Oracle Says Fusion Middleware Tops $1 Billion In Sales, Considers Getting Cozier With IBMOracle Says Fusion Middleware Tops $1 Billion In Sales, Considers Getting Cozier With IBM

Oracle Tuesday announced that it sold more than $1 billion in Fusion Middleware licenses and maintenance during the company's fiscal 2006, growing its Fusion Middleware revenue 34.5% over the previous year. Fusion Middleware now represents more than 7% of Oracle's overall sales, which were $14.4 billion for fiscal 2006, ended May 31.

Oracle believes it will continue its success in the middleware market because its technology embraces standards more so than competitor SAP's NetWeaver does. NetWeaver doesn't work with versions of SAP software that predate MySAP, while Oracle Fusion works with both MySAP and R/3, Oracle president Chuck Phillips said Tuesday during an analyst event in New York. "We have more SAP customers using Oracle Fusion Middleware than are using SAP NetWeaver," he said.

Although Oracle's database business has been stagnant in recent years, the company hasn't given it up for dead even though Microsoft SQL Server continues to soak up market share. Assuming data continues to proliferate exponentially as companies continue to go digital and are compelled to store records for government regulatory compliance, Oracle is hoping that its Secure Enterprise Search, Audit Vault, Database Vault, and Content Database will strike a chord with customers.

With Audit Vault, expected to be available by the end of the year, Oracle expects to provide its customers with the ability to create a warehouse of audit information from a variety of sources, including applications, file systems, and databases. "Companies need some easy way to understand their transactions so they can prove to a regulatory agency that they have processes in place and can track activity if there's a security breach of some sort," Chuck Rozwat, executive VP of server technologies, said Tuesday. Database Vault, which should be available by the end of August, is designed to let companies control who has access to different types of data.

While Oracle doesn't see any dramatic increase in IT spending at this time, the company is confident its database products will be in demand. "Customers are generating lots of data, and we just need to make sure we capitalize on it," Phillips said.

Credit Suisse indicated in a research note distributed Monday that Oracle's fortunes would likewise be helped by a possible expansion of the partnership between its applications group with IBM's Global Services and software divisions. Phillips Tuesday acknowledged that Oracle is planning to expand its relationship with IBM but didn't go into detail.

IBM's relationships with Oracle acquisitions Seibel, PeopleSoft, and JD Edwards were "big drivers" of IBM software, hardware, and consulting dollars, the Credit Suisse report says. Oracle and IBM have already worked to ensure that Oracle's Fusion applications will run on IBM's WebSphere products, and a closer relationship might help them counteract the work SAP and Microsoft are doing together.

As Phillips pointed out Tuesday, there are no other software companies even close to Oracle size for his company to acquire. This means Oracle's growth in the short term will depend on how well the company executes on its integration strategy.