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Oracle Changes ASP Strategy

Oracle Business OnLine is expanding its iHost Partnership program, letting other application service providers host, implement, and customize Oracle software. The move is an abandonment of previous company promises that no other ASP would ever host Oracle apps.

The company's ASP organization had been struggling to handle customization requests, such as personalized screen views and integration with third-party applications.

In fact, Oracle had been quietly testing the idea with a few ASPs. Gary Bloom, executive VP for Oracle, still trying to soften the sting of retreat, says the company will only partner with ASPs that offer added value, such as their own networks or third-party applications. "We still wouldn't partner with pure-play ASPs like Corio," Bloom says.

"Oracle has woken up and realized they can't do this by themselves and, in fact, they better not do this by themselves," says Joshua Greenbaum, principal analyst with Enterprise Applications Consulting. "The growth of the market is huge, as is the competition, which requires them to get partners if they want significant market share." Market researcher Dataquest Inc. predicts the ASP market will reach $3.6 billion this year, jumping to $8.4 billion by 2002.

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