Oracle to launch midmarket version of app server

Oracle is prepping a new version of its application server aimed at small and medium-sized businesses (SMBs) that will sport a price tag half that of its standard enterprise edition.

Called Oracle Application Server Standard Edition One, the bundle will include Oracle's application server, Web server and portal software. Oracle plans to charge US$5,000 per processor, with a licensing limitation that allows Standard Edition One to be used on a maximum of two servers. There are no other restrictions on the software's use, according to Thomas Kurian, Oracle's senior vice president in charge of its application server group.

Kurian previewed the bundle at a presentation for analysts in New York on Thursday, where company executives detailed Oracle's application server strategy and market positioning. Oracle intends to launch Standard Edition One at its Oracle OpenWorld conference in London in early September.

The new bundle is part of Oracle's plan to increase the licensing options available to customers interested in buying pieces of its application server suite, Kurian said. It also moves Oracle into what the company sees as an underserved market of smaller companies seeking affordable application server options.

IBM, one of Oracle's top rivals, already offers a discounted, SMB-aimed version of its application server software and other midmarket technology, through its 2-year-old portfolio of Express products. Application server specialist BEA Systems has talked about offering a midmarket-tailored version of its WebLogic platform, but has not announced any formal product plans.

Microsoft competes heavily in the midmarket, but Oracle's Kurian said his company sees an opening in Microsoft's Windows-only stance. Oracle's Standard Edition One will support both Windows and Linux at launch, he said. Oracle also plans to undercut Microsoft on licensing costs.

Forrester Research analyst John Rymer said Oracle could do well with its midmarket bundle if the package -- which he has not yet seen -- is well-integrated and easier to manage than rival products. In recent tests of several vendors' enterprise application server suites, he found Oracle's significantly better integrated than offerings from competitors including IBM, BEA and Sun Microsystems.

"Eclipse is aspirational more than anything else," Rymer said, about the competitive threat posed by IBM in the midmarket. Similarly, inexpensive or free offerings from companies like JBoss Group won't appeal to all companies because of the development expertise required to use them. With so many vendors willing to deeply discount the nominal prices of licensing their software, what really matters for customers is the cost of maintaining and using the software, he noted.

Oracle already uses the Standard Edition One label with an SMB version of its 10g database software. Kurian said Oracle will reach out to channel partners selling the Standard Edition One database and encourage them to also tout the application server bundle.

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