Oracle's ASP service flounders in Europe

Oracle has just 10 European customers for its hosted applications service, but still expects half of its users to move...

Oracle has just 10 European customers for its hosted applications service, but still expects half of its users to move to the ASP model within five years, a senior company official told Oracle's European AppsWorld conference in Amsterdam.

Oracle's ASP business offers a managed, hosted version of the Oracle 11i enterprise applications.

"About 150 customers worldwide are using, which is not as big a number as we had hoped a year ago," said Sergio Giacoletto, Oracle's executive vice-president for Europe, Middle East and Africa (EMEA). "The take up of is disappointing."

The bulk of the customers are in the US, with only 10 in the EMEA region, Giacoletto said. Oracle now has over 12,000 customers worldwide on different versions of its applications software, he added.

Oracle is confident its ASP business will pick up, despite the current lack of interest.

"We expect half our [applications] customer base to use in five years time," said Giacoletto. "There is a move to standardised software. If the software weren't standardised the move [to hosted applications] wouldn't make sense," he added.

Hosted applications cannot be customised for each customer. However, this is no longer a factor with many implementations of the Oracle 11i suite of enterprise applications, according to Ron Wohl, executive-vice president of applications development at Oracle, who also spoke at the conference.

"We now have many customers that are implementing with zero customisation. Not that they didn't have to write some code for interfaces, of course they did, but they did not have to change any of our vendor supplied code," he said.

Wohl pitched the hosted applications as a way to save money and have more stable service.

"We can achieve at least a 50% cost reduction from a shared online hosted solution. When you can automate more there is less room for manual error, therefore you get much better service," he said.

However, Jeremy Young, president of the Oracle Applications User Group and business process manager at DHL Worldwide Network thought Oracle's long-term ASP ambitions would be a tough target to achieve.

"People are not yet comfortable about moving that part of running their business [the enterprise applications] out to a third party," he said. "They wonder if they're going to get the service they need. Once people start signing on, it could pick up, but not everyone wants to be a trend setter."

Read more on Business applications