Oracle Turns on Hosted Apps

Many IT managers are indifferent to e-business portal, citing privacy, quality concerns

Oracle Corp. will face some opposition from its customers in its latest effort to get them off the integration track and onto online hosted applications.

This effort by Oracle to sell its software as a hosted service is being built around a newly branded portal that will offer a packaged, all-or-nothing approach to buying its Web-based e-business software suite. By offering a range of functionality, this approach promises to get a business online quickly because applications will not need to be installed and integrated with third-party applications, officials said.

The strategy, announced at the Redwood Shores, Calif., companys AppsWorld conference here last week, encourages users to download ready-made applications via the Oracle portal, which provides access to Oracles applications and to software and services from more than two dozen partners.

While users are excited to have Web functionality, many IT managers who attended the conference said they are going to take a business-as-usual attitude and modify Oracle software on an as-needed basis.

In addition, some voiced concern that Oracle applications dont always work as promised and questioned why they should be expected to work better in the software-as-a-service model.

"We have to get our back-office systems to a point where we can even talk about integrating [e-business applications]," said Barbara Kroll, director of customer relations at Genencor International Inc., a specialty chemical and biotech manufacturing company based in Rochester, N.Y. "The stuff coming out from any vendors now is not perfect. ... Its foolish to assume that Oracle can do everything we need them to do. One size does not fit all."

Others had different reasons for being wary of

"I probably will not use it, for personal security reasons and data privacy issues," said Patrick Durbin, Oracle applications solutions manager at Carlson Shared Services, in Minneapolis. "That and Im not sure why I would need it. We host applications now, and I couldnt imagine as a company going to outside hosting. There is no reason to go outside."

Others, such as Joe Hayes, team leader of supply chain systems support at LG&E Energy Corp., in Louisville, Ky., said they think the mad rush to integrate business-to-business applications is all hype.

"Im not real happy with the B2B solution. Maybe in three to five years [it will be mature]," Hayes said. "Companies that are getting into it are experiencing a lot of pain with back-office solutions. Decisions are made at a very senior level, and [executives] dont really know what it takes to implement."

Another concern with companies is that Oracle wont be addressing certain vertical-market applications any time soon. Oracle Chairman and CEO Larry Ellison mentioned the aerospace, defense and energy industries in his AppsWorld keynote address as those services that wont be available soon.

Oracle also introduced its E-Consulting service, which promises to lower the cost of software implementations by cutting the time and number of consultants it takes to set up Oracle software. Oracle can do this in part by outsourcing some of the development grunt work in software integration to coders based in India and in part by forcing customers to change their business practices to match the best-practices methodologies prescribed by Oracle Applications.