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Built-in XML: Oracle's sales salvation?

Looking to regain market share lost to its rivals, the company is launching a new version of its flagship database software. Topping the list of new features: XML support.

Oracle, looking to regain market share lost to its rivals, is set to launch a new version of its flagship database software.

The software maker said it plans to ship a new release of its 9i database later this week or early next week. Topping the list of new features in the release is more fluency in XML (Extensible Markup Language), a Web standard for exchanging information that is a cornerstone of Web services software development.

The company hopes the update will reignite its database sales. Oracle's dominance in the database market has eroded in the past year as a tough economy and stiff competition from IBM and Microsoft have slowed sales. IBM surpassed Oracle in overall sales in 2001, according to a Gartner study released last week.

Gartner analyst Betsy Burton said the XML support is significant, but it won't radically improve database sales immediately. What's more important, she said, is that Oracle has most likely worked out any lingering kinks in 9i with this second release. Many companies hold off on buying software products until the second release to ensure all initial bugs are fixed.

"9i adoption has been slow," Burton said, "but people always approach the first release tenuously. With the second release, people will be more open to move to it. That in turn will increase the number of customers willing to consider the additional options."

According to Burton, Oracle lost market share for several reasons, including economic belt-tightening, the dot-com implosion, and credible database alternatives from Microsoft and IBM.

Oracle also needs to patch up relations with its customers, Burton said. Oracle angered many customers two years ago by a pricing change that made its database more expensive. Last June the company revamped its pricing policy to make its pricing more in line with IBM and Microsoft, which was a good first step in wooing back its customers, she said.

Burton said Oracle needs to improve its sales tactics, which has been overly aggressive in the past.

A highly publicized scandal over a contract with the state of California didn't help Oracle's image. "One positive (about Oracle's sales slowdown) is it's not a technology issue," Burton said. "It's a culture and business practice issue. If they can straighten this reputation out, they will be much better off."

XML looms large
Bob Shimp, vice president of Oracle database marketing, said the built-in XML support could give Oracle a competitive edge, citing analyst reports that predict that the majority of transactions in the coming years will use XML.

But any edge will be short-lived. Oracle's main rivals, IBM and Microsoft, have similar technology in the works. IBM plans to release a test version of its newest DB2 database this summer with a final version slated for release in the third quarter. Microsoft will ship a test version of its newest SQL Server database--code-named Yukon, in the second half of the year, with a final version released in 2003.

Gartner analyst Ted Friedman says although improved XML capabilities in 9i is a logical step for Oracle to take, it won't guarantee future success.

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Using XML in a database was a complicated task, requiring the XML data to be translated so it could be stored in the database, Shimp said. "It didn't run fast enough to be usable."

Now, the updated 9i database can support XML documents, giving businesses faster access to data, he said.

The updated database could also spur customers to buy add-on technology from Oracle, such as advanced security and clustering features. Clustering lets businesses harness multiple servers to run a very large database, allowing servers to share work or take over from each other if one fails.

The new 9i release will also feature better performance because it includes all the software patches and bug fixes that the company has released since the first version of 9i was launched last June, said George Demarest, Oracle's senior director for database marketing.

"It's the first major maintenance release. A lot of customers who have been evaluating 9i wait for that release," he said. "So all those bug fixes have been out almost a year. It's more stable, faster, and we've done more tuning."

With the new release, Demarest said the company will renew its focus on the Linux and Windows operating system markets and aggressively pursue sales in those areas in the next month or two. Other new features include improved software for managing databases and Oracle Data Guard, which allows businesses to make better use of their back-up databases.

In the past, back-up databases simply waited for the primary database to go down before doing any work, Shimp said. The new feature allows businesses to use the standby database to analyze data and run reports. The new feature also allows companies to reduce the workload on the primary database, parceling the work to the back-up database, he said.

Oracle 9i release 2 will be available on multiple operating systems, including Solaris, Windows, Linux, HP-UX, AIX and Tru64. Pricing has not been announced.