Oracle opens door to online business

Database firm establishes website to grab ecommerce share. Cath Everett in Redwood Shores.

Oracle has kicked off a business procurement website as a spin-off from its business online (BOL) applications hosting service.

The operation will be run from the BOL data centre in Redwood Shores and other BOL centres in the UK and Australia. The company claimed users will not need to implement its proprietary software to use the system.

Larry Ellison, chairman and chief executive of Oracle, said: "Unlike other vendors, this won't just work with Oracle applications. In fact, you don't need any Oracle software at all.

"We provide the website and we have our ERP applications at the back end. MySAP, for example, requires that SAP software is installed by the supplier and user.

"The best metaphor is Nasdaq - there's only one Nasdaq. We want this website to become the place to do comparison shopping and buy goods," he added.

Oracle Exchange will enable customers to purchase goods and services using the traditional catalogue buying model, the spot buying method, and a buyer auction service, where purchasers solicit and manage bids from multiple suppliers online.

The Exchange website will be based on Oracle's Internet Sourcing bid management software, which is due to ship by the end of the year, but will be introduced in phases until then. The website will also include various subsets, which will be aimed at specific sectors such as the auto business or PC electronics industry.

Oracle has already signed up about 260 vendors, including Compaq, Adecco Staffing Services, and Boise Cascade Office Products, to provide content under its supplier network scheme.

The database company is also looking to sign up financial institutions such as banks to underwrite all its transactions in the local market.

The company will generate money from the site by charging users transaction fees and selling advertising, and is in the process of launching the system internally, although Ellison admitted that the impact had yet to be felt.

But Ellison believed it was crucial for the database supplier to consolidate and to be the first to market when offering a chargeable internet service.

"Buyers bring sellers, so we will be launching by targeting this service at large businesses. Of course, in the long term, we want as many people as possible using the Exchange service," he said.

"If Oracle can provide procurement services to more users at a lower fee, then why shouldn't we win?" he asked. "It's all about scalability and you have to have that to be successful."