Oracle is taking its ASP (application service provider) model across the Atlantic, marketing to European customers a suite of electronic commerce software that is remotely hosted and accessed via the Internet.
The service, called E-Business Suite Online Any Place, will be hosted by British Telecommunications PLC's (BT) data network subsidiary BT Ignite, Oracle said in a statement Tuesday.
Building on its experience in North America, where more than 125 customers -- including such companies as Bank of Montreal, CIGNA Corp., and PepsiCo Inc.'s Tropicana division -- use its hosted services, Oracle hopes to spread the model worldwide, eventually delivering the majority of its products online, the company said.
Potential customers come in all sizes and business sectors, said Barry Goodwin, Oracle's vice president of online services for Europe, the Middle East, and Africa.
"What we are targeting is early adopters, and we're finding it's mainly larger corporations that are a bit more advanced in their thinking about the service," he said.
Goodwin compared the ASP business model to the old system of timesharing on mainframe computers.
"That was driven by the cost of hardware, because not everyone could support an IBM 3090 . . . What's driving this is the cost of support; people will not be able to afford in the future to have huge IT departments that cost a lot of money."
Under the terms of the new cooperation, customers will pay a monthly fee for business software, which will be managed and supported by Oracle, while BT Ignite Content Hosting provides hardware and network management.
Customers will pay the same license fee they would for an offline copy of the software, plus an additional 5 percent per month for hosting by BT Ignite and management by Oracle, said Goodwin, adding that quantity discounts are available. For customers who prefer to have the software hosted on their own servers, the monthly charge is 3 percent of the license fee.
He sounded a confident note about the future, despite the relative lack of success for companies which have offered multiple software packages through a single ASP.
"Other people have tried comprehensive ASP programs, and have failed, because they've tried to provide everything," he said. "The model that we've developed, we think is focused on our core competencies, and BT's, and lets the customers focus on their own core competencies."