Services & Software

Oracle hire signals focus on subscription services

Software maker snags Hewlett-Packard veteran to lead fast-growing division and report directly to CEO Larry Ellison.

Oracle has hired a former Hewlett-Packard executive to oversee its effort to sell software-hosting services, a relatively small but fast-growing unit of the company.

The new executive, Juergen Rottler, joins Oracle on Monday, fresh from his post as senior vice president at Hewlett-Packard. The 15-year HP veteran will report directly to Oracle Chief Executive Larry Ellison as executive vice president of Oracle On Demand, a division of the company that sells monthly subscriptions to hosting and maintenance services for Oracle's software.

Rottler's post is a new one within Oracle, and its creation signals a stronger effort by the company to crack the subscription software market. The company has offered software-hosting services for the past five years but has redoubled its efforts recently, as such services have gained popularity. A successful initial stock offering by hosting rival in June further validated the budding market.

Oracle says On Demand is one of its most fruitful new endeavors, announcing yesterday that first-quarter revenue from the division was 34 percent greater than in the same quarter last year.

Under the hosting program, customers license Oracle's software as they normally would but let Oracle set up, host and maintain the software on its computers for 3 percent to 5 percent of the cost of the software per month. The service is available for Oracle's database programs, as well as its business management applications and application server software.

Rottler takes over for Timothy Chou, who was formerly in charge of the On Demand business. Chou is expected to remain at the company, but his role may change, an Oracle representative said. At HP, Rottler was in charge of sales to government, education and health care customers.

In other management changes, Oracle said on Tuesday during its earnings teleconference that it had folded its government sales unit into its North American sales group, with Executive Vice President Keith Block overseeing the combined division.

Dow Jones reported this week that Oracle Senior Vice President Kevin Fitzgerald, who was in charge of government sales, left the company over the shake-up. An Oracle representative declined to comment on the report and whether Fitzgerald, who has spent more than 13 years at Oracle, is still at the company.