Ellison aims for Microsoft's e-mail crown

At a press conference Monday, Ellison derided Microsoft's Exchange e-mail servers as unreliable and insecure. He said Oracle is offering an e-mail server option for its 9i database management software along with a migration program to move companies from Exchange to Oracle's database.

Separately, Ellison warned that a continued slump in enterprise software sales will likely result in Oracle missing analyst estimates for a second-quarter profit of 11 cents per share. Ellison said he now expects profits of 9 cents to 10 cents per share.

"We're saying earnings could be down 10 percent, maybe 15 percent. The fact is, I don't know," Ellison said. "We will still be enormously profitable. Last quarter we went through it with record profitability in difficult times. In light of Sept. 11, it's difficult to do that again this quarter. Next year, it will start picking up again."

With the new e-mail software, Oracle executives say they are not interested in competing with Microsoft's Outlook e-mail client software. Instead, the company is targeting Microsoft's Exchange server software that manages e-mail messages.

"We don't want people to migrate from Microsoft e-mail. We want people to throw out Microsoft Exchange for a server that works," Ellison said.

Oracle said the new software will allow corporations to use Oracle's 9i application server and database together as an e-mail server. Application-server software is technology that runs e-business and Web site transactions and sits in front of databases.

With the move, Oracle will compete not only against Microsoft, but also against Sun Microsystems and IBM, which sell their own e-mail server software.

Jeremy Burton, Oracle's senior vice president of marketing, claimed Oracle's e-mail software is more secure and more reliable than Microsoft Exchange, because it rides atop Oracle's database software, which contains technology to make it more fault-tolerant. Oracle executives said a single Oracle e-mail server can support 10,000 users, allowing companies to replace multiple Exchange servers with a single Oracle server. The company can use one Oracle database server--equipped with the application-server software--to store all of its e-mail.

Oracle executives said the company's clustering technology, called Real Application Clusters, lets businesses harness multiple high-end computers to run large databases and to ensure reliability in the event of a failure. Oracle executives have touted the clustering technology as a way to reduce costs because companies can buy smaller and cheaper computers and cluster them together to run their databases, rather than having to buy one huge, expensive computer.

Oracle also alluded to recent e-mail viruses that have affected Microsoft Exchange. Burton said because Oracle can house a large volume of e-mail in one database--as opposed to multiple copies of Exchange--it is easier to contain viruses.

A more pressing issue for Oracle is convincing customers to buy its software. Ellison said a lot of large customers are delaying software purchases, but he expects many will have to start buying soon.

"Our large customers can delay buying our software a quarter. They can delay two quarters, but eventually they have to buy," he said. "They're waiting for the last possible moment to buy. (But) they have projects going live and have to buy."

Commenting on recent events, Ellison called the proposed settlement in the Microsoft antitrust trial "a complete victory for Microsoft and a complete defeat for the government."

He said the Justice Department's deal was akin to having a videotape of a bank robbery but letting the culprits go.

Ellison also clarified his role in the debate over a national standard for identification cards.

"I'm not for mandatory national ID cards; (I want to) make existing IDs more difficult to forge. All IDs should adhere to the same standards," he said.

In the brewing war for authentication services over the Web, which gives one-click access to credit card information and passwords, Ellison believes no one company will win out. Microsoft's Passport, Sun's Liberty Alliance project and AOL Time Warner's efforts will all find a home, he said.

"It's not one winner takes all," Ellison said. "Why would that be the case? There's no winner-take-all scenario with e-mail."

Oracle representatives said attendees of Ellison's keynote speech were given free coffee mugs emblazoned with Oracle's new marketing campaign, "Unbreakable." To poke fun at Microsoft, the company is also giving away cheaper, clear plastic cups that read, "Microsoft: Software for the fragile business. Caution: Does not work with Java."

The giveaway is in reply to Microsoft, which at last year's Comdex keynote speech by Ellison distributed free mugs touting Microsoft's databases as having record-breaking speed and performance. Ellison scoffed at the mug during the keynote address and showed a demonstration of Oracle's products running faster than Microsoft's technology.