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DAILY NEWS AND INFORMATION FOR THE GLOBAL GRID COMMUNITY / SEPTEMBER 15, 2003: VOL. 2 NO. 37

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ORACLE TAKES ON IBM WITH NEW GRID STRATEGY

Oracle Corp unveiled the latest version of its flagship database product, which is designed to stitch together disparate computer systems and take on rival IBM.

During the No. 2 software maker's annual U.S. OracleWorld conference, which ran last week in San Francisco, executives introduced Oracle's new 10g database, with enhanced features to support "Grid computing" by pooling servers and storage into a unified system that provides up-to-date business information.

"This is a key milestone in our battle with IBM," Executive Vice President Charles Phillips said in a break-out session with reporters.

Phillips, who was Morgan Stanley's star software analyst prior to joining Oracle earlier this year, said the technology announcements are "a culmination of our strategy. These are things we've been working on for a decade."

IBM unseated Oracle as the overall leader in total new database software sales with its acquisition of mainframe database vendor Informix in 2001. The company, along with Microsoft Corp, has also been making gains at the low-end of the modern database market that Oracle has dominated.

Further, IBM played a pivotal role in creating the Grid, or "on demand," computing concept, which has been adopted largely by government agencies and academic researchers.

In recent months, hardware and software makers such as Oracle, Sun Microsystems Inc and Hewlett-Packard Co have embraced Grid computing with the hope that budget-conscious big corporate customers will jump on the band wagon and start spending again.

Some analysts charged that by changing the platform upon which many business- management software programs run, Oracle is giving itself an opportunity to offer Grid-enabled software for automating such things as accounting, purchasing and human resources far ahead of competitors like SAP AG and PeopleSoft Inc, which Oracle is trying to acquire via a $7.3 million hostile takeover bid now being reviewed by antitrust enforcers in the United States and Europe.

"It gives Oracle an inherent technology advantage in the Grid environment," FTM Midwest Research Senior Analyst Trip Chowdhry told Reuters.

Joshua Greenbaum, principal of Enterprise Applications Consulting, disagreed.

"It just wouldn't make sense for them to use 10g for gaining an advantage over their applications competitors. Doing things that favor applications over the database is counterproductive," Greenbaum said, noting that most of Oracle revenues come from its database business.

Oracle also unveiled 10g versions of its application server and enterprise manager software.

Among other things, the company's new products will offer improved automated management features, integration capabilities and clustering technology, which allows users to tie servers together so they can handle more transactions and data volume without slowing substantially or failing.

Pricing and availability will be announced later this year, Oracle said.

Separately, an IBM executive was quoted as telling the Financial Times in an interview published online on Monday that a successful takeover of PeopleSoft by Oracle would hamper competition in the applications market.

An IBM spokesman declined comment on the remarks attributed to Buell Duncan, general manager of developer relations at IBM.

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