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12/26/2002
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Oracle May Need More Than Cost Savings To Unseat Exchange

Business users want to do more than save money, analyst says.

Oracle is pushing its collaboration suite as a money-saving option for companies that run Microsoft Exchange 5.5, but one analyst says the promise of cost savings isn't going to be enough to lure business buyers.

On its Web site, Oracle says customers can upgrade to its collaboration suite for less than one-third of the cost of migrating from Exchange 5.5 to Exchange 2000. The vendor says that consolidating E-mail, calendaring, and file servers can help companies slash software, hardware, and administrative costs.

David Ferris, principal analyst at Ferris Research, says the prospect of cutting costs only sways buyers who are convinced there are other business benefits as well. "Saving money is often a major motivator for consumers, but other factors tend to predominate with business users," says Ferris, noting that "there's usually significant inertia" keeping companies from abandoning current software platforms. However, he maintains that if Oracle can demonstrate that its collaboration suite is a more-efficient tool that will improve operations, and combine that with cost savings in the 30% to 40% range, then new customers are likely to follow.

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