Looking to take on IBM, Microsoft and others, Oracle plans next month to detail further expansion efforts in the infrastructure software market -- efforts that include a new content management server and a repackaged application server line.
Even as Oracle battles for control of applications provider PeopleSoft, it has been investing in internally developed products, specifically in middleware -- the back-end server software used to build and run business applications. The company's strategy is to build a comprehensive line of infrastructure software in an effort to better compete with specialist providers and industry heavyweights.
Next month, at its Oracle OpenWorld customer conference, Oracle will announce a content management server, company executives told ZDNet UK sister site CNET News.com. The initiative, code-named Tsunami, is meant to build on Oracle's existing database business by providing a specialised server for handling the reams of business information that are stored in document form, such as email, spreadsheets and text documents.
Also at the conference, Oracle will discuss a revamped application server software suite, which will include a refreshed integration server, according to the company. Oracle will start selling various editions of its Java-based infrastructure software in an attempt to give customers more flexibility to combine individual software components, executives said.
Oracle's middleware business accounts for a small fraction -- less than 5 percent -- of the company's overall revenue. But regardless of whether it succeeds in acquiring PeopleSoft, building out a complete "stack" of infrastructure is vital to Oracle's long-term prospects, analysts said. Increasingly, corporate customers are looking to purchase larger "stacks" of middleware products from fewer suppliers.
"Plugging in technology that mortars the cracks in their stack -- that's a good use of time and money and at a lot lower risk," said Charles Di Bona, an analyst at Sanford Bernstein.
Di Bona said Oracle's pursuit of PeopleSoft has been a "distraction" from a strategy of expanding its middleware line.
Oracle sees server software, notably its application server and collaboration suite, as a natural extension of its database business, where it already has a large customer base.
Oracle "owns the machines that run the database -- you dominate there", said Amlan Debnath, Oracle's vice-president of server technology. "It's also important to own the footprint on machines that run applications...the so-called middleware layer."
Oracle was relatively late to the game in the application server field, but it's ramping up in that area. Earlier this year, the company said it would double its sales force of people selling its application server to about 420 people.
Di Bona said Oracle still has a way to go before it catches up with market leaders. "Its [application server] is used, but I don't think it's a marquee name in that space yet," he said. "They need to address that internally or through acquisition."
Di Bona recommended smaller purchases, rather than large multibillion-dollar deals, which he said have a poor track record for success, especially in software. During a court challenge to the Department of Justice's antitrust ruling against the PeopleSoft takeover attempt, Oracle disclosed that it was considering buying BEA Systems, a billion-dollar Java middleware provider.
Later this year, Oracle is expected to announce more targeted bundles of its application server line. One person familiar with the company's plans said Oracle will introduce five new standalone editions called Business Intelligence, Integration, Identity Management, Portal and Forms. These new packages will complement existing products, including Standard One edition, which is aimed at smaller organisations, and a Java edition geared for programmers.
