Two years ago, Oracle's application server software business was in shambles. Even though the market for the software that runs e-business and other Web site transactions was exploding, the likes of BEA Systems, IBM and Sun Microsystems were trouncing Oracle.
But now it's become Oracle's fastest-growing business--primarily because of the efforts of Thomas Kurian.
After taking over management duties for the product line 16 months ago, Kurian, a senior vice president at Oracle, overhauled the company's application server line. In marked contrast to the sharp decline in sales of Oracle's flagship database in recent quarters, the company's application server revenue has skyrocketed, growing 96 percent, 52 percent and 34 percent, respectively, in the last three quarters.
Oracle has doubled its share of the application server market in the past year, and Kurian says he is setting his sights on BEA and IBM. That's an ambitious goal, as BEA and IBM each account for about 34 percent of the market, compared with Oracle at 6 percent, one percentage point behind Sun, according to Giga Information Group.
But the 34-year-old Kurian, a five-year Oracle veteran, is used to tough challenges. At age 17, he and his twin brother immigrated to America from India with only $400 in their pockets. He worked to pay for his Princeton tuition and living costs, while maintaining a full load of classes. He eventually graduated with an electrical engineering degree and a master's in business administration at Stanford.
CNET News.com recently caught up with Kurian to discuss the future of the application server market and how the product category will fit into Oracle's larger plans for Web services.
Q: Oracle's 9i Application Server was ranked fourth in market share, behind BEA, IBM and Sun. What are your goals with Oracle's application server business, and how are you going to get there?
A: Everyone has a different way of counting. We don't believe we are fourth. We are third. Giga counted the previous quarter, but in the last quarter, we passed Sun. And the gap is widening. Our goals are simple. Our first goal, when I took over, was to make it in the top three, and we've accomplished that. The next goal is to close the gap radically against IBM and BEA. Our release 2 of Oracle 9i Application Server has great functionality and much more. We think it will make it a three-way race.
Q: But how realistic is it to take market share from BEA and IBM?
A: Look at IBM. When they started, they were trailing BEA quite significantly and closed the gap quickly the last couple of years. To be frank, look at where we started. We had an older product. People had a negative perception, saying, "You guys are too late to the party," and our reputation of the old product will be a problem. When I was asked to take it over, we realized we needed a second strong server business for Oracle. We believed there were a lot of customers that needed to get a richer infrastructure to build Internet applications and services. We decided to enter for two reasons: to drive growth for Oracle and offer comprehensive solutions for customers.
"There are a number of people who say the market is saturated. We disagree and think there's a lot of growth in moving applications off the desktop to the servers." Last May, we licensed the (core Java technology) from Iron Flare, a small company in Sweden. We have also added a lot of new functionality. It's broadening the functionality with portal, integration, management, security and wireless capability. We passed the 10,000-customer market earlier this year. We're quickly catching up. There are a number of people who say the market is saturated. We disagree and think there's a lot of growth in moving applications off the desktop to the servers. It will take a long time. We are in the early stages of that transformation. We think this market will grow for a long time.
Q: Why do companies need application servers? What is it displacing or augmenting?
A: Companies need an application server to deploy their enterprise applications on the Internet. When users access Web sites today, each of these Web sites itself is an application that receives the user's request, processes it and provides the response. The system that runs these applications is called an application server.
Q: And why is the market growing?
The market is growing for two reasons. First, customers are moving their applications from desktop computers to the Internet or corporate Intranets. Second, as applications move to the Web, the requirements on the infrastructure that is required to robustly run applications is becoming more complex, and application servers are evolving to meet these needs. Application servers are really substituting desktop personal computers as the location where applications primarily run. In the days of client-server computing, applications ran on desktop PCs and were accessed through Windows File Manager. With the Internet, applications now run on application servers.
Q: What's the audience for the application server--and has it changed? Is it still the techie/developer crowd, or has it moved to people who are not in IT organizations?
A: We are seeing three primary audiences for application servers. Certainly the developer community continues to be a strong influencer. CIOs and architects are increasingly taking a role in determining what application infrastructure is used within their organizations to ensure that these decisions are made in a rationale or cohesive manner. Finally, we are also seeing in certain cases, services within the application server being purchased by line-of-business executives (who manage specific business units) to satisfy a need.
Q: At JavaOne earlier this year, Sun CEO Scott McNealy alluded to the problem of application servers that have proprietary Java technology built in, so software written to run on one application server can't run on another company's application server. He announced a new test suite called the Application Verification Kit, software that checks a program to make sure it will work on any application server. How important is this new Java test suite?
A: It's very good. No. 1, it makes sure software vendors and customers don't get locked into vendor-specific solutions. If you are an independent software vendor, you can test to see if your application is portable. No. 2, it allows the Java community to stay unified against Microsoft's .Net (strategy). Oracle is compliant with J2EE (Java 2 Enterprise Edition, the Java standard for writing business software). We are strongly focused on tight standards compliance.
Q: Oracle CEO Larry Ellison has basically said Web services, as it has been pitched by other companies, doesn't make sense. What's Oracle's stance on Web services--and where does Oracle 9i application server fit in?
A: Oracle believes that Web services represent the next phase of distributed computing based on an Internet model. (Distributed computing spreads computing jobs that typically require a single powerful server among several less expensive machines). We see Web services being used to both build new distributed applications and to wrap legacy computing systems so that they can be more easily integrated. Oracle9i Application Server provides a robust infrastructure to deploy and manage Web services. Oracle9i JDeveloper provides a productive tool to develop Web services.
When Larry Ellison says that Web services as pitched by other companies doesn't make sense, what he is specifically referring to is the approach that other companies take when they state that simply wrapping systems with Web service interfaces provides a panacea that eliminates all other integration challenges.
Q: You're an Oracle executive. Your twin brother is a vice president at Cisco Systems. What kind of response have you gotten from your family and friends back home in India? Is your family proud of your and your brother's success? Do your younger relatives look up to you and see you and your brother as a role model?
A: Yes, my family is proud of all my brothers and what they have done--one heads marketing for India's largest consumer-products company, another is a doctor in the U.K., and then there is George, who is the VP at Cisco Systems. We all chose to do different things, and they are proud of what we each have accomplished, not just of me.