Oracle's prospective Fusion applications will be leading edge, next-generation applications, not just replacements for existing J. D. Edwards, Siebel Systems, and PeopleSoft applications, Oracle CEO Larry Ellison said at Oracle OpenWorld on Wednesday. Ellison was speaking at the Oracle user group meeting, which this year includes users of Agile and Hyperion software as well as PeopleSoft, J. D. Edwards, Siebel Systems, and Oracle's E-Business Suite.

By next generation, Ellison meant the Java-based applications will have business intelligence built into them and in some cases, such as Sales Prospector or Human Capital Management, will include new social networking, enterprise wikis, or other collaboration mechanisms. In addition, the applications will be undergirded by a suite of Fusion middleware that includes an enterprise service bus for moving data between dissimilar applications, allowing a greater degree of integration.

In taking questions from the audience, Ellison appeared surprised that customers were still skeptical that the Fusion applications might not be out in 2008 as scheduled or fail to live up to their advance billing. But Oracle officials also are careful to say the first Fusion applications will appear in 2008 without promising that an equivalent Fusion application will be available that year for every piece in the portfolio.

"When will Fusion applications be done?" one attendee asked. Ellison responded: "The first three will be out in the first half of 2008. I fantasize they will be out early in 2008," he said, before noting that Safra Catz, Oracle's co-president and chief financial officer, was staring at him from the front row in warning on making commitments that might bind the company.

"Fusion apps are coming out in 2008. There are no new dates to announce. ... Let me emphasize, Fusion applications are coming out an application at a time," he said.

Ellison went on to describe Fusion applications as a major rewrite of existing applications, gaining new features. Applications are typically rewritten every 10-15 years, he said. "We'll be writing Fusion applications for a very long time" as Oracle produces and upgrades them in the future.

The new Fusion applications will be able to work with existing E-Business Suite applications, he added. They will be available for installation on customer premises or as software as a service, he added.

Another questioner asked Ellison why Oracle itself wasn't using the latest version of its E-Business Suite. "We go live on E-Business 12 in January," he said.

Ellison emphasized at the start of his remarks that Oracle has picked up 1,500 customers with its "Unbreakable Linux" support offering, launched at Oracle OpenWorld a year ago. Oracle doesn't offer its own Linux distribution. Rather it offers a contract for technical support to Linux users who want to switch from Red Hat. If requested, Oracle supplies a pre-configured combination of the Oracle database and Linux for initiation at a customer site. The Linux included is Red Hat Enterprise Linux with the Red Hat logos and trademarks stripped out.

"Our focus is to start with Red Hat Linux but to fix bugs," he said. Oracle is supplying technical support, including bug fixes, Ellison said, because Red Hat itself is sometimes slow to respond to individual customer complaints.

Brian Stevens, Red Hat CTO, is attending Oracle OpenWorld, and he said Oracle had the chance to submit bug fixes to Red Hat prior to launching Unbreakable Linux as the two cooperated to make Oracle run effectively on Linux. "Oracle submitted less than five patches delivered over the 3 to 4 year lifetime" of the two working together, he said.

Wim Coekaerts, a Linux kernel developer and VP of Linux engineering at Oracle, said in an interview several weeks before Oracle OpenWorld that Red Hat Enterprise Linux is extensively tested before changes are accepted, which slows the bug fixing process. Oracle helps customers, then submits the fixes to Red Hat for inclusion in its enterprise version. He couldn't put a precise number on customer issues, but said they occurred at a rate greater than 3 to 4 times a year.

"There are disagreements on what is considered critical by the distribution vendors and us or our customers," Coekaerts said.

Red Hat spokesman have said that customers taking an Oracle bug fix, untested by Red Hat, were voiding the certifications and guarantees supplied by Red Hat on its enterprise system.

Ellison also emphasized Oracle's foray into virtualization, offering open source Xen as Oracle VM.

"Our new announcement is doing something that Red Hat is not doing, shipping Oracle VM underneath Linux. ... We have live migration. You can migrate the virtual machine while it's running from machine A to B," he said.

In a jab at VMware's VMotion migration tool, he added: "Some companies say, 'We're the only ones who can do that.' Not any more."

Technical support for Oracle VM is priced at $999 a year for a four-way server. "That's a better price than you can get from VMware," he said.

Ellison also said Oracle VM was Xen re-engineered by Oracle to be "dramatically faster than our competition. It runs a lot faster."

VMware responded with a blog on its site that listed ten reasons why Oracle runs best under VMware's ESX hypervisor. ESX can support near native performance of Oracle in a virtual machine and drive over 63,000 database I/Os per second, about 50 times the requirement of a typical database, the blog said.

Steve Lanchak, head of BearingPoint's Oracle consulting practice, said there may be debates over the fine points of Oracle's announcements but its movement in Fusion middleware and Fusion applications was in step with "simplifying the movement toward an SOA environment."

Enterprises looking to reorganize their software infrastructure around services were being given lots of choices through "the sheer number of SOA-enabled end points in the new applications," added Rob Youngblood, a lead consultant with BearingPoint's Oracle Solutions Practice Group.

In other words, there are lots of ways to connect application function to application function, or business processes to data under the Fusion approach, he said.