Software October 15, 2009, 12:17AM EST

Oracle's Ellison: Fusion Will Dawn in 2010

Pledging that Oracle's long-awaited software lineup will make its debut soon, CEO Larry Ellison assured customers they won't be forced to switch

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After spending years and years gestating a significant new lineup of business software, Oracle (ORCL) Chief Executive Larry Ellison said on Oct. 14 that the company's long-awaited Fusion applications would make their debut next year.

Ellison, delivering a keynote address at the company's OpenWorld conference in San Francisco, also tried to reassure customers who have been concerned that they might be forced to switch from older software to Fusion if Oracle were to discontinue supporting old iterations of its software. For the next 10 years, he said, Oracle will continue to develop and enhance older software from PeopleSoft, Siebel Systems, and other brands of the almost 60 companies it has acquired for $30 billion in the past half-decade.

"We're going to enhance those applications for the next decade," Ellison said. "We're a pretty large software company. We can afford not only to maintain the software you're running today, but to build the next generation of applications.…We don't think all customers are going to replace what they have today with Fusion."

Customers Doubted Fusion's Progress

The promise of 10 years' further support for software that Oracle has acquired, as well as its own current E-Business Suite, could ease some concerns on the part of customers who say that as Oracle expands in scope and market power, it is presenting them with fewer choices of software suppliers, raising prices, and holding a tough line on price negotiations. Companies use business applications from Oracle, its rival SAP (SAP), and others to manage human resources departments, plan manufacturing schedules, and track their financial performance.

Customers have also been skeptical that Oracle could deliver new Fusion versions of its business applications, built on the industry-standard Java programming language, in a timely fashion. Kris Kutchera, vice-president for information technology at Alaska Air Group (ALK)—which runs Oracle's databases, PeopleSoft HR systems, Siebel customer management software, and Hyperion data analysis tools—was briefed on the software about a year ago. "It just seemed like a concept," she says. "They were talking about it, but they couldn't really explain it."

Delivering the Fusion applications next year could also help Oracle's financial performance. "If Oracle executes well on the Fusion applications, they should represent a significant growth opportunity," said JMP Securities (JMP) analyst Patrick Walravens, who has a market perform rating on Oracle shares, in an Oct. 14 research note. Oracle—the No. 1 supplier of database software, in addition to its applications—on Aug. 31 reported that sales fell 5%, to $5.05 billion, missing Wall Street analysts' expectations.