Oracle plunged into the applications hosting market last week, rousing fears that it will compete with its own customers.
Oracle's iHost initiative will see the company offer ISPs a software bundle and consulting services to help them become ASPs (application service providers) renting software applications to business.
The bundle includes Oracle's 8i database, Application Server and Internet Directory. The suite of products will ship in September.
But Oracle's target customers are worried that the company will compete with them directly in the ASP market, through its Business OnLine service.
Expected to go live in the UK later this year, Business OnLine is a hosting service for Oracle Financial applications.
ISPs may be forced to comply. "Oracle can afford to be arrogant. We have to provide what our customers want and many of them will ask for Oracle.
We are not going to cut off our nose to spite our face," said Roy Howitt, sales manager, at UK ISP, GX Networks.
Potential ASPs are being bombarded with offers from IT vendors, ranging from leasing, risk-sharing and technology-sharing agreements.
However, Oracle ruled out anything other than standard per licence for pricing.
Despite other vendors' incentives, Oracle claimed that most ASPs would still turn to Oracle when they build their infrastructure for applications hosting.
"There are 7,000 ISPs worldwide. We are not going to cut custom deals with all of them, and risk-sharing is a difficult business to get into," argued Jeremy Burton, vice president of server marketing at Oracle.
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