Oracle's mixed messages

In the rush to plant its flag in the booming market for application server software, database giant Oracle admits that it has confused customers with a pair of dueling products.

Oracle executives told CNET News.com that the company has muddled the marketing strategy for its Oracle Application Server, a two-year-old product now in its fourth iteration, while focusing its efforts on hawking its new 8i database scheduled to ship this month.

For months, analysts and some customers have pondered whether Oracle is abandoning its standalone application server because the Internet-centric Oracle 8i database has built-in application server features. Both products can be used to link Web applications to back-end databases and other systems. Oracle has been positioning its Application Server as its strategic product in this area. But, with the launch of Oracle 8i, Application Server is rarely mentioned by Oracle executives.

During the last few months, Oracle chief executive Larry Ellison has peddled 8i as the only technology businesses need to deploy applications that are accessible through the Internet. Ellison has rarely mentioned Application Server during public appearances while consistently hawking 8i.

Some industry observers are even convinced Oracle will eventually combine its Application Server and database into one product. Sources say Oracle has also paired the budget for Application Server marketing.

Oracle executives dispute those claims, saying they have no plans to kill the Application Server and blaming themselves for the confusion.

One worried Oracle customer said he is lobbying Oracle to keep the Application Server as a standalone product--and is even considering a switch to a competing server.

"What we prefer to happen is for the Application Server to evolve on its own and the database to be independent," said Ashok Segu, chief technology officer of Blue-Line/On-Line, which provides Web-based project management software. "So, I can use the Application Server and plug it in any databases in the back-end. I'm thinking I have to switch my platform, so I don't get stuck with Oracle."

A typical application server sits behind the Web server and handles users' browser-based requests for dynamic Web pages or information coming from back-end databases.

But not only is Oracle 8i a full-function database server, it also includes a built-in application server, and an "Internet File System" to store and manage existing documents created from different applications, such as Web pages, email, word processing files, and multimedia data. Many analysts see the Internet File System as a technology intended to bypass Microsoft's Windows NT operating system.

"The things he [Ellison] says indicates that he views 8i as the strategic weapon to fight Microsoft. And he never really talks about the application server," said analyst Anne Thomas, of the Patricia Seybold Group. "That lends the impression in any case that you don't need anything other than 8i."

Giga Information Group analyst Mike Gilpin said it's more than just an impression. According to Oracle customers he's talked to, Oracle staff, touting the benefits of 8i, have told them, "Why do you need the [standalone] application server anyway?"

Gilpin said many large companies he's talked to feel that transaction processing in an application server will be more important in the future than a combined application server and database. Oracle, he said, currently doesn't have large-scale transaction processing technology, while IBM does.

"The real danger for Oracle is they've got this hammer," Gilpin said. "It's the biggest one, and they're seeing the whole world like a nail and suddenly everyone wants a screwdriver."

Oracle executives say the company would never have disparaged its application server.

"We were strong on the Application Server, and 8i is a big release and we then made a lot of noise about 8i," said Jeremy Burton, Oracle's vice president of database and server marketing. "It's not that we deliberately cooled off on the application server. We were focused on 8i and now that both are out there, you'll see much more balanced marketing."

If Oracle chooses to drop, or consolidate Application Server, Thomas said that most businesses will find that 8i meets all their needs.

"Now that most of the application server functionality has been implemented inside the database, there isn't as much need for a separate product," she said. "A lot of companies will be very happy to use a one-stop solution like 8i."

Analysts say adding application server features into 8i is a wise move because Oracle is essentially a database company. The strategy helps database sales, but at the expense of Oracle's one-time Web centerpiece, Application Server, Gilpin said.

"With an all-singing and all-dancing 8i that provides application server functionality, if you build things for it, you're locked into Oracle, which is exactly what they want to happen," he said.

Oracle executives say they're merely giving users options: those wanting a two-tier, client/server architecture can stick with the database. Those wanting three-tiers and the ability to connect to other databases and mainframes will buy Application Server.

"It depends what you want it to do. If I have an order entry application for 50 people and write in Java, I may not need an application server," said John Fomook, Oracle Application Server's marketing director. "If somebody wants to do an e-commerce Web site with potentially an uncountable user population, that has high scalability requirements," which may require a separate application server, he said.

While both products support Java and PL/SQL, the Application Server also has an Enterprise JavaBeans container and supports development in C and C++. "There is a lot of C++ code out there. The only way to integrate that into your new Internet applications is with an application server," Burton added.

But sources say internal politics within the company has put Application Server's future in doubt. In the latest round of budgeting, the Application Server received a smaller proportion of resources, one source familiar with Oracle said.

The Application Server cutbacks may have resulted from the recent departure of Beatriz Infante, Oracle's senior vice president of the Application Server division. "As soon as she's gone, others looked for an opportunity to kill off her babies," a source close to the company said.

The source familiar with Oracle believes the Oracle Application Server has a 50 percent chance of surviving as a standalone product long term. Oracle may decide to combine a complete Application Server with its database or Oracle Applications, the source said.

"There's clearly an increasingly growing faction at Oracle that thinks the Application Server is less strategic than 8i," the source said.

Oracle executives downplay the talk of any internal strife and plans to phase out the Application Server. Before, the development teams didn't work together, resulting in the two products using different Java Virtual Machines and object request brokers, Fomook said. "It was a healthy environment that breeds innovation. Not destructive."

"Much more cross-pollination"
But now the development teams of both products are run by a single manger in charge of integrating the products: senior vice president Chuck Rozwat. "There's going to much more cross-pollination," Fomook said.

History has shown that Oracle can kill off a product at any time. The company plugged an object-oriented development tool, code-named Sedona for years, before Ellison abruptly shelved the product.

Thomas, of the Patricia Seybold Group, believes Oracle will keep the Application Server separate for people who want a three-tiered architecture, but that the company will push database sales harder.

Whatever Oracle decides to do in the future, the Internet features in 8i protect its all-important database sales, Gilpin said.

"Oracle is not able to resist the temptation to make this strategic move: maintaining the reliance of a database," he said. "They're trying to resist the tendency of the architecture to move away from the relational database-centric view of the world to a more distributed component world."