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October 27, 1999

Oracle Hikes Price of New Network Computer

By CBR Staff Writer

By Stephen Phillips

Oracle Corp appeared to announce a 33% price hike on its yet-to- be released network computer yesterday when chief executive Larry Ellison cited a box-only price tag of $199 compared to the $150 he has hitherto quoted.

An Oracle spokesperson said yesterday that the firm had never specified a price for the low-cost hardware platform beyond saying it would sell for under $200. But Ellison has previously bandied about a price tag of $150 for the desktop product, without a monitor, in discussions with journalists. Ellison played on the figure, when he first revealed the venture in July, because he said it made the product cheaper than a software license for Microsoft Office.

Ellison primed delegates at the IT support services and customer relationship management conference in San Francisco yesterday to expect announcements about the network computer soon. He said the device would offer Netscape Communicator, StarOffice and other applications from Oracle to court the corporate market, alongside gaming capabilities. It will run on the Linux operating system, incorporate an Intel processor and offer 64Mbs of RAM and a 56k modem for internet access.

Ellison is unfazed by the lackluster reception to the firm’s previous attempt to displace the client-server PC-computing paradigm with network computing. He has even kept the same name for the latest venture, Network Computer Inc, which like its predecessor will be spun off as a separate company. The mark-one Network Computer Inc, failed to replace the PC with the network computer or sell the product in hoped-for, appliance-like volumes. The firm was renamed Liberate Technologies Inc before its $100m initial public offering in July and has thrived under a new exclusive focus on producing software to upgrade television sets to offer internet access. Liberate’s share price stood at $59.87 at close of business yesterday from its initial offering price of $16.

Ellison has denied he over-estimated market appetite for thin- client devices connected to fewer, more powerful servers, announcing that the scope for applications to be housed on the internet makes the network computing concept viable again.

Ellison also suggested yesterday that Oracle would set up a separate European company to market its recently-launched Portal-to-Go technology, which distributes internet applications to appliances. The system, previously code-named Project Panama, offers static and dynamic internet content distribution to GPRS-compliant digital cell phones and 3com’s Palm VII hand-held PCs at the moment. The system was co-developed with Swedish incumbent telecommunications firm, Telia, but Ellison declined to say whether any partners would be involved in the proposed venture or give a time frame. I would be surprised if we didn’t do a spin-off in Europe in the cell phone area, he said, adding that a spin-off was in line with Oracle’s policy of finding interesting new business and taking it public. He said Oracle itself would stick to enterprise software.

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In the wake of the recent consolidation of the customer relationship management software market, Oracle threw down a gauntlet to CRM competitors yesterday publishing a functionality checklist for prospective customers to compare offerings. Niche CRM software suppliers, Vantive Corp and Clarify Inc, were recently snapped up by PeopleSoft Inc and Nortel Networks Corp, respectively.

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