Oracle plans $8 billion revenue Web outsourcing operation

Oracle is seeking partners for a spin-off of its Business Online operations, said chairman and CEO Larry Ellison yesterday. The Oracle unit is currently entering a beta in conjunction with Sun, and aims to conjure up what Ellison claims will be $6-8 billion worth of annual revenue in five years time. From Oracle's point of view, Business Online is a natural extension of the sorts of services the company currently provides to major corporations. Centralised network systems running enterprise applications are the bread and butter of companies like Oracle, but the Internet gives them the opportunity to offer similar services on a pay per use basis to smaller companies. These companies would effectively outsource some or all of their enterprise apps to external data centres which they could then access over the Internet. In theory this would give small to medium sized companies access to the class of application, and the level of global network infrastructure, that is currently only available to big companies, and while a lot of analysts have been thinking of the Application Service Provider (ASP) as the Next Big Thing on the Internet, but although there will undoubtedly be some crossover between Oracle's Business Online and ASPs, they're probably coming from different directions. ASPs will to some extent grow out of ISPs, and the applications users 'rent' won't necessarily be of a mission-critical cast. Business Online, on the other hand, is clearly more 'top down.' This means it's something of a risk for Ellison, because he could end up building it and then have nobody come, but on the other hand it could be mega. He told reporters in New York yesterday that although he wanted to cut other companies in on the spun-off company, Oracle would retain the majority. So clearly he thinks it will be. ® Click for more stories