Oracle hopes to attract dozens of new software and services customers via a new initiative to offer applications hosting to European customers.
Launched as part of Oracle's Business On-Line (BOL) initiative, the service will see Oracle hosting its own applications and third party packages for Internet centric businesses and IT services firms in the UK and Europe.
However, the vendor will not allow other ASPs to resell Oracle applications in this way, as it wants to deliver a "homogenised service worldwide", according to Oracle chairman Larry Ellison.
Customers will be able to access the applications via a browser, and pricing will be based on usage levels. Customers can choose whether to access the applications via the Internet or private network, with the bulk likely to opt for the latter option.
The initiative was announced by Ellison at a highly hyped event in New York this afternoon, complete with testimonials from American customers who have already been sold on the BOL model.
"Software companies are going to have to be ASPs," Ellison said. "Everyone got it wrong and we got it right. All the dot.coms are coming to our ASP."
He predicted Oracle's Business On-Line customers would swell from 2,000 today to 10,000 in the next year, with the bulk of new applications customers likely to sign up to the BOL model in the next few years.
Software vendors would have to adopt the ASP business model or die, Ellison said.
"The software industry is in the process of huge, huge change. Software is on its way to becoming a service," he said. "We decided we had to become an ASP…ASPs are not yet really well understood but we think it's the future of the whole industry."
Business On-line is currently based on infrastructure exclusively supplied by Sun Microsystems, but as the result of a hardware alliance with Hewlett-Packard earlier this month, Oracle is committed to phasing in HP hardware to total at least 50 per cent of its overall IT infrastructure, including BOL.
Oracle's ASP announcement comes as no surprise to industry watchers.
Oracle has long been a supporter of the ASP business model and in July announced an iHost scheme to encourage Internet Service Providers to transform themselves into ASPs .
While still in embryonic stage, the ASP industry is expected to grow from $8.75 million to more than $1 billion in the next five years, according to recent research from analysts Durlacher. Proponents of the model claim it can reduce users' infrastructure and running costs by up to 40 per cent.
Ellison said applications hosting would appeal to customers in a wide range of industries.
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