Oracle on Monday said it expects to save $US2 billion in expenses by moving its operations to the Internet, doubling a pledge it made to Wall Street a little more than a year ago, and once again using itself as an example of how businesses can save money using the Net.
The news was delivered by Gary Bloom, Oracle executive vice president, in a keynote presentation at the start of Oracle's OpenWorld conference here in San Francisco this week. Oracle will use the show to launch a host of new products, including Oracle 9i, a new version of its flagship database product, and a wireless edition of Oracle's application server.
Oracle already has saved "well in excess of a billion dollars" since it announced its money-saving scheme a little more than a year ago, Bloom said. Those savings were realized by standardizing business practices around the world in areas like human resources, purchasing and general accounting, which in turn helped Oracle to consolidate its IT infrastructure, Bloom said.
For example, the company took 44 data centers located around the world and consolidated them into one giant data center. It also took 97 e-mail servers and distilled them into two mail servers, he said. Further savings were realized in areas like expense reports, where Oracle saved $US6.4 million in the U.S. alone by allowing employees to submit expense reports over the Web.
"When we're talking about cutting a billion dollars in expenses, what we're talking about is converting your business from a traditional business to an e-business," Bloom said. "This is a model for e-business transformation that we think applies to everybody," he added later.
Analysts have pointed to Bloom as the likely heir to Ray Lane, Oracle's long-time president and chief operating officer and number-two executive, who resigned earlier this year to join investment firm Kleiner Perkins Caufield & Byers.
Bloom sought to play down suggestions by analysts and pundits that its billion-dollar saving plan is no more than a marketing trick designed to promote Oracle's e-business software. "This is real, it's happening," he said.
Last month, Oracle announced that net income for the first fiscal quarter had increased by 111 per cent to $US501 million, or 17 cents a share, helped largely by reduced operating costs brought about by its money-saving scheme. The company's operating margin that quarter increased to 29.1 per cent, up from 17.4 per cent a year ago.
"Oracle is eating its own dog food, and we're loving it," Oracle Chairman and Chief Executive Officer Larry Ellison remarked earlier this year.
Oracle will use the OpenWorld show to roll out a panoply of products and services. Following are some of the announcements made Monday, most of which focus on delivering applications wirelessly to customers and employees:
-- Oracle announced the pending availability of Oracle9i Application Server Wireless Edition, a middleware product for developing and deploying wireless Internet content and application services. The product uses Oracle's Portal-to-Go technology and is targeted at carriers, consumer portals, ASPs (application service providers) and corporations.
The new version will include pre-built adapters for wireless e-mail and directory integration, as well as improved support for location-based services, which can be used for wireless commerce applications and to build logistical applications that deliver personalized services based on the user's current location.
Because of its open architecture, the product will also allow companies using IBM mainframes to wirelessly access data stored in their legacy systems, according to Oracle.
Oracle9i Application Server Wireless Edition is scheduled to be available in December 2000. Pricing wasn't announced.
-- Oracle announced the immediate availability of Oracle FastForward Enterprise Wireless Portal, software that allows a company to develop an information portal that employees, customers and suppliers can use to access corporate applications and Web sites from a range of wireless devices. Comprised of software and services, Oracle FastForward Enterprise Wireless Portal is available immediately in the U.S. at a base price of $US50,000, Oracle said.
-- OracleMobile, an Oracle subsidiary focused on wireless applications, introduced the beta of OracleMobile Online Studio, an environment for building, testing and deploying hosted wireless applications. developers can sign up for the beta program today at http://studio.oraclemobile.com/. General availability of the product is expected next month, Oracle said. Pricing wasn't provided.
More information about Oracle OpenWorld is on the Web at http://www.oracle.com/openworld/.