Oracle has clear vision through Internet windows

Visiting Dublin this week to address Oracle's 500-strong Dublin-based workforce, Mr Pier-Carlo Falotti, spoke confidently of the $9.1 billion (€8.6 billion) company's new found focus.

As executive vice-president of Oracle, with responsibility for managing Oracle Europe, Middle East and Africa (EMEA), Mr Falotti told The Irish Times: "In the three years I have been with Oracle, it has never had as clear and focused a strategy since it began focusing on the Internet as a transforming element of society and business."

Oracle has a lot to thank the Internet for. It provided a lifeline to the world's second largest software company just when Microsoft was forging ahead. The US justice department's anti-trust case against Bill Gates's company and the arrival of electronic commerce also undermined the Windows stronghold, and threw the option for alternative operating systems wide open.

A leader in the database software market, Oracle has worked quickly and actively to encourage the development of electronic services for niche business segments.

Recently, Oracle's ebullient chairman and chief executive, Mr Larry Ellison, was at pains to explain that the logical next step for non-IT businesses would be outsourcing IT activities and focusing on core capabilities.

To cater for this new market, Oracle has set up a venture capital fund to bolster investment in start-up companies developing Internet software in niche areas.

It has also been quick to embrace the free, and increasingly popular Linux operating system, which many IT departments are choosing over Windows NT.

This implies a move away by Oracle from a product oriented focus to a wider services offering for its customers. However, Mr Falotti points to growing misconceptions about software services:

" `Services' today is a kind of sexy word. In reality when people buy a product over the Internet, its characteristics are viewed as a service, when really it's simply a different form of rental. Oracle will always be a product company, but how you make the product available to the customer will vary."

Because of rapid advances in access to the Internet and broadband technology it has become possible to deliver complex applications electronically. Now Oracle is looking at lucrative new revenue streams generated through application service provision (ASP).

Though still very much in its pilot phase - only 30 US companies are currently testing the system - ASP allows client companies to use software products remotely while a technology provider looks after the maintenance.

"Buying a software product is the smallest part of the ownership exercise. This way the customer can select the product and have Oracle run the application for them," Mr Falotti says.

Oracle plans to offer this service for all brands of software, although it claims Microsoft's products are not likely to be popular. Mr Falotti says: "I buy a new Windows application and try to exchange files with older versions of the same application and it can't be done - now that just doesn't make any sense."

Oracle is currently working with Netscape, Sun, IBM and others to develop a universal standardised approach to software development. The development of standards to facilitate seamless interoperation is critical if the ASP model is to take off.

At the moment Oracle is providing ASP services for around 30 customers in the US. It has yet to begin offering the same service in Europe, but it has chosen a site in Reading from which it will base its international ASP service.

Dublin is currently the home of Oracle's own applications services centre, where all Oracle's European computer systems are centrally managed, including database, finance, human resource and order processing packages. Mr Ellison has come under considerable criticism because his prediction of several years ago that networked, or dumb terminal computing would be the way forward, has failed to bear fruit.

However, Mr Falotti remains faithful to the vision. "Network computing has become a reality under a different name - mobility. At Telecoms '99 everyone was presenting devices that could operate like personal computers. Soon all telephone users will be able to use the Internet without having to learn the complexity of a computer."

He likens Mr Ellison's prediction to Leonardo De Vinci's early outlines of the aircraft prototype. "The idea wasn't 100 per cent there on the first day, but it managed to trigger all sorts of imagination."

Oracle and its many partners will have clear light before them if the goal of global software standardisation is achieved. Such a move may be the only way Microsoft's position of international dominance can be broken.