Oracle last week added a new twist to its online application
hosting service, announcing that users will be able to run the
software on their own servers while Oracle handles the
administration and support work on a remote basis.
The offering is designed to make application hosting more appealing
to users who don't want important business data stored on systems
they don't control, Oracle said.
"There are still a lot of companies that want to have their data
sit on a server close to them," said Timothy Chou, president of the
software vendor's Oracle.com hosting unit.
Like other application service providers (ASPs), Oracle previously
required users to let it house and manage the full
hardware/software combination for applications Oracle hosted. But
the company is now offering certified configurations of its Oracle
E-Business Suite applications through server vendors for use within
corporate datacentres.
Compaq is the first hardware vendor to make the off-site hosting
configuration available, for use with its ProLiant DL580
servers.
Joshua Greenbaum, an analyst at Enterprise Applications Consulting,
said Oracle was pushing harder on the ASP front than application
rivals such as SAP or PeopleSoft. Oracle wants to "get out of the
business of selling and supporting multiple installations running
on multiple [hardware] platforms," he said.
Oracle's plan is a sound one, Greenbaum said. But he added that the
software vendor still has to "fight a lot of institutional inertia"
on the part of users.
Oracle has boasted that it has 125 hosting customers worldwide,
including insurance company Cigna and the Bank of Montreal. But in
a recent survey by Aberdeen Group, members of the independent
Oracle Applications Users Group indicated that they were sceptical
about the ASP approach.
Topping the list of reasons was a concern that relying on a hosting
firm would leave companies with no control of critical business
processes.
For a firm that needed little customisation, the ASP system might
make sense, said Raman Batra, an IS manager at Legerity, a
manufacturer of communication chips. The company went live with
Oracle's E-Business applications for human resources and financial
reporting last year. "[Our] business needs are not as cookie cutter
as an ASP-hosted solution," he said. "The cost of outsourcing would
not make business sense if it could be done in-house."