Oracle's Ellison: Fusion Will Dawn in 2010

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The announcement that Oracle would deliver the first Fusion applications next year comes as the company is trying to close its $7.4 billion acquisition of Sun Microsystems (JAVA) amid regulatory scrutiny by the European Union. The deal had initially been expected to close in July. Ellison didn't address the delay during his keynote address, although he did discuss new Sun computers that run Oracle's database software—saying they are faster than comparable systems from IBM (IBM). IBM and Hewlett-Packard (HPQ) have targeted Sun's customers amid the uncertainty attending Oracle's completion of the acquisition.

In a speech on Oct. 11 at the beginning of OpenWorld, Sun Chairman Scott McNealy sought to assure Sun's customers that Oracle would continue to support many of Sun's key technologies, including Sparc processors. In a September panel discussion in Silicon Valley, Ellison said the delay in closing the deal was costing Sun $100 million each month. "The longer this takes, the more money Sun is going to lose," Ellison said at the time.

The upcoming Fusion applications will include software for financial management, human resources, sales and marketing, supply chain management, and other areas. Customers will be able to run the software on their own computers or have Oracle run the software on its machines. Ellison said Oracle consulted with customers, including Alcoa (AA), ING (ING), and Qualcomm (QCOM), to help design the Fusion applications.

So Far, Software Code Merged Poorly

Ellison has promised the Fusion programs before. Two years ago he said Oracle would deliver the first Fusion application, a customer management system, in 2008. It still hasn't arrived. In the meantime, Salesforce.com (CRM), whose CEO, Marc Benioff, gave a keynote speech on Oct. 13 at the conference, has been stressing the ease of use and easy maintenance of its online sales management software vs. offerings from Oracle and SAP. "Marc's really rubbing Larry's face in the fact that Oracle's late," says Bruce Richardson, chief research officer at industry consultant AMR Research.

Oracle's competitors note that the tech industry has a spotty track record of pulling off ambitious mergers of software code, such as what Oracle is attempting with Fusion. IBM in the '90s and Microsoft this decade scrapped efforts to stitch together various business software applications they'd bought. "I've always thought about Fusion in that category," says SAP Chief Technology Officer Vishal Sikka.

Near the end of his speech, Ellison said the long wait for the Fusion programs is nearly over. "It is a big project and we have been working on it a long time," he said. Now, Oracle will see whether customers are eager enough for the new capabilities to move away from the tried-and-true products they bought from the many companies Oracle has acquired.

Ricadela is a writer for BusinessWeek in Silicon Valley.

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