Oracle plans industry-tailored upgrades

Oracle will tailor the next release of its business applications to specific industries and double the size of its application...

Oracle will tailor the next release of its business applications to specific industries and double the size of its application server sales force as it tries to wring more dollars out of the server software market.

The software giant has also reaffirmed its earnings forecast for the current quarter, saying it has yet to see the slowdown in spending that is affecting some other software suppliers.

Chief executive Larry Ellison said he is on the prowl for further acquisitions.

The next release of Oracle's E-Business Suite, version 11.5.10, will debut later this year with dozens of new functions for industries such as manufacturing, health care, aerospace and utilities. "We have had an intense focus on industry-specific functions for this release," said Ron Wohl, executive vice-president for Oracle's applications business.

For manufacturers, an area where the company is relatively strong, the suite will include new functions for transport planning, international drop shipments and transactions based on RFID. It is also targeting health care, one of its weaker areas.

The company's strategy ingludes a "major functional and user interface upgrade" for its CRM applications, which will provide more up-to-the-minute information about interactions with customers, Phillips said.

Oracle's applications business revenue grew 2% in its 2004 financial year, although in the final quarter it declined 6%. Its battle to acquire PeopleSoft appeared to have slowed sales at both companies, said David Cooke, a vice-president at IT services company Capgemini, who predicted an upturn for the rest of this year.

Oracle is also due release an upgrade to its business intelligence tool, Discoverer. Known internally as "Drake", the upgrade will have a new interface that will help Oracle to compete with Business Objects, Cognos and other specialty suppliers.

On the application server side Oracle is doubling its field sales force to capitalise on what it sees as strong interest in the product. At the same time, however, some customers seem to have balked at its strategy of shipping the application server, portal server and integration server preintegrated on a single CD.

Although customers only have to pay for the software they use, some felt they were being forced to buy all of the products so Oracle will ship a new version of the product that makes it easier for customers to install only the parts they want.

Oracle sales are off to a strong start for the current quarter and Oracle is on track to meet its target of between 6% and 9% revenue growth, in contrasted to recent earnings warnings from PeopleSoft, Veritas, Siebel Systems and others.

Ellison portrayed the warnings as an omen of further consolidation in the software industry. "We will have an opportunity to buy several companies," he added, although he's unlikely to attempt another big merger while Oracle is still battling for PeopleSoft.

James Niccolai writes for IDG News Service

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