Oracle Taps More Partners to Push ASP Business

Corporate users will get more options for deploying online applications from Oracle Corp. during the next few months, as the software giant embraces a growing number of third parties in the application service provider market.

Oracle is working more closely with integrators, software vendors and service providers to equip them to quickly deploy Oracle's Web-accessible business applications as an online service for corporate users. The new third-party programs, which will be unveiled in the next few weeks, will add software that complements Oracle's online sales, procurement and other business applications as well as speeds up deployment of online applications and makes them run more smoothly and predictably. Eventually, corporate users will be able to pay for applications as a kind of metered service.

Oracle has already introduced an example of this metered service idea with Oracle SalesOnline.com. It's a pay-as-you-go Web service, based on Oracle's salesforce automation software, which lets a company's salespeople access programs and data through a Web browser. At last week's yearly user conference, Oracle Chairman Larry Ellison boasted of its success. "We launched it two months ago and we have over 5,000 companies using it," he told attendees in his keynote address. "In two months, we got more customers than all of the salesforce software vendors combined."

The third-party programs being put into place now are an effort to accelerate the pace of this success.

"It's what I call the 'arms market,' " says Oracle's Business Online (BOL) President Timothy Chou, who spoke to attendees at the conference. "We sell the software applications and the right to host them to third parties, which then develop and deploy a hosting service."

At the same time, BOL continues to act as an ASP - customers buy the Oracle applications suite and then can choose to pay BOL to host it for them as an online service.

In a few weeks, Oracle will announce an "authorized network providers" program through which the company will work with service firms to ensure predictable performance for customers using Oracle applications delivered online.

A second new program is an outgrowth of the work done by Oracle Consulting, which handles application planning and setup for BOL customers. Oracle is devising what it calls an "online life cycle" - a set of practices and guidelines for designing, implementing and operating an online application service based on the Oracle products.

Chou says there will be an initial group of about 10 consulting companies or system integrators that will become "authorized implementers" and use this framework to get online customers up and running.

Finally, Oracle is creating a plan to bring more software vendors into the online fold. These companies are being courted to add features to Oracle's own applications. According to Chou, Oracle is creating the means to let these vendors quickly share data between their own software and Oracle's.

"You might have a vendor with a resume-tracking program," he says. "A customer should be able to take data from this system and integrate it with new-hire data in the Oracle human resources application."

Oracle might be hitting the market precisely, based on a recent report from International Data Corp., a market research company in Framingham, Mass. Analysts surveyed 29 ASP vendors and partners, who identified better performance, better reporting, improved security and competitive cost structures as their main concerns. According to IDC, the respondents were looking for software and services that could create a network and applications infrastructure to address these issues.

Oracle's tighter embrace of third parties is a major shift from the launch of BOL just one year ago, when Ellison vowed that Oracle applications would be sold to ASPs "over my dead body." Oracle then planned to charge monthly fees to let customers access Oracle applications that ran in third-party data centers, such as those of Exodus Communications Inc.

But last year, Oracle launched a program called iHost to enlist more network service providers and in August expanded it to include software companies that could integrate their products with Oracle's applications and its underlying database and application server software .

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