The Network Computer (NC) is regarded as one of the hottest topics in the industry. Businesses are starting to look at the merits of ditching the standalone approach to computing in favour of the NC.
No other company is doing more to promote the possibilities of this technology than Oracle. Much has been invested in ensuring that organisations start to move away from the philosophy of dispersed data centres to the centrally-held store offered by NCs. Is this a move your company should make? Are manufacturers doing enough to lure you away from your PC onto a 'terminal'?
In an exclusive interview, Ray Lane, president and chief operations officer at Oracle, maps out his beliefs to Business Computer World. Oracle's Hat Trick heralds good news for users who are looking for a set of applications, developed in Java, and able to fuse file formats with Microsoft Office and Lotus Smartsuite. Full details of this new technology are outlined.
Lane is not only concerned about the future of the NC. Rumours are rife that Oracle is thinking of combining forces with Netscape to challenge Microsoft's power. Is this true? Lane addresses the issue in this interview and offers some pointers for those who want to follow Oracle's progress on the Web.
Lane is a realist. While he looks to a bright new tomorrow, he acknowledges the burdens of the past and how companies can best use the products they have been working with for years. In response to this month's cover feature, Lane offers his views on the problems inherent in most legacy installations.
Business Computer World spoke to Ray Lane in October at the Hyde Park Hotel in London. Research editor Ian Stobie began by asking him about Oracle's time-honoured association with databases and how the company was focusing its efforts on strengthening its position.
Q: What would you say Oracle's core competence is?
A: We develop products and services that manage data. We understand how to find information in large databases. We know how to manipulate data, from relational to video and texts. Our activities are predominantly at the server end of the market.
Q: So your developments with the Network Computer (NC) are a foray into the client market?
A: Not really. If we were building NCs, that would be different, but we're providing the software for NCs. Without the server the NC is a piece of junk. I think the server market would have suffered had it not been for NCs. It would still have seen healthy growth over the next few years, but as the number of clients slowed down the number of servers would have slowed down too. The best way to grow servers is to grow clients.
Q: Could NC users' data be managed centrally by a service provider?
A: Yes. There is no persistent data storage on an NC, so it must be managed somewhere else, depending on the application. If it's an intranet server that holds corporate data inside the firewall, it could be managed in your own department or in your own company. But, as you say, it could be externally-based at an Internet Service Provider.
Q: When the Web first surfaced, the Internet industry's priority was to promote the service itself. But now the emphasis is on improving core functionality.
A: Absolutely. We saw what I call a publishing phase, where you had to put information into an HTML format, a standard style, so it could be viewed by any client machine - a Mac, PC or whatever. The second stage was much more dynamic. You could reach into a database and pull out information, change it into an HTML format, and then move it on to the Internet. We are now moving into the third phase. This involves tools that build applications to do things which core MIS systems do today. These include banking, consumer transactions, purchase orders and human resources activities.
Q: Is it best for companies to use tools to communicate with their existing core systems to do this kind of thing, or do they have to develop from scratch?
A: It depends what the original application was developed in. For example, applications created with our tool set, Developer 2000, will be able to use Web Forms, a product we are launching in February. It allows any application developed for the client-server to run as an Internet application, without the need for conversion.
Q: Why have you offloaded a lot of the work to the server?
A: The more traffic you have going back and forth from the PC to the server, the more performance will deteriorate. There are software companies, such as Peoplesoft, that have built most of their functionality into the PC. Users love the software, but they find it doesn't scale beyond a few hundred users. This means you cannot run a big application on it. You have to get information back to the server to do that. This solution, with more processing at the server end, is much more scalable.
Q: There seems to be an assumption that NC users will spend their day with the application that is running on the server, and won't run any other productivity applications. Is that correct?
A: They can do anything they want to do; anything PC users can do. Office productivity software tends to need a fast Pentium processor and lots of memory. You can still put it all on the server, but you just run it on Windows NT.
Q: There have been reports about Oracle's plans for these personal productivity applications. They suggest you are writing a set of applications in Java which will be capable of word processing and spreadsheets.
A: The codename for the product is Hat Trick. It sits on top of the NC operating system, and is basically Microsoft Office but in a fraction of the code. It produces the fundamental capabilities, so you can type text, insert, delete, spell check and so on. It will also do spreadsheets and graphic presentations.
Q: Will Hat Trick be file-compatible with Microsoft Office, Lotus Smartsuite and other mainstream application suppliers?
A: Yes, it will certainly be able to read all the relevant file formats and preserve all the formatting. It just won't be able to do everything that Microsoft Word or Lotus Ami Pro can do.
Q: Why is this product being developed by your subsidiary company, Network Computing Inc? Why not keep development in-house?
A: Because it focuses people on what is their core activity. If we allowed our database group or our tools group, as large as they are, to try to do this they'd be too bureaucratic.
Q: Will Hat Trick sit on top of an Oracle-specific operating system?
A: Yes. It's the operating system we're developing to NC standards.
Q: So not all NCs will be able to run Hat Trick?
A: That's quite true. For example, IBM was part of the announcement to conform to the NC standards, but I can't guarantee IBM is doing that because it isn't using our operating system. I don't know what the company is using. If IBM conforms to NC standards it can use Hat Trick.
Q: How does Oracle decide what to keep proprietary and what to make freely available to the world?
A: Well, we're not making anything free to the world. Obviously, the NC Reference specification is free, but that's because we want as many people as possible writing applications to those specs.
Q: What's happening with your browser, Power Browser? It doesn't seem to be getting much publicity? Can we assume the NC will have a Netscape product on it?
A: Browsers are really easy to manufacture. We had a team of developers working on a browser, and before we knew it we had created Power Browser. We've never promoted it, and we've never said we wanted to compete with Navigator and Explorer. But we have a browser, and a lot of customers have downloaded it, so we will support it. But we don't expect to win any legitimate share in the browser business. Browsers will soon be a thing of the past because they will be embedded in the operating systems, whether it's NC, NT or Windows.
Q: Recently, there has been speculation about Oracle buying Netscape.
Where's the logic in that, and why should Oracle be interested in getting involved in what is essentially a browser technology company?
A: It would not be logical at all. But I believe that many people in the industry would consider an alliance between Oracle and Netscape to be an extremely positive move. The two companies would be a strong offensive against Microsoft. Oracle has got all the server software it needs - we have strong Web server software. And Netscape is planning to go right into Web servers, messaging systems, the whole thing. Netscape would bring a stronger client end to the party - 40 million clients run with Navigator - and a brand. But this acquisition won't happen because it's too expensive. Netscape is valued at $3.5bn. That's too much for a brand.
Q: Most users have very old systems, and find it time-consuming and expensive to maintain them. Accessing legacy data can be very difficult. The industry seems to be solving this by creating a separate data warehouse.
Is that true?
A: That's exactly it. Put it in a relational database, in a warehouse so you can access it, analyse it, use new tools to get to it. You hunt down the parts of your old data that are valuable, and copy them into a separate system which is scalable. It's not accurate to call it a new system because it leaves alone the transaction systems as legacy systems.
So your old financial systems, order-entry, purchasing, manufacturing and forecasting systems are still there. But they are creating current data, and that is what you want to access. So, for analytical processing, for accessing information, finding out what's going on in your business, you can do that through a data warehouse. But you still haven't changed the legacy applications. Those have to be replaced. I think the year 2000 date problem is stimulating companies to replace many enterprise-level applications.
Q: Is that a major problem?
A: Absolutely. The customer is saying 'this thing is old, but we could still run it for a lot longer'. The airline reservation systems are 30 years old. You can run these things forever if you find people that can maintain them and who know the old languages. You decide what needs to be replaced based on economics. It's like an old car - you don't replace it until your existing one is costing you a lot of money to maintain.
But I think the year 2000 problem is accelerating this situation. People say: "The maintenance is high, which means we've got to replace the system at some point, so let's do it before 2000." I think once that's over - at midnight on 31 December, 1999 - people won't be so anxious to replace legacy systems.
Q: Is there another factor driving these kind of changes? It seems that companies themselves are now very fluid as organisations. They are increasingly acquiring parts of other companies and so are having to combine computer systems.
A: It's an absolute nightmare. It is never easy to integrate systems.
You are better off choosing one and converting the other. Typically, the acquiring company will want to convert the businesses it buys, but I've seen it happen the other way.
Banks, in particular, find they've acquired a good system. In fact, it is sometimes one of the reasons for buying a company. But data conversion, system conversion is not easy. So you should pick one system and don't try to merge them.
Q: What are the major factors holding back Web commerce?
A: Trying to change consumer behaviour is a long-term consideration.
I can't think of one consumer device that has instantly caught on - VCRs, cellular phones or Automatic Teller Machines. Fax machines were probably the fastest - everyone in Japan has one at home.
But you typically have a ten-year business cycle for consumers to adapt to using new electronic devices. So training consumers is one reason why Web commerce has been slow to take off.
The second factor involves making the Web secure, because people like to buy with credit or debit cards. That will take a while. It is important that security is built into database-type software. When a consumer buys goods in a shop, it usually needs about seven or eight different transactions, and you want all of those transactions to happen. You don't want to delete inventory, but you do want to delete the guy's bank account. That's called database integrity - making sure the transaction has integrity all the way through. Once applications for the Web are built with that kind of robust security, Web commerce will take off.
Life of the fast Lane
Oracle is the world's second-largest software company, behind Microsoft, and the number-one supplier of software for managing data. Founded in 1987 and based in California, Oracle employs 25,000 people worldwide. Its turnover last year was more than $4.2bn, and its latest quarterly results indicate this figure is still rising rapidly.
The company's main products are its Universal Server, Rdb7 databases and its Developer 2000 development tools. Other products include Interoffice, a workflow, groupware and messaging product similar to Lotus Notes, and a range of client-server application software. It also has a large consulting and programming arm.
Recently, the company has been in the news because of its advocacy of the Network Computer (NC), a sort of cheap, simplified PC, designed to work attached to a server via a network or Internet connection.
Oracle's chief executive officer, Larry Ellison, first put forward the concept in a combative speech in Paris in November 1995, which was followed up with a range of NC initiatives.
But Oracle has a long track record of setting or spotting trends. It was an early advocate of the database query language, SQL, and its databases have long supported multimedia data types. Its software also has an impressive reputation for scalability, allowing customers to move applications on to larger (or smaller) servers if requirements change. Oracle databases work on massively parallel computers or server clusters. The company has also been an active pioneer of both data warehousing and Web publishing - particularly the idea of automatically generating Web pages from existing database content and using Java tools.
Ray Lane is president and chief operations officer at Oracle, which makes him the company's number two. He's responsible for planning and implementing policy and strategy decisions taken by the three-man executive team that heads the organisation. The team is made up of Lane, chief financial officer Jeff Henly and chairman and chief executive Larry Ellison. Before joining Oracle in 1992, Lane was a senior vice president at Booz Allen & Hamilton, a worldwide consulting practice. Prior to that he was a vice president at EDS in its Ross Perot days, and he spent ten years at IBM in various product management and marketing posts.
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