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Oracle buys Concentra

Chairman Larry Ellison reveals pricing for Oracle's new rent-an-app service before announcing a $43 million cash purchase.

SAN FRANCISCO--Oracle chairman Larry Ellison today roused the faithful with an hour-long keynote at Oracle Open World, sprinkling in a bit of news about pricing for Oracle's new rent-an-application service before announcing a $43 million cash purchase of software maker Concentra.

Oracle will pay $7 per share in cash for Concentra in an effort to augment its Internet commerce offerings. The Burlington, Massachusetts-based company's configuration software--which both sales reps and buyers can use to configure complex products such as PCs, consumer electronics devices, or airliners--sells for $100,000-plus, said Ron Wohl, Oracle senior vice president of applications.

Concentra took in about $10 million in revenue in the last 12 months and has about 120 employees. The transaction should close by year's end, Wohl said.

Concentra software will be marketed as both a stand-alone product and as part of Oracle's front office suite. According to Wohl, Concentra's product works with many Oracle applications now and will be fully integrated within nine months.

In his lengthy address, Ellison said Oracle's outsourcing service, due to launch in January, will rent Oracle applications for $395 to $895 per user per month. For Internet email, the price will be $10 per user per month. Beginning in June 1999, Oracle also will host rentable applications from other developers that work with Oracle products.

In a press conference after his speech, Ellison said the rent-an-app division will be set up as a separate company and aims to have its own IPO.

During the bulk of his address, Ellison stressed Internet computing--his newest theme after a long infatuation with network computers--and the new Oracle8i database. Underlying the presentation was his usual disdain for rival Bill Gates, chairman of Microsoft.

A week before Microsoft's own release of version 7.0 of its SQL Server database, Ellison preached the religion of big, centralized databases, not small ones scattered around different sites.

"We will never live in a world of little servers everywhere--that's a horrible, horrible mistake," Ellison said. "We will consolidate our little servers into a smaller number of servers and databases and get tremendous benefits. We are centralizing complexity and doing a better job of simplifying complexity."

A shortage of high-tech talent--database administrators and programmers in particular--is moving corporations from client-server to Internet computing, Ellison argued, turning corporate networks into corporate Internets. That will move database applications from desktop PCs to centralized servers, which users tap via a standard Web browser.

Centralization will cut labor costs for running corporate networks by as much as 80 percent, he contended, and deliver more timely, complete data. "Consolidation is not simply a way to lower costs but also to improve the quality of the data," Ellison said.

He described Oracle8i as more than database software, calling it a platform for Internet computing. The product includes a Java server.

"It's a complete, extensible platform for building and running applications where all you need is Oracle8i and a browser," Ellison said.

During the subsequent press conference, he denied that Oracle is seeking to replace vendors such as Sun Microsystems, praising its Solaris operating system, but said Oracle8i with Oracle development tools will be easier for software developers to use than writing to Solaris.

Ellison's speech also highlighted Oracle's iFS or Internet File System, which is due to be announced today along with another new product, Oracle8i interMedia. Tomorrow Oracle will announce broad support for Extensible Markup Language (XML), which is emerging as an Internet standard.

Oracle8i includes the ability to store word-processing documents or spreadsheets that can then be searched, Ellison said. At the press conference, Ellison said he views that Oracle8i capability as a competitor to the Windows NT's file-serving capabilities, saying that Windows NT feature is more a competitor to Oracle8i than Microsoft's SQL Server 7.0 database.