26 June 2002 Database software giant Oracle is to target BEA Systems customers in a determined push to grab the market for application servers.
The Redwood City, California-based company said yesterday that it will go after Oracle database customers that run San Jose, California-based BEA’s application server, WebLogic, in a bid to boost sales of its application server product, Oracle 9i Application Server (9iAS).
Application servers handle the interactions of application programs on servers with front- and back-office systems. Oracle’s share of the fast growing market for these servers was 12% at the end of 2001, compared to BEA’s 25% and IBM’s 23%, according to analysis firm IDC.
Oracle’s sales force is now “very focused” on switching customers running Oracle’s 9i database with BEA’s application server over to Oracle 9iAS, Mark Jarvis, Oracle’s chief marketing officer, told Oracle’s user conference in Copenhagen, Denmark yesterday.
“Without exception, every BEA customer is an Oracle customer. This means that BEA’s tent is in our garden, and it is time BEA’s tent went elsewhere,” he added.
Oracle is aggressively targeting the application server market for two key reasons.
Firstly, it is still a fast growing market and will be worth $1.5 billion (€1.6bn) by the end of 2003, according to IDC.
Secondly, vendors see the application server as a key software infrastructure product. It will enable them to sell additional software tools for application development, enterprise integration and building web services — an approach for locating, developing and delivering software modules as services over the Internet.
Meanwhile, to address its slumping software sales, Oracle is heavily targeting European governments and small and medium-sized enterprises (SMEs).
European governments are generating strong demand for Oracle products, including its 11i suite of enterprise applications and database software, says Sergio Giacoletto, Oracle’s executive vice president for Europe, the Middle East and Africa. “The governments in Europe are investing a lot in support for [online] citizen services, human resources, financial and procurement applications, as well as back-office [systems].”
Oracle also claims sales to European SMEs – defined by Giacoletto as organisations with revenues between €200 million and €1 billion – are growing strongly. Oracle actually increased the volume of low-end software sales to SMEs in sectors ranging from engineering to textiles during its 2002 financial year, claims Giacoletto.
But this was not enough to offset the company’s decline in sales to large corporate customers. Oracle posted revenues down 11% to €9.67 billion for its financial year ending May 2002.
In the SME sector, many industry experts see Oracle as playing catch-up with software giant Microsoft, which has acquired two-mid market vendors – Vedbæk, Denmark-based Navision, and Fargo, North Dakota-based Great Plains Software – since 2001. However, Jarvis said that Microsoft had “huge ongoing engineering tasks” ahead to integrate the acquired software into its own product suite.