Oracle customers explore application server strategies

SAN FRANCISCO — The application server market has become crucial as companies move towards deploying Web services, an Oracle Open World panel said Tuesday.

Oracle Corp. announced the second release of its 9i Application Server, which will include improved clustering, caching and availability features, but perhaps most importantly, support of the latest J2EE standard, Java Enterprise Edition 1.3.

Open standards such as Java, SOAP, LDAP and UDDI have reached a new level of importance as companies look to move services onto the Web and simplify their IT infrastructures, said Diana Billingham, senior vice-president of technology consulting at Cap Gemini Ernst & Young (CGEY).

CGEY clients are grappling with two main issues, she said: the spiraling cost of managing an IT infrastructure and the miscellany of different products from different vendors integrated into that environment.

“Accessing the data is becoming a problem for these corporations,” said Billingham. To help solve some of them, organizations will be building applications on the Internet and buying and selling more services online. “I think forward-thinking companies will be moving in that direction. . . 9iAS can be a very good foundation on which to build.”

Major British bank Barclays is looking to deploy 9iAS to reduce IT costs and simplify client portal offerings. The bank is consolidating disparate technologies with Oracle solutions, said IT director Mark Dixon. Barclays was operating on 80 different flavours of Unix, for example.

“Picking best-of-breed (solutions) has caused problems. We had to write the applications several times for different channels,” added Dixon. It was expensive, the customer experience was different based on what channel they were using and there are bugs in some applications and not in others, he said.

“We’re getting to a point where we only have to write business applications once. . . . (Java) has given us that consistency and certainty of execution.”

Barclays is largely an IBM shop. It considered IBM’s WebSphere for its application server but ultimately went with 9iAS since it preferred Oracle’s consulting practice over those of competitors, said Dixon.

The California Public Employees Retirement System (CalPERS) is also looking to consolidate technology on Oracle platforms. Sacramento, Calif.-based CalPERS manages retirement benefits for the State of California and deals with more than 2,400 different governmental organizations. “I’m looking to knock the costs out of the organization, quite honestly,” said CalPERS CIO Jack Corrie. “I have over 200 software products in my inventory. I’m looking for anything I can do to simplify that.”

CalPERS plans to deliver Web services in the near future. “We have a major strategy of moving our business functions to the Web,” said Corrie. He also pointed out that Web delivery is much cheaper than over-the-counter or IVR, and CalPERs will pare down its Web offerings for ease-of-use. “Most of us have three, four or five portals (such as) B2C, B2B.

“It’s much simpler to have that single portal . . . which can be personalized.”

Application server technology is starting to perform functions that were previously the purview of the database, said Illuminata analyst James Governor. There’s a lot of data and messaging information flying around an organization, he said. “You need a mechanism to pull that altogether, and for a lot of companies, the application server is going to be playing that role.”

The AS market is growing for Oracle based on those customer needs, observed 9iAS senior product director John Magee. “When we look at what companies are doing in business computing (such as supply chain automation, portal development and trying to reduce IT budgets) we often find application servers in the middle of that,” he said. “They’re becoming e-business platforms.”

Application servers may be a key to consolidation and Web service delivery, but open standards alone aren’t going to differentiate Oracle’s 9i offering, said IDC Canada Ltd. analyst Warren Shiau.

Open standards-based application servers have become the norm among industry vendors. “It doesn’t matter what Oracle says, it’s not a competitive issue. It’s just the direction that everyone has to go,” said Shiau.

Application servers will be chosen on other features, and Oracle has developed a solid offering by providing features like security, said Shiau.

As the AS market heats up, margins will fall, he added. Competitive pressure is forcing vendors to drop prices. Oracle will have a decent shot at the AS market, he said, since it brings other products to bear like databases — its closest competition here is IBM. Both Oracle and IBM (and to a lesser extent Sun Microsystems) can operate their AS businesses at a loss. One of the industry’s current leaders, BEA, may face tougher times, said Shaiu, since it doesn’t have such a variety of offerings to fall back on.

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