BUSINESSWEEK ONLINE : MARCH 13, 2000 ISSUE
NEWS: ANALYSIS & COMMENTARY Oracle's Ellison: The Czar of the Cyber Bazaar? Oracle Corp. Chairman Lawrence J. Ellison likes to boast that his company figured out the Internet Revolution long before competitors knew what a browser was. He crows that nine of the top 10 corporate Web sites use Oracle database software as a foundation. And now Ellison has something new to brag about. With two deals, Oracle put itself at the nexus of what could become one of the biggest--and potentially most lucrative--bets on the Net yet. On Feb. 25, Oracle joined with rival Commerce One Inc., an e-commerce services company, to power a new auto-parts exchange created by the Big Three carmakers. Then Oracle announced its next exchange, a retail business-to-business site that will be owned largely by Sears, Roebuck & Co. and Carrefour of Paris. So in less than a week, Oracle jumped to the lead in the market for providing the guts that make cyber exchanges work. ''Oracle is selling a pretty convincing story,'' says Bruce D. Temkin, research director at Forrester Research Inc. in Cambridge, Mass. B2B TARGET. Oracle isn't done. The company plans to roll out exchanges in several other industries. While executives aren't saying which ones, analysts say health care, aerospace, and financial services are good bets. ''Just as Oracle has targeted business segments in the past and ended up dominating those segments, so Oracle is targeting the B2B segment, and our belief is they will dominate that business as well,'' says Julian C. Day, Sears' chief operating officer. Billions of dollars are at stake. Right now, the Big Three auto makers spend nearly $250 billion annually on supplies. The companies also hope to push the exchange model on their suppliers in an additional $500 billion market. Expect Oracle to get a piece of every one of the transactions --from tires to rubber hoses--that moves online. In addition, Oracle gets to sell its database and application software to the suppliers who will come to rely on the exchange for their business. And Oracle also owns a piece--roughly 10%--of the auto exchange. The model will work similarly as Oracle rolls out other exchanges. ''If you look at the top three companies in an industry, we're talking to them,'' say Oracle President Raymond J. Lane. BITTER PILL. Still, no one is counting Commerce One out, or such rivals as Ariba, i2 Technologies, Concur Technologies, and Microsoft. When Ford Motor Co. and General Motors Corp. decided to scrap plans to develop their own auto exchanges, the companies agreed to include both Oracle, which was working with Ford, and Commerce One, which powered GM's site. It wasn't an easy pill to swallow for Commerce One CEO Mark B. Hoffman, whose company won significant deals to develop exchange sites for BellSouth Corp. and Royal Dutch/Shell Group. ''But if Ford and GM can come together, than maybe Commerce One and Oracle can come together,'' Hoffman says. But the niceties might soon end. Oracle is already suggesting that major corporations will be skittish about dealing with upstarts such as Commerce One. ''These are very small companies,'' Lane says. If he can convince the next set of cyber bazaar customers of that, Oracle will have something else to gloat about. By Jay Greene in Seattle _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS E-Malls for Business CHART: As Corporate Buying Moves Online...E-Marketplaces Should Take Off Oracle's Ellison: The Czar of the Cyber Bazaar? INTERACT E-Mail to Business Week Online

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