Oracle Corp. remains committed to growth via acquisition, according to its president, Charles Phillips. The strategy is proving to be a cost-effective way for the company to extend its technologies as well as deepen its knowledge of specific industries, he told attendees at Oracle’s OpenWorld conference last month in San Francisco.

Over the past two years, Oracle has opened its wallet on more than 20 occasions to buy vendors, particularly in the applications and security software markets. It continued last month, with Oracle offering to buy MetaSolv Inc., a developer of operations support software for telcos, for US$219.2 million in cash.

The acquisition exemplifies Oracle’s “acquire and assimilate” policy according to Joshua Greenbaum of analyst firm Enterprise Applications Consulting in Berkeley, Calif. “It works like this: Find areas where there’s a vertical function that can be promoted, fill in some white space, then take that functionality and try to apply it to that broader customer base.”

The Oracle paradigm, Greenbaum suggested, is one of complete assimilation. “The new capabilities provided by the acquired company won’t be out there in the broad ecosystem, it will be embedded in the DNA of the organism.”

As a way to assuage any concerns about Oracle’s spending, Phillips said that the software vendor can afford to keep making more purchases because it can quickly broaden the appeal of the products it acquires due to its size as well as easily assimilate the acquisitions.

“We get proven R&D which supplements what we’ve already invested in,” he said. “We also get industry experts with decades of experience — a phenomenal asset for us.”

Oracle’s current mission is to “redefine how people use and think about enterprise software,” Phillips said, with the company’s Fusion middleware lying at the heart of that focus for both Oracle’s existing applications and its planned new Fusion applications suite, due to appear in 2008.

He added that the software industry has “never had a true test of what would happen” if a company continued to support and enhance its existing applications as well as debut a brand-new set of applications such as Fusion.

“It’s unclear how it will play out,” Phillips said. “It doesn’t matter; we can afford it.” In his keynote at OpenWorld, Chuck Rozwat began to talk in general terms about 11g, which is currently in beta testing. Rozwat, an Oracle executive vice-president, heads up the company’s database business.

Rozwat dubbed 11g “a significant release,” containing hundreds of new features spanning high availability, performance, scalability, manageability and what he termed “diagnosability.” The upcoming release will also focus on meeting the needs of users of very large databases (VLDBs), he added, as well as including business intelligence and content management functionality.

The next release will come with new compression technology to potentially reduce customers’ storage demands by two-thirds, according to Rozwat.

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— with files from ITWorld

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