December 29, 2000, 2:37 PM — ORACLE ON WEDNESDAY extended its million-dollar challenge -- through which it will give $1 million to anyone who can disprove that its 9i Application Server and 8i database will run a Web site three times faster than with IBM or Microsoft software -- to companies that use BEA's application server.
Analysts have said that Redwood Shores, Calif.-based Oracle's CEO Larry Ellison, who is notorious for issuing such challenges, targets his company's key competitors as a way to light a fire under Oracle employees and focus on the competition.
By most accounts, the database market has been carved into a two-horse show, with IBM and Oracle about neck and neck in the race for market share. More recently, Microsoft has been pushing its way higher into the enterprise with each release of SQL Server. So the challenge, until now, has been focused on the database.
"We have not in the past considered BEA a competitor," said Scott Clauson, Oracle's director of product marketing. "They've been successful over the last year and a half at being a Java application server."
But Oracle considers BEA a competitor now.
The reason for this is that BEA is the application server market share leader, according to a number of analyst firms. The application server market is becoming increasingly important, and will be worth $11.3 billion by 2004, up from just $994 million in 1999, according to Framingham, Mass.-based analyst firm IDC.
Oracle, like its competitors, is increasingly looking to its application server as a key revenue generator, as was evident at Oracle OpenWorld in October when Ellison announced that the company is folding all of its products, save the database, into the application server.
Since Ellison issued the original challenge at OpenWorld, Clauson said, at least 2300 companies have registered, though none have disproved Oracle's claim yet.
"We're still in the recruiting phase," he said. "I expect that we'll be talking about customers in late February or March."
IBM, however, is not among the companies vying to challenge Oracle.
"We are not into gaming here, we are into supporting real business problems," said Janet Perna, general manager at IBM's Data Management Solutions Group, in Somers, N.Y. "No customer is into playing these games because they have too much work to do."