Oracle is set to launch a new version of its flagship database Thursday morning, a product that includes high-end features designed to help Oracle shore up its narrow lead against arch rival IBM.
Called Oracle 9i, the database includes a new clustering feature designed to make it easier for customers to add new servers as demand increases. It also includes business intelligence tools for analysing data, and new manageability features designed to cut costs for users and make its product easier to use, Oracle officials have said.
What Oracle hasn't discussed yet -- and what customers will be waiting eagerly to hear about today -- is how the product will be priced. The vendor has come under fire for a pricing scheme that is both unpredictable and hard to fathom, and users will be hoping for a clearer pricing structure with the new release, said Betsy Burton, a database analyst with Gartner.
Oracle Chairman and Chief Executive Officer Larry Ellison is scheduled to announce the worldwide availability of the database at a press conference Thursday morning at Oracle's Redwood Shores, California headquarters.
Beyond its traditional markets Oracle hopes the new release will help it garner new business among service providers, and in particular among companies that host software applications for businesses, said Bob Shimp, senior director of Oracle 9i marketing, in an interview earlier this week. To that end, 9i has a new feature called Virtual Private Database, a security feature designed to help service providers keep data from multiple businesses separate.
"We see (the service provider market) as an opportunity to meet the needs of small and medium-size businesses that might otherwise consider (Microsoft's) SQL Server," Shimp said. In other words, when customers use applications hosted on Oracle servers, that's one less potential sale for Microsoft, he said.
The second new market Oracle hopes to plumb is for customers migrating away from IBM's DB2 database running on mainframe computers, Shimp said. A feature in 9i called Data Guard, which makes it easier to access a backup database in the event a primary server goes off-line, along with the applications clustering feature, should help Oracle in this high-end market, he said.
Gartner's Burton was skeptical of Oracle's ability to steal business from IBM, primarily because Oracle's prices are higher, she said. In fact, she added, Oracle has "left the door open" for IBM and Microsoft to steal some of its business, in large part because of its prices.
"The people I talk to doing a point comparison between DB2 and Oracle say that on the same platform, Oracle is two to two and a half times the price of DB2," she said.
On the whole Burton spoke favorably of Oracle 9i. Oracle hasn't had a good reputation for its manageability, and improvements in this area will go down well, she said. Gartner estimates that only 5 percent to 10 percent of Oracle's customers use clustering, so that feature -- dubbed Real Application Clusters -- will have minimal impact in the short term but eventually could make clustering more popular, she said.
"This is a good, solid enhancement. It will provide a higher degree of scalability and help them position the database at the very high end of the marketplace against DB2," Burton said.
Oracle executives were more exuberant. Shimp said the clustering feature will be a draw for businesses of all sizes. Smaller companies can start with one or two high-volume Intel servers and add capacity as demand increases, reducing initial outlay costs, he said. Larger customers, meanwhile, will be able to scale Unix-based servers to "unimaginable heights," he said. Shimp called it a "pay as you grow" strategy.
Oracle will announce Thursday that more than 100 software vendors have tuned their products to take advantage of the applications clustering feature, including business software vendors Epiphany, i2 Technologies and Lawson Software, Shimp said.
The release comes at an important time for Oracle and the database industry as a whole. Revenue from new database licenses reached $8.8 billion in 2000, an increase of 10 percent over 1999 revenue, according to a recent study done by Dataquest. However, that growth was slower than the previous year, when revenue increased 18 percent, Dataquest said, blaming a general economic slowdown.
Oracle held on to its top spot with 33.8 percent of revenue, while IBM was second with 30.1 percent and Microsoft third with 14.9 percent, Dataquest said. However, in the fast growing Windows NT segment, Microsoft took the lead from Oracle by a fraction of a point, increasing its share to 38 percent compared with Oracle's 37.3 percent, the research firm said.
Windows NT may not be as reliable or as scalable as Oracle 9i or DB2, but it's growing in popularity because the price is relatively low, it's easy to use and it makes a good "add-on" database for an existing environment, Gartner's Burton said.
"NT tends to be bought for specific application environments, such as a decision support system for the sales department," Burton said. "It's also good for an Internet application when you don't want people having direct access to your core database so you buy a second server."
IBM, meanwhile, announced the latest revision to its database product last week, dubbed DB2 UDB 7.2. Big Blue touted many similar features that Oracle has emphasized, including improved management features, business intelligence, and tight integration with its WebSphere application server. IBM recently acquired the database business of Informix for $1 billion.
The release of Oracle 9i will be a worldwide launch, and the database will be available in all localized versions that Oracle typically supports, Shimp said. A study of 20,000 customers conducted by Oracle showed that 70 percent plan to upgrade to the new database within the first six months, he said. Gartner Group's Burton said it will more likely take a year to gauge the software's full impact.
"We believe it will be a year for this to really be broadly supported," she said. "Like any other release it will take a while for users to get this installed and get tested for their environments. It will take a year for us and for Oracle to really understand the significance."