on new user interfaces. The development teams involved in Fusion are a balanced mix of talents from different applications, including staff from smaller purchases such as transportation management software vendor Global Logistics Technologies, he said.

Oracle is currently busy determining the best approach to deliver the functionality it believes users will want to see in Fusion. Next year, the vendor will focus on carrying out the engineering work to put those capabilities in place, Wookey said.

While SAP will continue to be Oracle's primary competition for the next few years, Wookey sees Microsoft more of a potential threat over the long term.

The only three companies he believes have a viable middleware platform going forward are Oracle, Microsoft and IBM. So, given the important of middleware to enterprise applications, does he think that IBM might re-enter the applications market it quit in 1999? "I don't know," Wookey said. "We ask them that question all the time and they say, 'No'."