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DAILY NEWS AND INFORMATION
FOR THE GLOBAL GRID COMMUNITY / OCTOBER 6, 2003: VOL. 2 NO. 40
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Special Features:
ORACLE'S GRID CONCEPT: LESS IS
MORE
Oracle Corp's new Grid software that allows companies to stitch together
separate computers is designed to win customers for the long term, not provide
a quick sales boost, a senior executive said on Thursday.
The new 10g Grid software due later this year will be given away to
existing
Oracle customers. It lets them use their computers more efficiently, so they
can delay buying new ones, Executive Vice President Charles Phillips said.
"It allows companies to save money. The money they save, they can put in
other
information technology projects. Or they can stick it in the bank. But if I've
learned anything, it is that if you save people money, they will come back to
you," said Phillips, who was a software analyst at Morgan Stanley before he
moved to Oracle earlier this year.
In its latest quarterly results, published two weeks ago, the world's
second
largest software maker posted a seven percent drop in revenues from new
software licenses, an indication that demand for big software projects is not
yet recovering, despite strengthening U.S., Chinese and Japanese
economies.
Phillips played down the decline, saying the quarter was depressed because
the
company was training staff to sell the new Grid products. Also, he said that
in an economic recovery large software projects usually lag behind hardware
sales -- global computer sales have already started to pick up in recent
months.
Long Term
Oracle, which is awaiting approval from U.S. and European antitrust
regulators
for a $7.3 billion hostile bid on U.S. rival PeopleSoft to close the gap with
its German rival SAP, also has stepped up other activities to serve long-term
goals, such as improving customer service.
"It doesn't buy us business in the short term, but over the longer term it
will allow us to become a strategic partner," said Phillips. As an analyst and
an outsider before he joined Oracle, he believed the firm needed closer
customer ties.
Having assumed responsibility for a customer care organization soon after
his
start, Phillips was put in charge of global marketing in July, which is now
pushing the Grid product.
Grid software will knit together separate server computers that run
business
planning applications and databases and look for computing power anywhere on
the Grid network.
Some 40 to 60 percent of computing capacity remains unused, according to
market researchers.
"Such a percentage would be unacceptable in any other industry. Imagine
airlines working with 50 percent capacity," Phillips said.
The Grid software is designed to work on cheap servers that run on standard
Intel processors and the Linux operating system, making it easy for a company
to first share computers and then add cheap servers if they need them, rather
than buying big new systems.
The software will compete with that of IBM, Hewlett-Packard and Sun, but
will
work on computers sold by those companies. All three promote Grids.
"Grid computing is a major component to make computing a utility or a
service," Phillips said.
Oracle claims its software is better than rival products because it is easy
to
use, quicker to install and automatically shares applications over different
kinds of computers.
Phillips is bullish on Oracle's chances to generate additional sales from
PeopleSoft customers, should the hostile bid succeed.
He has been pointed out as one of the architects of the move, but Phillips
had
little to do with the takeover battle, which started only a few weeks after
his arrival, he said.
"It was not a new idea. The catalyst was when PeopleSoft made a bid for
J.D.
Edwards. The board said, 'We've talked about it for a year, now we have to
take decision, yes or no.' Obviously it wasn't no."
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