Oracle, purveyor of databases to big corporations, reckons it can generate an extra $2 billion a year in sales from the small and medium business sector.

And it's going to achieve this by the ASP/software rental model.

Tomorrow (Tuesday June 26), the company launches Oracle Small Business Suite. This will enable companies to rent accountancy software over the Internet, according to The Sunday Times.

Oracle is negotiating with Barclays and "another high street" bank to deliver the software on their web sites.

In other words, it's climbing into Sage Software territory. Oracle's pitch is that its accountancy software is more powerful, and that the rental model will be attractive to small businesses.

In an interview with Sunday Times, Larry Ellison, Oracle CEO, said: "Small businesses don't have to go out and buy a computer or software. We run these computers for them and make sure that they're reliable and safe and make sure that it is there 24 hours a day. They don't need computer experts... We are talking of business down to 50 people or even 10."

Sage is the dominant supplier of accountancy software to small and medium business market in the UK, and it has a big presence too in France, Germany and the US. The Newcastle, UK-based vendor is a notable sceptic about the demand for ASP-type contracts from its customer base.

Microsoft is gunning for the small business market too through its BCentral.com Web site. ®

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