Even as Oracle battles for control of applications provider, 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 CNET News.com. The initiative, code-named , is meant to build on Oracle's existing database business by providing a specialized server for handling the reams of business information that are stored in document form, such as e-mail, spreadsheets and text documents.
Oracle plans next month to detail a push into content management, along with a revamped application server suite.
The company's strategy is to parlay its strength in databases into the back-end middleware market. But in the content management and application server fields, it's a relative newcomer, and it faces competition from biggies such as Microsoft, as well as niche players.
Also at the conference, Oracle will discuss a revampedsoftware 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.
The middleware field encompasses all types of infrastructure software and tools for building business applications, such as portals and databases. These high-end products are typically purchased by central IT organizations and used by the programmers and administrators who build and maintain business systems.
The multibillion-dollar field is dominated by industry heavyweights such as IBM, Oracle, Microsoft and BEA Systems. Each provides a full suite of server software, rather than a single application server product, in an effort to provide corporate customers with a "one-stop shop.""stacks" are also developing quickly.
Oracle sees server software, notably its application server and collaboration suite, as a natural extension of itsbusiness, 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, 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 , 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 stand-alone 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 organizations, and a Java edition