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'Who wants to be a millionaire?' Oracle's Ellison asks

CEO Larry Ellison is betting heavily on Oracle's next-generation e-business software--$1 million to be exact.

    SAN FRANCISCO--Larry Ellison is betting heavily on Oracle's e-business software--$1 million to be exact.

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    Ellison keynote at OpenWorld
    The Oracle chief executive today hawked the company's database and e-commerce software, guaranteeing the products together will run Web sites three times faster than rival offerings from IBM and Microsoft--or he'll give customers $1 million.

    "If the performance doesn't triple, we'll give you a million bucks," Ellison said in an attempt to woo existing IBM and Microsoft customers. The Oracle leader spoke for an hour to thousands of Oracle faithful attending the software giant's annual Oracle OpenWorld conference in San Francisco.

    Ellison later upped the ante by saying he'd give $10 million to anyone who can match Microsoft's published test results running a piece of software, such as an SAP human resources application, on Microsoft's database software.

    "It's nothing more than a PR stunt," said Barry Goffe, Microsoft's group manager for the .Net developer group. "It's clear they're scared that we're encroaching in their space. They basically have to scare people to not use our technology."

    What will they think of next? See CNET Tech Trends Oracle this week announced plans for its new Oracle 9i database, software that collects and stores corporate and Web information, and a new version of its application server, software that runs e-commerce transactions.

    Ellison said the $1 million guarantee is based on its new 9i application server, available this month, and its current 8i database. The new application server has new caching software, technology that replicates Web site information stored in databases and helps deliver information to Web surfers faster because sites don't have to retrieve database information each time a request comes in.

    Oracle executives said Ellison has made two prior $1 million challenges against Microsoft products and has not lost any money.

    Ellison touted the 9i products as the fastest, most reliable and easiest-to-use technology for companies to take their business to the Web. The company also is targeting two emerging markets--business trading exchanges and application service providers, online companies that rent software over the Web.

    The Oracle 9i database, due in March, features new "clustering" technology that will make the company's databases perform faster and more reliably than before. Clustering allows businesses to harness multiple servers to run a very large database, allowing servers to share work or take over from each other if one fails.

    "We should be able to tolerate any type of failure," Ellison said. "It could be hardware, software, a processor?any of those things can break, but users will never see it. Users will always have access to their data."

    As for ease of use, the company has melded many of Oracle's other software products into its database and application server. For example, the company has integrated its data analysis tools, which offer companies the ability to create complex reports by examining business information and seeking patterns and trends, such as online buyers' preferences.

    "It's our complete Internet deployment platform. We took 75 products and merged them into two," Ellison said.

    Oracle ranks first in the $11.1 billion database software market. In 1999, Oracle captured 42.4 percent of sales, followed by IBM with 20.4 percent and Microsoft with 7.8 percent, according to research firm IDC. Informix ranks fourth with 5.9 percent, followed by Sybase with 3.9 percent.

    Oracle also competes against IBM, Microsoft, the Sun-Netscape Alliance, BEA Systems and others in the exploding market for application servers and other e-commerce software.

    Oracle's stocks today fell 12 percent, down $9.50 to $69.25 after Oracle chief financial officer Jeff Henley told analysts that growth in database sales would slip this quarter from last quarter, but would rise again early next year. Database sales grew 32 percent year-over-year last quarter.

    "I don't understand the ups and downs (of the stock market) on a daily basis," Ellison said. "When we said we'd save a billion dollars, people said we were crazy. We will save another billion."

    Then Ellison turned facetious when told the company's stock has dropped about $17 since the company two weeks ago reported net profits of $501 million, or 17 cents a share, compared with $237 million, or 8 percent the previous year.

    Maybe it's "due to our disappointing earnings of 111 percent growth," he said. "I was hoping for 3,000 percent growth, but it's impossible for earnings to exceed revenue. I don't know. I'm an engineer."