Oracle embraces ASPs

Oracle's applications are now available through application service providers and Larry Ellison is still breathing.

Oracle's chairman and CEO had said that ASPs would be able to offer his firm's business software suite only "over my dead body" because he wanted to force Web-based users through Oracle's own Business OnLine hosting service. That promise nothwithstanding, the company today said it has approved Agilera Inc., BlueMeteor Inc., Center 7 Inc., GlobalCenter Inc., Hostcentric Inc., Interliant Inc., Nupremis Inc., Sallie Mae Solutions and Winstar Communications Inc. to host its applications.

The company currently permits application service providers to license and sell subscriptions of its Oracle 8i database.

However, according to Oracle executive Jeremy Burton, ASPs won't be permitted to offer users the products, which still will be sold as licensed software through the company's direct sales force. These nine and potentially more ASPs will host the software for users.

Phil Wainewright, a London-based analyst for Internet.com in Darien, Conn., said, "This is a gradual change from a market perspective, but a big change to Oracle's business model." He said Ellison obviously had a change of heart.

Moreover, the change won't stop there, he said. "Ultimately, Oracle will be forced to adopt a licensing model based on use of an application," not the server it runs on.

Burton didn't disagree. "We may get to a point in time where ASPs own the software license and meter it out," he said.

Under the new strategy, Oracle said, ASPs who sign up to host the company's applications will follow Oracle-developed implementation guidelines in setting up the software for users. The ASPs can also develop and sell their own product offerings to complement or extend the capabilities of Oracle's software, the company added.

Until now, Oracle had been trying to route all users of its enterprise resource planning and customer relationship management applications who were interested in having the software hosted to the Business OnLine unit. The company today said that more than 100 users have signed up with Business OnLine.

But sources last month said Oracle had changed strategies and was preparing to let independent ASPs host the software for corporate users. Oracle officials declined to comment at the time but confirmed earlier this month that an announcement was imminent.

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