Tuesday, November 14, 2000
Section: Business
Edition: Morning Final
Page: 1C
Illustration: Photo

Caption: PHOTO: [no photo credit]
[001114 BU 1C]

Oracle Corp. launched a direct attack on rival Microsoft Corp. on Monday, with new software for computer servers that eliminates the need for an operating system like Microsoft's flagship Windows 2000 software.

In an evening keynote address at the Comdex computer trade show, Oracle Chairman and Chief Executive Larry Ellison planned to announce that Compaq Computer Corp. will be the first hardware maker to build and sell Web servers using the Oracle application server software, dubbed Oracle9i.

''This is not the operating-system age. It's the information age,'' Ellison said at a news conference before his speech. ''It's about managing information.''

Ellison said the new machines will be cheaper, faster and more reliable than servers running Windows, Unix or any other full-fledged operating system.

''Customers will no longer have to pay a tax to Microsoft,'' said Mark Jarvis, chief marketing officer of Redwood Shores-based Oracle.

But Microsoft CEO Steve Ballmer, also attending Comdex, called the server ''the craziest thing I've ever heard of.'' Without an operating system, customers can't add features such as security and network management software to the server.

'Server appliance'

Oracle9i will run atop a thin-kernel operating system, based on Linux and Sun Microsystems Inc.'s version of Unix, that will be used only to manage the hardware of the server.

Oracle's application server software then would manage whatever Web-based business applications the customer wanted, from sales-force automation to supply-chain management. Oracle9i competes with IBM's Websphere and BEA Systems' WebLogic platform.

Oracle and Compaq plan to sell the so-called ''server appliance'' with the application server software already installed. The customer then would have the option of what applications to buy to run on the application server. Oracle plans to offer a service to manage the servers on behalf of customers.

Compaq Chairman and CEO Michael Capellas was scheduled to join Ellison on stage at the Las Vegas Hilton Hotel and throw his weight behind the new server, which will ship in December and be used to manage Internet applications such as Web caching.

With ''Oracle9i application server technology, we aim to provide customers with the performance, expandability and functionality required in high-end Web server environments,'' Capellas said in a news release before the speech.

'As good as sliced bread'

Ellison said he expects to announce similar partnerships with HP and Sun soon. And the company plans a major announcement today in the business-to-business software arena.

Anil Vasudeva, president of San Jose-based IMEX Research, said the application server appliance would work well in small businesses and provide an alternative for departments in large companies. ''This idea is as good as sliced bread,'' Vasudeva said.

Oracle was quick to emphasize that its new relationship with Compaq, a longtime partner of Microsoft, was a blow to Redmond, Wash.-based Microsoft, the world's largest software company.

''Microsoft has threatened and bullied their hardware partners constantly,'' Jarvis said. ''Now they are jumping ranks.''

Compaq, however, said that the partnership doesn't affect its relationship with Microsoft.

''We value the strong relationships we have with Oracle and our other partners,'' said Arch Currid, spokesman for Compaq. ''And we will continue to work with Oracle and our other partners in servicing the needs of our customers.''

Ballmer's response

Ballmer ridiculed Oracle's initiative. He said Ellison had come up with a similar server idea a couple of years ago, nicknamed ''Raw Iron,'' that cut out the operating system. But Raw Iron fizzled, and nothing in the high-tech industry has changed in a way that makes Raw Iron a better idea, Ballmer said.

The operating system is important to servers, Ballmer said, especially if you want to add security and network-management features. (Ellison acknowledged that weakness in the Oracle9i architecture, but he said users could always add another server with those features.)

As for Compaq's agreement to manufacture and sell the server, Ballmer said, ''I won't like it, and I will register that with Compaq.''

Aside from Microsoft, Ballmer said Oracle also is making an attack on partners such as Sun, which sells hardware that runs Solaris, its own version of the Unix operating system for servers.

Sun Chairman and CEO Scott McNealy has been a vocal ally of Ellison in their long-running feud with Microsoft, and Oracle's core database software is often found running on Sun servers.

''This is an attack on McNealy more than anything else,'' Ballmer said.

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