Oracle Brings ASPs Back From the Dead – 2

Dateline: San Diego, Jan. 22. as the city prepped for the Super Bowl, workers rushed to build temporary platforms and property demarcations, presumably for impromptu celebrations.

Those in IT who have seen one “platform” after another come and go might make a quick analogy. But Oracle, at its AppsWorld conference here, hoped that its platform for building applications was solid and permanent.

For the most part, Oracle concentrated not on the platform aspect of its applications strategy but on costs. The company had two major announcements at the show. The first was on Business Flow Accelerators—a combination of technology and outsourcing arrangements that Oracle claims can reduce implementation time by 60 percent and reduce costs by 30 percent. Next, Oracle pumped up Oracle Outsourcing, itself a rebuilt ASP business model, in which a vendor offloads the administration and maintenance costs of business applications. In this case, that business application revolves around Oracle E-Business Suite 11i.

For the most part, none of this sounds any different from the ASP market of yore—the one that promised reduced costs and reduced headaches, yet for the most part failed miserably. Whats different is not the ASP market but Oracles approach to flexibility. Oracle is promising that this time customers can choose what can be outsourced and what remains organic. Oracle also says it will provide for free an overview of the costs of any contract upfront and stick by that overview—a guarantee, in other words.

This is a fantastic start to a nagging problem in the tech sector: the ability of companies to measure ROI, set budgets and get what they pay for. Unfortunately, it reeks of marketing. Oracles campaign applies only to Oracle products, especially those built around E-Business Suite. While Oracle says 75 percent of its applications customers are “engaged” with 11i, its not clear how many companies actually use Oracle applications in the first place.

Though the ASP market was plagued with flaws, overhyping the business model was one of the biggest. For the new model of ASPs to succeed, Oracle should understate and overdeliver.

Can Oracle understate anything? Write to me at john_taschek@ziffdavis.com.

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