June 14, 2001, 8:17 AM — Oracle Corp. is set to launch a new version of its flagship database Thursday morning, a product that includes high-end features designed to help Oracle shore up its narrow lead against arch rival IBM Corp.
Called Oracle 9i, the database includes a new clustering feature designed to make it easier for customers to add new servers as demand increases. It also includes business intelligence tools for analyzing data, and new manageability features designed to cut costs for users and make its product easier to use, Oracle officials have said.
What Oracle hasn't discussed yet -- and what customers will be waiting eagerly to hear about today -- is how the product will be priced. The vendor has come under fire for a pricing scheme that is both unpredictable and hard to fathom, and users will be hoping for a clearer pricing structure with the new release, said Betsy Burton, a database analyst with Gartner Inc.
Oracle Chairman and Chief Executive Officer Larry Ellison is scheduled to announce the worldwide availability of the database at a press conference Thursday morning at Oracle's Redwood Shores, California headquarters.
Beyond its traditional markets Oracle hopes the new release will help it garner new business among service providers, and in particular among companies that host software applications for businesses, said Bob Shimp, senior director of Oracle 9i marketing, in an interview earlier this week. To that end, 9i has a new feature called Virtual Private Database, a security feature designed to help service providers keep data from multiple businesses separate.
"We see (the service provider market) as an opportunity to meet the needs of small and medium-size businesses that might otherwise consider (Microsoft Corp.'s) SQL Server," Shimp said. In other words, when customers use applications hosted on Oracle servers, that's one less potential sale for Microsoft, he said.
The second new market Oracle hopes to plumb is for customers migrating away from IBM's DB2 database running on mainframe computers, Shimp said. A feature in 9i called Data Guard, which makes it easier to access a backup database in the event a primary server goes off-line, along with the applications clustering feature, should help Oracle in this high-end market, he said.
Gartner's Burton was skeptical of Oracle's ability to steal business from IBM, primarily because Oracle's prices are higher, she said. In fact, she added, Oracle has "left the door open" for IBM and Microsoft to steal some of its business, in large part because of its prices.
"The people I talk to doing a point comparison between DB2 and Oracle say that on the same platform, Oracle is two to two and a half times the price of DB2," she said.
On the whole Burton spoke favorably of Oracle 9i. Oracle hasn't had a good reputation for its manageability, and improvements in this area will go down well, she said. Gartner estimates that only 5 percent to 10 percent of Oracle's customers use clustering, so that feature -- dubbed Real Application Clusters -- will have minimal impact in the short term but eventually could make clustering more popular, she said.
"This is a good, solid enhancement. It will provide a higher degree of scalability and help them position the database at the very high end of the marketplace against DB2," Burton said.
Oracle executives were more exuberant. Shimp said the clustering feature will be a draw for businesses of all sizes. Smaller companies can start with one or two high-volume Intel Corp. servers and add capacity as demand increases, reducing initial outlay costs, he said. Larger customers, meanwhile, will be able to scale Unix-based servers to "unimaginable heights," he said. Shimp called it a "pay as you grow" strategy.
Oracle will announce Thursday that more than 100 software vendors have tuned their products to take advantage of the applications clustering feature, including business software vendors Epiphany Inc., i2 Technologies Inc. and Lawson Software Inc., Shimp said.
The release comes at an important time for Oracle and the database industry as a whole. Revenue from new database licenses reached $8.8 billion in 2000, an increase of 10 percent over 1999 revenue, according to a recent study done by Dataquest Inc. However, that growth was slower than the previous year, when revenue increased 18 percent, Dataquest said, blaming a general economic slowdown.
Oracle held on to its top spot with 33.8 percent of revenue, while IBM was second with 30.1 percent and Microsoft third with 14.9 percent, Dataquest said. However, in the fast growing Windows NT segment, Microsoft took the lead from Oracle by a fraction of a point, increasing its share to 38 percent compared with Oracle's 37.3 percent, the research firm said.
