Oracle Battles The Middleware

Oracle Battles The Middleware<@VM>HP Returns to Pay-Per-Cycle?

Larry Ellison

Larry Ellison

Middleware, Larry Ellison said, is a "nitwit idea."

Ellison, Oracle Corp.'s chairman and chief executive officer, was referring to the software that links legacy and other database systems with more advanced Internet applications and computer systems.

"Middleware will never work well. It's absurd," he said, showing his usual dramatic flair at a keynote address during the E-Gov 2001 conference July 10 in Washington.

Ellison proposed that government agencies, in-stead of maintaining a multitude of databases connected by expensive and barely interoperable middleware, should run one central database ? presumably Oracle's.

In essence, Ellison wants to wage war on organizational complexity, using his company's new software as the weapon. But some potential competitors ? including those who rely on middleware for their own work ? think Ellison is really just battling windmills.

"Larry and I have a philosophical difference of opinion on this matter," said Rick Bergquist, chief technology officer for PeopleSoft Inc. The Pleasanton, Calif. company specializes in collaborative enterprise software that can interface with older legacy systems.

"Rather than have one huge, monolithic system, customers are better served by a modular approach," Bergquist said. "The name of the game is integration. Customers want choice."

John Taylor of Software AG Inc., the Reston, Va., subsidiary of the German system software provider Software AG, described the idea of agencies shedding their legacy systems for a single database as "nirvana."

But "it just isn't pragmatic," he said. "Oracle offers many applications, but it doesn't have all of them."

Prompting Ellison's quixotic vision is the new release of Oracle's 9i database, which is specifically designed to let customers gradually ramp up to meet new demand without redistributing data onto new servers. This avoids the data fragmentation that eventually necessitates middleware in growing companies.

The database software also potentially reduces the tremendous anticipatory costs that the centralized storage model would otherwise entail. In conjunction with 9i, the Redwood Shores, Calif., company also released the Oracle9i Application Server, which allows rapid application development.

"Agencies have dozens of different databases, all separate from one another," Ellison said. "The ideal solution is to have a large central database with lots of applications publishing information into and subscribing out of."

Kevin Fitzgerald, senior vice president and general manager of Oracle's public-sector unit, pointed to one government agency already benefiting from such an approach: the Navy's Military Sealift Command. Without customizing Oracle's software, the command converted 17,000 purchase orders, 8,000 receipts and 2,000 requisitions from legacy systems to the new Web-based system, enabling the command to easily complete its year-end financial closing.

Oracle's solution, consisting of a database and application server, allows all financial transactions to be visible and traceable and can be interfaced with other Defense Department agencies.

Ellison said a similar solution would work for a national health care database. "When a lab analyzes your blood, it could actually store it in a national database," he said.

Centralized records could eventually take the place of databases and file cabinets in every doctor's office throughout the country, keeping information uniformly confidential and accessible from everywhere, he said. Such a simplified solution could save the country $400 billion a year in health care record-keeping costs.

Although Ellison may have struck a chord with system managers dealing with the sometimes-stubborn nature of middleware, plenty of companies take an exception to Ellison's solution.

PeopleSoft's Bergquist said organizations today have needs that are just too varied to work under a single system based on enterprise resource planning.

As for reducing the middleware frustrations, Bergquist said that PeopleSoft 8, his company's latest software, offers "a well-designed set of application program interfaces," or APIs, that can make integration with other systems seamless. And this allows for a wider choice in software as well.

The speed of data retrieval may suffer under a centralized storage model, particularly one as large as Ellison's hypothetical national health database, said Devon McFadden, software storage specialist for BMC Software Inc., a Houston company specializing in systems performance and management.

According to Colleen Graham, an analyst for the Gartner Group of Stamford, Conn., Ellison's message of database unification is nothing new for the company. "Oracle wants to be a one-stop shop," she said.

Graham also said Oracle might be ramping up its marketing efforts because of the growing threat of middleware.

"Suddenly, you can do a lot more in middleware," she said.

Middleware has grown more sophisticated and easier to deploy in the last five years, particularly with the development of integration broker software that easily bridges the gap between legacy systems and Internet-based interfaces. Such products are marketed by IBM Corp. of Armonk, N.Y., Tibco Software Inc. of Palo Alto, and webMethods Inc. of Fairfax, Va., said Joanne Correia, vice president of software research at Gartner.

In other words, the more agencies use middleware to keep legacy systems viable, the less call there will be for new databases, Graham said.

According to Dataquest, a unit of Gartner Group, the middleware market is expected to grow from $3.8 billion in 2000 to $11 billion by 2005.

Graham agreed with Ellison that a centralized database approach could reduce complexity. But Oracle might have a tough time selling the idea in the current economy, she said.

In this climate, most agencies and companies "are more interested in using Band-Aids to fix things than doing complete overhauls," she said. People today want to remodel their houses, she said, not buy new ones.Oracle's centralized storage model is not the only marketing idea recalling the mainframe computing era. On July 9, the Hewlett-Packard Co. of Palo Alto, Calif. introduced a pay-per-use utility program for HP servers in which customers are billed by processor usage.

It's not exactly the same as the time-sharing payment plans so common 30 years ago, when mainframe computation was a scarce and expensive resource.

But "it is reminiscent, in that some complex computing functions can be acquired externally," said Jean Bozman, analyst for the consulting and research firm International Data Corp. of Framingham, Mass.

Available for HP's Unix Superdome servers and Intel Windows NT Netservers, this service bills users like a cell phone service. Instead of one fixed lease payment, monthly billing consists of a base payment plus a variable amount reflecting processor usage, as determined by HP's metering software.

Bruce Klein, general manager of HP's public-sector organization, said the new pricing plan would result in savings for agencies experiencing spikes in server usage, such as the Internal Revenue Service during tax season. Klein said the plan would also benefit start-up organizations needing to minimize capital expenditures.

Bozman said that HP recognizes that utility pricing would be appropriate only for a minority of its customers, mostly those with varying seasonable or hourly demands. She said it wouldn't be optimal for a growing organization that would eventually use all of the server's capacity.

According to HP, a client will save money over a standard leasing arrangement if it uses less than 50 percent of the server's capacity on average per month.

Still, pay-per computing models like HP's might have a bright future. "HP is a first-mover in this field," Bozman said.

Although HP has no agency clients for this pricing model yet, systems integrator Logicon PRC Inc., a part of Northrop Grumman Corp., has partnered with HP to offer its own storage-on-demand and processor-on-demand services.

IBM Corp. launched a utility pricing program with its zSeries mainframes last year. And July 17, Compaq Computer Corp. announced a computing-on-demand program for its own servers.

"We'll see more of this type of pricing model," Bozman said.

About the Author

Joab Jackson is the senior technology editor for Government Computer News.

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