The application server market has matured. There were IBM, Sun and Oracle. We hear that Sun has moved out of the space. Does Oracle see a Microsoft entering the vacuum? They normally wait for market maturity and then come in with a price-killer application. Comment?

Yes and no. Yes, Microsoft is definitely attempting to enter the Application Server or Application infrastructure market space with their .NET framework. However, a central premise of Application Servers is that they provide users with a server environment that is not tied to any operating system. This has made it much more difficult for Microsoft to enter the space since their goal is to make Windows the dominant operating system. The related strategy forces them to promote their own proprietary .NET development standard and automatically puts them in a separate market from J2EE application servers. As a result, they require users to choose a fundamentally different and proprietary programming language and set of services - therefore, even if Microsoft offered a “price-killer application,” the basic technology would hold more weight as a deciding factor, not price factor. Further, competition among J2EE Application Server vendors have driven down the prices for application servers, so any attempts by Microsoft to make .NET available for a lower price are not likely to be significant.

In today's economy, no one is spending on new enterprise software. Where do you think the market is for new enterprise software platforms?

Enterprise-Wide Security Management and Integration are two of the biggest challenges facing organizations today. With the Internet boom in the late 1990s, companies began moving to Web-based business models, and in their rush, chose to use a hodge-podge of middleware solutions to get their e-Business initiatives off the ground. This middleware complexity has made it extremely time-consuming and expensive for those companies to roll out and manage new applications. Further, companies also face the challenges that stem from their security infrastructure being so fragmented and, as a result, extremely vulnerable. Subsequently, we see IT strategies focused on saving money and using enterprise software platforms in three new areas - middleware rationalization, business process automation, and security management. Application servers that offer a breadth of integrated functionalities are fast becoming the "hub" of business processes, serving as a key integration point for Internet applications and communication between internal employees, supply chain partners, and trading partners.

Packaged software vendors used to have totally proprietary tools: from front-end to middle tier to backend. The backend slowly went to rely on tools like the ones from Oracle. Do you see enterprise application integration (EAI) getting easier?

EAI projects have always faced four challenges - a number of different techniques were used to tie systems together; the software solutions available to integrate systems were limited in functionality; the resulting implementation projects typically generated huge cost and time overruns; and once the projects were created, they were extremely difficult to maintain. As a result, the EAI project itself frequently became a legacy system. Oracle sees EAI simplifying in three ways:

• Modern programming languages such as Java and J2EE are increasingly being used to develop new applications, making it a lot easier for companies to define and maintain interfaces into their new systems.

• Web Services technologies provide a standard way to interface with legacy systems via XML, reducing the challenges associated with data translation from a various formats and the need to support multiple proprietary communication protocols.

• The software solutions for EAI have become more robust and offer more complete, standards-based solutions.
All these trends promise to make EAI easier in the near future.


Has enterprise software become too expensive, despite its inherent ability to save money for enterprises?

There are four things to consider when purchasing enterprise software: Price of the software product, the associated hardware costs, the cost of labor to implement the product, and the cost of labor to manage the product. Recent Gartner research shows that enterprises are finding the price of software remains the smallest portion of a company's budget compared to labor and hardware. Oracle focuses on developing business software that is not only offered upfront at economical prices, but also serves to reduce complexity and cost and increase productivity. For example, by streamlining the automation of business processes and providing a full integration platform, Oracle9i Application Server helps lower “labor to implement costs.” Fully integrated system management capabilities reduce “labor to manage” costs. And Oracle's breakthrough technologies such as caching and clustering allow people to use commodity hardware, which helps them to dramatically reduce hardware costs.

Oracle has come with its 9 and will soon come out with Xi. Where do you see new markets for your growth?

Within Oracle9i Application Server, Oracle sees the following areas as the biggest markets for growth: integration in middleware, Web services, security and application management, business intelligence and collaboration. Essentially, we see users needing to take advantage of software to automate business processes, consolidate information, and gain more intelligence from their systems. While Oracle9i Application Server already addresses these needs, you will see us continue to enhance the technology and advance the capabilities our customers can take advantage of.

Where do you think web services for application development is heading?

Oracle believes Web Services as a technology for application development is heading in the following directions:

• Provide richer facilities for developing enterprise applications as business components with support for the notion of transactions, reliable messaging, security, coordination, and orchestration

• Create composite Web services by orchestrating Simple Web services together

• Enable peer-to-peer models of communication between Web Services

• As a standard framework to wrapper, provision, and integrate legacy systems into corporate business processes.
Oracle is evolving both its application server and tools and working with a number of partners to ensure that developers have a very simple model to develop and deploy these richer, enterprise-scale Web Services

A couple of years ago, database used to be the de-facto standard. Now that application server is getting to be used more and more, do you see possibilities for a low-end entrant in the database market?

Early on in the industry, there were concerns that application servers would reduce database requirements and would be used to migrate applications from the database to the middle-tier. Neither of these issues are a real concern - first, application servers migrate data off the desktop onto servers and not from databases. Second, application servers are being used to build applications with even greater reliability and high availability, which requires the database to meet even more stringent requirements. Oracle sees application servers and databases working closely together and optimizing the ways in which they provide transaction management and concurrency control, high availability, centralized security and systems management. As a result, we believe that customers will increasingly use these two software components in concert as an Internet Software Platform.

Why is there no big Indian company in the enterprise software space?

Several companies such as Infosys, Satyam, and WIPRO have focused mainly on providing services—a logical strategy for companies in early stages of development. As these companies and others in India expand and shift their focus from services to focus more on products, we will see Indian companies also emerging as product providers in the enterprise software market.