Oracle asp services

Oracle rethinks its ASP strategy

REDWOOD SHORES, CALIF. - Last week Oracle began allowing third-party application service providers to host Oracle business applications if they customize them, a move that significantly alters the company's ASP strategy.

Oracle's iHost ASP initiative was originally designed to let ISPs and ASPS purchase and host Oracle database technology. But until last week, if enterprise customers wanted to outsource the management and hosting of Oracle applications their only option was to turn to Oracle's ASP arm, Oracle Business Online. Now firms can turn to a variety of Oracle partners to integrate Oracle applications with their existing systems and processes (see graphic).

Greg Blatnik, an analyst with Zona Research in Redwood City, Calif., says the partnership program represents a major shift in Oracle's stance toward the ASP market.

"There was a categorical statement made last year that this would happen only if Larry Ellison were in his grave, so we have to see if there's an imposter acting as Larry these days," he says. Blatnik was referring to a statement made by Oracle's CEO last October in which Ellison said third-party ASPS would sell hosted Oracle applications over my dead body."

Oracle is changing course, Blatnik believes, because the hosted enterprise application market is too large for the company to handle on its own.

Jeremy Burton, Oracle's senior vice president of products and services marketing, says Ellison's quote still stands when applied toASPs that want to sell Oracle's applications without adding their own value.

"In that respect nothing's changed," Burton says. "The partners we're licensing our applications to go through an approval process, and if we feel they are not going to add any value on top of what we provide, then we won't allow them to host our applications."

For example, Agilera will deliver Oracle E-business Suite through Agilera's XE Enterprise View, a browser that could integrate the suite with customer databases.

Burton says Oracle Business Online will continue to handle sales of noncustomized Oracle applications. He believes noncustomized applications will satisfy 80% of the enterprise market.The remaining 20% that need customization can go to one of Oracle's ASP partners.

Oracle: www.oracle.com