Oracle Makes IM, Collaboration Play

The firm's updated suite faces off against Lotus and Microsoft in its latest bid to become a force in enterprise messaging and groupware.
Enterprise software giant Oracle is aiming to go head-to-head with Microsoft and Lotus in collaboration tools, launching a new suite of services that includes a host of instant messaging and related applications.

The product, Oracle Collaboration Suite Release 2, includes the company's first real-time messaging services, adding on to the combined voicemail, e-mail and fax inbox features launched with Release 1 in July.

Executives at the Redwood City, Calif. company said they had seen a need for more real-time tools for collaboration, however.

"One of the things that we said from a broader point of view is that we wanted to add synchronous collaboration," said Steve Levine, vice president of marketing for the suite. "All the pieces we had were about asynchronous communications, such as e-mail."

Accordingly, Release 2 offers a service dubbed iMeeting, which provides for instant messaging, shared Web browsing, application sharing, Web conferences and enterprise-wide presence -- the ability to detect whether a user is online or offline, similar to the AIM Buddy List.

"In the same mode of simplifying and consolidating as Release 1, we consolidated the different types of real-time communications," Levine said.

The product, expected to ship during the first half of next year, marks Oracle's entrance into the messaging and presence space, although it comes as part of a larger suite of services that Levine said the company expects will appeal to a wider range of enterprise purchasers.

"What we see happening is this idea of a collaborative suite," he said. "Enterprises won't naturally take point products for e-mail and instant messaging. Instant messaging especially is ... an interesting challenge for enterprise applications. The market sort of views it as a free thing."

Levine also pointed to the increasing rate of consolidation among vendors of enterprise collaboration technology vendors.

"Look at Documentum buying eRoom, and IBM buying content management vendor [Tarian]," he said. "You're seeing consolidation of the collaboration tools. And while they'll still exist a market for point products, we priced the suite so you get a suite to solve your collaborative needs."

Entrenched Rivals

It's a gusty move for Oracle, which has traditionally had poor luck in the collaboration and e-mail market in the face of larger competitors. Indeed, executives would like little more than to see the Collaboration Suite gain a foothold in the billion-dollar market now dominated by IBM's Lotus products, and Exchange from Microsoft -- which has long been the target of Oracle's most acerbic rhetoric.

Not coincidentally, Oracle's big push into collaboration comes amid growing turmoil for Microsoft, which is in the middle of making two hard sells for clients: a controversial new upgrade pricing structure; and an upgrade to Exchange 2001 for users of Exchange 5.5, which will be compatible with Microsoft's much-touted, but as-yet-untried .NET infrastructure.

As corporate IT decision-makers weigh the benefits of adopting either, Oracle hopes to tilt the odds in its favor with pricing that would see buyers potentially paying less than half what they do for Exchange's per-seat license fees. Additionally, Oracle is discounting its product for Exchange 5.5 users, making it cheaper than migrating to Exchange 2001.

Aside from price incentives, however, Oracle also is pointing to the cost benefits of consolidating enterprise-wide e-mail and collaborative tools on a single, database-driven platform.

Similarly, the firm also hopes to unseat IBM's Lotus division from its equally domineering position in the field. (Lotus' flagship Notes is thought to top Microsoft in terms of revenue, while Exchange leads in number of customers.) Again, Oracle is pitching cost-savings as its prime differentiator against the rival's e-mail, IM and collaboration offerings.

"We view Exchange as the No. 1 competitor in the space, and they're providing us with a market opportunity," Levine said. "But there's opportunity within the Lotus space too. They do offer more of a collaborative environment, with Sametime and QuickPlace, but with Release 2 we can meet that functionality and still have a better cost of ownership."

Try, Try Again

While the tough talk is typical for Oracle when discussing its two chief rivals, it also underscores the importance of the effort, which is but the latest attempt by the company to enter the enterprise e-mail and messaging space.

In 1999, the company scuttled its InterOffice product, saying later that the market had been saturated for e-mail and collaboration applications. Last year, Chief Executive Larry Ellison unveiled the Oracle 9iAS E-mail offering, but the offering has yet to become a significant revenue driver for the company.

Since then, the company redoubled its efforts, acquiring Canadian collaborative software developer Steltor for an undisclosed sum and turning the firm's calendaring technology into a central part of its new Collaborative offering.

Oracle also needs the suite to be a success for another reason: to help deliver on a promised return to profitability next year, after six quarters of declining revenue.

But Oracle will face renewed competition from Microsoft in the collaborative arena as well. The Redmond, Wash. software giant is busily preparing for the mid-2003 launch of its Greenwich platform, which will provide the infrastructure for real-time communications services within its .NET Server platform.

The launch will bring to market an OS-level interface for instant messaging, video and audio streaming, and other collaborative tools. Earlier this week, Microsoft also introduced an enterprise IM gateway that, in conjunction with several vendors, manages company employees' use of the public MSN Messenger network. It's Microsoft's first effort to market corporate controls for external IM communications, as Exchange Instant Messenger doesn't extend outside of the enterprise.

For its part, Oracle said its exploring ways to similarly expand its own offering. Levine said the company will look at making the Suite's messaging and presence applications interoperable with external collaborative services, but declined to go into detail about how the firm plans to pursue such a route.

"Most of the functions of the suite have been intra-enterprise, but as we come to market next year, we believe that we will be working on a solution for inter-enterprise messaging," he said, adding only that such a product would be "a function of building the right partnerships."

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