Oracle has its eye on BEA customers

By Martin LaMonica, CNET News, 1 April, 2003 11:33

NEWS

Oracle came out swinging on Monday with a version of its Java server software and a programme aimed at taking customers away from current market leader BEA Systems. The company introduced a version of its Oracle9i Java server software for building custom business applications. Called Oracle9i Application Server Java Edition, the software is priced at $5,000 per server processor for an unlimited licence. BEA has a $4,000 version of its comparable application server called WebLogic Workgroup, but it is limited to 20 users. "The market is consolidating and we want to accelerate that trend," said Thomas Kurian, senior vice president of Oracle9i Application Server development. BEA could not immediately reached for comment. Oracle is targeting BEA, in particular, because a large number of BEA's 14,000 customers use an Oracle database with BEA's application server to run business applications, executives said. Oracle has a large base of database customers and holds the top spot for relational databases. "The reason why our application server business has been growing so significantly is simply because customers that use our application server get significant benefits with how integrated it is with our database," said Mark Jarvis, Oracle's chief marketing officer. By having a single provider for both a database and an application server, companies can lower their overall support costs, Oracle executives said. With its pricing, Oracle intends to make the Java edition of Oracle9i Application Server more attractive to its database customers as well as to medium-size businesses and Java developers. IBM and BEA have both introduced stripped-down "express" versions of their respective Java application servers aimed at small and medium-size businesses and departments in large corporations. BEA on Monday lowered the price of the entry-level version of its WebLogic server, which is appropriate for relatively simple tasks like serving up Web pages. By contrast, Oracle executives noted that the new version of Oracle9iAS is not a low-end offering intended for less demanding computing jobs. Oracle 9iAS Java edition includes Enterprise Java Beans (EJB) programming model, which gives the ability to build applications; clustering capabilities; a data-mapping tool called TopLink; and five licences of Oracle's Java development tool, JDeveloper. "What Oracle has been trying to do in the market for the past few years is...to buy share," said John Rymer, an analyst with Forrester Research, who said Oracle's pricing is aggressive. "Essentially, this is a defensive announcement to lock in their current base." In another move intended to root out BEA from the Oracle customer base, Oracle unveiled a "switch and save" programme. Customers that convert from WebLogic to Oracle 9iAS will get the first WebLogic processor licence converted to an Oracle licence for free, Oracle executives explained. Oracle is also giving away Oracle 9iAS to companies that embed Oracle's software in their commercial applications. Oracle is looking to entice software companies to use its software over open-source alternatives, such as JBoss, said Kurian. Oracle has 15,000 application server customers, the company said. Market researchers, including Rymer, estimate that IBM and BEA have about the same amount of market share for application server revenue and that Oracle is growing its share. The price of Oracle9i Application Server standard and enterprise edition, which include more features for large-scale deployments, are priced at $10,000 and $20,000 per processor, respectively.

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