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At AppsWorld, Oracle promises profits, lower TCO

Facing the largest number of users ever assembled at its semianual AppsWorld event, Oracle Corp. forged ahead this week with a message that Oracle technology is cheaper to own and easier to operate than ever before.

SAN DIEGO -- Facing the largest number of users ever assembled at its semianual AppsWorld event, Oracle Corp. forged ahead this week with a message that Oracle technology is cheaper to own and easier to operate than ever before.

Executives from the Redwood Shores, Calif.-based enterprise applications vendor continued to push their Linux philosophy, encouraged outsourcing, and pledged to lower total cost of ownership (TCO) for clients. Oracle representatives estimated that 10,000 companies doing business with Oracle were represented at the show, more customers than the software maker has ever hosted at the event.

"We think we've hit rock bottom with this tough economy," said Jeff Henley, chief financial officer at Oracle. "It's a fact that there are backlogged IT projects waiting to gain funding from customers. We've seen signs that this is moving forward, and we're poised to grow again."

As a result, Henley predicted Oracle would show profits following its current third quarter, reversing the company's trend of losses over its previous six financial periods. Oracle earned $535 million, or 10 cents per share, during its second quarter, compared with a profit of $549 million, or 10 cents per share, for the same period last year.

Demonstrating that the company is continuing to provide value to existing users, Oracle announced that more than 75% of its customers have either gone live or are close to completing implementations of Oracle's flagship 11i e-business software package. Just one year ago, only 11% of Oracle's customers were working with the applications platform.

Among the announcements Oracle made to back up its "faster-and-cheaper" pledge was the introduction of Business Flow Accelerators. These packaged bundles of software and services are aimed at enabling midmarket companies to see faster return on investment (ROI) on Oracle applications. Each of the 26 Accelerators was designed around specific horizontal or industry-specific business needs, Oracle reported.

The firm also took steps to increase its value to the portal market by releasing software designed to make it easier for users to access data using a Web browser. This OmniPortlet capability is being added to Oracle's 9iAS application server package.

Oracle is also planning several major TCO initiatives, including moving more of its customers into outsourcing agreements and driving adoption of Linux-based enterprise systems.

"We now feel that Linux is ready for both database and applications customers," said Mark Jarvis, Oracle's chief marketing officer. "Even one year ago, we weren't ready to say that."

Jarvis pointed to Oracle's partnership with Raleigh, N.C.-based Linux distributor Red Hat Software Inc. as evidence that the firm is ready to leverage the open-source operating system with customers to whatever extent it can.

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